Hopefully, Reno won't be tempted to "solve" their housing crisis with rent controls!
I think that in the coming 10-20 years we are going to see affordable housing crises all over the country. Mom 'n Pap Boomers are getting older, poorer, less healthy and downsizing. They won't need or want to mess with 2000 sq ft+ homes with yards and stairs leading to basements.
In general, I think there will be three groups:
First, the top tier who can afford whatever they want: big or small, simple or chic'. Not sure what they'll do eventually, but this will be a small percentage....less than 20% I would guess based on savings and stats put out by retirement planners. They won't be significantly impacted by looming cuts to Social Security and Medicare.
Second, the group who is squeezed by a lifestyle they can no longer afford, but who have enough equity and savings to get by with Govt retirement checks. They'll downsize to about 1100-1500 sq feet with a small back yard patio and either HOA-provided or personally hired lawn care. Maybe have a shrub or 2 and a postage stamp yard for a small dog. My SWAG on this group makes up anywhere from 25-35% of the total Boomer population.
Third, the ones who have nothing saved and depend entirely on Govt checks and family. They may bunk up with their kids or move to small one-bedroom houses/apartments or trailers. My guess here is about 40-50% of the population will fall into this group. Most are probably already living in fairly humble housing, but they may have to go even humbler to make ends meet.
The middle (second) group is the one that's going to squeeze affordable housing. As they downsize, they'll drive up rents and possibly drive out low-income renters.
I don't know the entire US market, but if it's anything like mine NO ONE is building 2 bed SFHs. Everything is higher-end "trendy" eco-partments and lofts that cost three times the price of a 3 bedroom home and are basically in downtown areas where hipsters come home to roost in between bouts of extreme urban living and pub crawls. ;-)
The cheapest "starter" SFHs in my market run from $80,000 - $120,000. Multiply price by 2-2.5 times if you live in a major Mid-West or coastal metro area or 3-4 times if you live in Cali/Hawaii to get an approximate equivalent. These aren't being built, but rather rehabbed from existing stock of 2-3 bed homes.
Builders doing starter 3-bed spec houses in my town are in the $130K - $200K range. There's no money to be made in anything smaller. At 6% which is fair I think based on how rates are trending upwards, that $600/month P&I even on a 30-year note...and not sure too many banks will do that for older folks. Add in taxes and insurance (+$150 or so), and the bottom group won't be able to afford those even if their credit would qualify them for a loan (doubtful). Middle group might, if they've got equity and a large down payment and haven't spent all their money on timeshares. (wink!)
So how to solve?
I think mobile/trailer park and other "low cost" housing units will be big. Maybe opening up tracts of desolate land inside city limits or just outside to avoid the NIMBY-ers. Maybe cities will relax zoning requirements and offer decade-long tax abatements for investors/developers who can throw up 100-200 units and keep the lower income citizens off the streets.
Class D/C rentals will stay strong, I think, as will the lower end of Class B. Dunno about anything higher than that...maybe the Millenials will finally move into those.
Anyway....always fun to speculate on how these trends will develop. Reno and other higher cost markets will lead the way. Keeping eyes open!
--173.20.xxx.xxx