The Only Way to Avoid Third-World America
Andy Snyder|October 6, 2021
Welcome to third-world America.
Or should we say welcome back?
As we continue to add up all the reasons we must invest and make the most we can out of every dollar, we come to another gruesome trend.
It’s the end result of so much of what we’ve pointed our calloused finger at.
We’ll start with a few facts.
Over the last 40-some years, the average American home has ballooned in size. In the 1970s, the average home was 1,660 square feet. Today… it’s 60% bigger, at 2,687 square feet.
All of that extra space, of course, comes with a cost.
Since 1999, the median home price has more than doubled – from $111,000 to $269,039.
In California, the average home price hit $818,260 in May. The same time last year, the average price was a mere $588,070.
That’s a 40% increase. Insane.
Why are prices rising?
Oh, darling, let us count the reasons.
There are things like Proposition 3, which inadvertently created more retail space than homes. There are wonky and expensive regulations, like forcing solar on all new builds. And then there are piles of cheap money… soaring material costs because everything causes cancer in California… and, of course, lousy zoning laws.
It’s all led to a big problem – a housing crisis.
But the governor recently found a fix… a third-world fix.
A Tiny Solution
In many parts of the country – including areas where we’ve owned some land – it’s illegal to build a home that’s less than 700 square feet. In some areas, the minimum size jumps all the way up to 1,000 square feet.
The neighbors wouldn’t like seeing such a tiny shack outside their window, the zoning folks say.
The property taxes wouldn’t be high enough, our keepers decree.
And besides, “Who would want to live in such a tiny house, anyway?” those fancy Joneses will ask, sticking out their pinkies. Ick.
We can’t imagine the nation’s founding patriots ever considering such atrocious regulations… but then again, they never had the pleasure of meeting an ambitious code-enforcement officer.
But all this is moot now… at least in the Golden State.
There, the pendulum has swung so far in the opposite direction that it is about to come off its mount.
Homelessness and unaffordability are such big problems in the state that the governor recently signed a big bill into law.
It allows almost every property owner in the state to build what are called “accessory dwelling units.” They’re essentially miniature homes of just a few hundred square feet that can be built in a backyard, above a garage or on the side of an existing home.
The logic – dare we admit it – makes great sense. Let the people do what they want with their land.
The rationale behind and need for the move are scary, though.
Divided We Fall
This rather desperate move was made for obvious reasons. It will help flood California’s market with countless new tiny homes and apartments. It will not only give homeowners who are stretching to pay outrageous mortgages some added income, but also the average fella a place to sleep at night.
It’s that second idea that scares us. It’s what has us pounding the table, begging people to wake up.
With the hodgepodge regulations (financial, zoning and even tax laws) we’re seeing all across the country, we’re creating two classes of citizens.
One group lives in the big house out front… the other lives in the shack out back.
We’ve been all around the world. We know where this goes.
It ends with large families crammed into tiny brick huts. In Belize, they build one room at a time… each generation adding on when they scrounge enough change for a few more bricks.
In Nicaragua, families stare from their dirt-floored homes as cars pass by with luggage in the trunk that costs more money than they’ll see in a year.
What keeps us from such a fate isn’t divine intervention or grand luck. It’s wise laws, smart regulations and a free economy.
As we see a dearth of all three, we come to a simple conclusion.
There’s only one way around all of it… make every dollar count.
Make sure you live in the house out front.
Andy Snyder is the founder of Manward Press, the nation’s premier source of unfiltered, unorthodox views on money and what it means for a free society. An American author, investor and serial entrepreneur, Andy cut his teeth at an esteemed financial firm with nearly $100 billion in assets under management. Andy and his ideas have been featured on Fox News, on countless radio stations, and in numerous print and online outlets. He’s been a keynote speaker and panelist at events all over the world, from four-star ballrooms to Senate hearing rooms. Today, Andy’s dissident thoughts on life, liberty and investing can be found in his popular daily newsletter, Manward Financial Digest.