-Laelth

We live in a townhouse in the most expensive area. We have been thinking about trading it in for a little house. I thought we couldn't afford anything I'd want til I found out what we could rent this sucker for. I think we might hold off, but DAMN. My poor son and his girlfriend can't find anything worth the trouble.

Housing near their jobs is too costly, and if they move "outside" the area, they have issues with transportation/child-care..

Gentrification of inner cities is for the upper classes...at the expense of the poorer folks who need to live close to their jobs. They don;t give a crap about being close to fancy shopping, ritzy restaurants etc.. they need a place to lay their head at night.. that they can afford

I lived in Detroit for many years so keep up on things there. There has been an influx of artsy and hipster types into the downtown core and there has been quite a bit of press in the last year explaining how many (not all) current residents are at best ambivalent and at worse openly hostile towards this influx.

It's my belief that the "American Dream" of home ownership has probably been a net negative on society in the last 50 years. We should look to housing models used on European socialist democracies.

Rents and homeownership usually are reciprocal. If rent costs rise too much, more renters buy because it is cheaper to buy, which draws down apartment rents.

But easy money has funded huge money firms buying housing, and this is pricing many who would buy out of the market. So rents are higher than they would otherwise be. This leaves the housing market fundamentally imbalanced, with extremely low apartment vacancy rates but many vacant homes.

http://www.bloomberg.com/news/2013-10-24/families-blocked-by-investors-from-buying-u-s-homes.html

When 40 percent of home sales are funded by cash, ordinary families are acutely disadvantaged. Housing prices are rising too fast in relationship to average earnings.
http://www.reuters.com/article/2013/10/01/us-usproperty-apartments-report-idUSBRE99004W20131001
This leaves apartment vacancy rates at a very low 4.2%.

But rental home vacancy rates are rather high, largely because many cannot afford to move in those homes:
http://www.mortgagenewsdaily.com/data/home-vacancy.aspx
Note the 8.2% rental home vacancy rate!

Those who have minimal downpayments are forced to rely on FHA to purchase, but the steep rise in FHA insurance is causing housing to become more unaffordable for them. So they can't buy, and they are staying in apartments.

This is not a stable situation. Those worst impacted are on the bottom end of the economic ladder, who may find themselves utterly squeezed by rent or even homeless.

and prop up the prices that maintain the illusion so that their agents can continue to extract unearned profits.