As most of you know, My House Has Wheels stemmed as much with frustration with our housing options as it did with a desire to go mobile. Mobility was, in our case, a value added bonus. Our housing market is, in my opinion, completely dysfunctional and largely controlled by special interests. There are reasons that millions of young people can’t find a house they can afford.
Perhaps the underlying reasons are best illustrated by an experience in my own history. Back in 2005 I was a real estate agent and we owned a lot of property. I saw, first hand, that one of the nation’s largest mortgage lenders, Washington Mutual, was making crazy huge loans to people who barely had a pulse. We lived in a small town in western Tennessee at the time and there’s no way that area had enough buyers to support the 4,000 square foot McMansions popping up where farm fields used to be, like sunflowers in the spring.
At the time I didn’t know what was wrong and I certainly didn’t foresee the coming collapse of housing and credit markets. All I knew for sure was that the game was rigged and that we should get out. That’s when we started selling all our real estate holdings and I started researching housing options.
What I discovered in my research is that we actually have a very limited range of housing choices. You can buy or you can rent and that’s pretty much it. Buying is controlled by the real estate industry, which includes builders, lenders, realtors and the government. Renting is controlled by landlords and companies specializing in multi-family housing.
Builders get paid by the square foot, so they want to build big houses. Real estate agents get paid commission, so they want to sell big houses. The real reason the trend toward bigger goes on and on is because the government props up the mortgage industry by guaranteeing mortgage loans. I won’t get into the obvious hypocrisy of a subsidized market being supported by a decades long government handout, but one of the consequences of the tail wagging the economic dog are more limited choices.
There’s no incentive, anywhere in the system, for builders to build smaller, well-built homes. No builder wants to construct a 30 foot concrete dome home, which would last more than 100 years, is energy efficient and virtually weatherproof, because no one would ever want to build a new one. Yet the biggest reason you still find bricks and sticks homes being built in Tornado Alley is that the government won’t back the loan for anything else. For anything unusual you have to get what’s called “portfolio loan” from the bank and those are hard to come by. Without government backing, anyone who wanted to buy your concrete dome home would need to be able to pay cash.
The limitations on government backed mortgage loans is the main reason all of our housing options look alike. It’s why homes continue to get bigger and more expensive every year. It’s why young people are being forced to consider drastic measures, like living in vans and small campers in the office parking lot. And it’s why my wife and I ended up living in our 5th wheel for four years.
We didn’t live in our camper because we couldn’t afford an alternative. In fact, when the housing market collapsed, I had some of my old contacts begging me to take distressed properties off their hands for pennies on the dollar. There were bargains everywhere for people who had cash. We stayed out of the real estate hustle, even though I was certain housing would recover, which it did.
It may be a different day but it’s still the same dysfunctional game being run by the same crooked players. Young people, already saddled with a decade of student loan debt after college, are struggling to buy that first home. In the meantime, prices keep moving farther out of reach and rents move higher while they’re trying to save enough for a down payment. Many are forced into the humiliating extreme of living with their parents as adults. One can forgive the younger generation for feeling like they’ve been robbed, because they have.
The good news, in small measure, is that RV and camper living are awesome. Mobility ensures a competitive market. If you don’t like your RV park, you can pack up and move. The combination of mobility and competition keeps prices from ballooning out of control. RV living is almost like Lego for housing. You can mix and match the pieces to find a lifestyle that fits you almost perfectly. If you don’t like the neighbors, you can move. You can find neighbors who think like you do and live in states that reflect your political ideals. If you lose your job, you can travel to where there’s work.
If we want to fix our dysfunctional housing market, then we should nudge traditional housing towards RV living, not the other way around. All it would take is for Fannie Mae to back mortgages for less traditional housing options, like concrete domes or containerized homes. Concrete homes don’t need to carry as much homeowners insurance. The shell is still going to be there, regardless of what natural disaster strikes. Containerized homes can be packed up and moved on standard truck trailers with a minimum of effort. Not quite as mobile as an RV but easier than selling one house and buying another.
We won’t see options like those become available because the special interests that dominate our real estate market would lose out. Considering all the money those groups pay your elected representatives, you can bet that change is not going to happen easily.