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Each month, we use IBM Watson’s tools to assess the sentiment of hundreds of housing news articles about the US housing market. Here are our observations on the top housing media trends in January 2018:
Summary of January News
Tax Reform Hits Hard
Housing news continues to be dominated by conversations discussing potential outcomes and effects related to the recent federal tax legislation. HousingWire cited a report by analytics firm HouseCanary that took a “hyper local” approach to estimating the effects, concluding that, with their ultra-high home prices and higher tax rates, parts of the San Francisco-Oakland-Hayward, San Jose-Sunnyvale-Santa Clara and New York-Newark-Jersey City housing markets will feel the brunt of the effects.
HELOCs on the Rise
Another common thread in January housing news media is the recurring theme of high home prices and a paucity of housing supply, spurring related conversations about homeowners tapping available equity for large purchases or home renovations.
Rent Control Proposed as a Solution to High-Coastal Housing
Central to the discussion of expensive, scarce housing is the ongoing coverage of California’s battle to preserve affordable housing, with proponents of rent control organizing ballot measures to repeal the state’s so-called Costa-Hawkins law, which has restricted cities and counties from establishing local rent control measures. Activists point to Costa-Hawkins as a primary cause of massive rent increases and a surge in homelessness, while opponents of rent control argue that price controls stifle new construction and dissuade proper maintenance and upgrades, while ultimately increasing the overall price of housing. Further convoluting matters are NIMBY (“Not In My Backyard”) attitudes – largely among existing homeowners – that oppose new construction projects for reasons that include preservation of neighborhood character, concerns over property values and access to parking.
Accessory Dwelling Units
California’s success or failure to alleviate the chronic shortage of affordable housing will be closely followed throughout the year and may serve as a model for other high-cost coastal housing markets that face housing cost challenges for low- and middle-income residents. One creative solution the state has proposed is to ease the regulatory and cost challenges when building “granny flats” – small units squeezed onto existing properties that may be used to house aging parents but are increasingly touted as a cost-effective way for municipalities to facilitate new affordable development.