Shervin Pishevar blames Fed for current unaffordability of housing
Since the Federal Reserve began its quantitative easing and zero-interest-rate policies, the housing market in the United States has long since recovered from its 2008 lows, reaching new highs across much of the country. But this has not been good news for everyone. It turns out that when markets don’t grow organically, there are often big winners as well as big losers.
Shervin Pishevar rails against Fed interventions
Shervin Pishevar has been one of the Fed’s most vocal critics throughout the world of tech finance. He is the founder and CEO of Investment company. And Shervin Pishevar has been involved in the creation of some of the top tech firms in the country, including Airbnb, Uber and Social Gaming Network.
Shervin Pishevar points out that the huge housing recovery has not uniformly produced winners. In fact, it has really only benefitted those who already owned property and managed not to lose it in the mortgage meltdown of 2007 and 2008. For the rest, the housing market runup has been something to dread rather than celebrate.
Read more about Shervin Pishevar at Bloomberg.com.
Throughout the country, many cities have never been more unaffordable for the median worker. In cities like Los Angeles and San Francisco, the median worker would have to spend nearly every waking hour at work just to afford the median home. It is not surprising, then, that cities like San Francisco and Los Angeles are experiencing unprecedented homelessness epidemics.
Elsewhere throughout the country, things are not looking much better. While wages stagnate or even decline, workers are having to deal with massive inflation in housing costs. And many of these workers simply cannot keep up with these increases. For young families, this also means that many of them will not be able to do the thing that most young people would identify as being the key part of starting a family: affording a decent home.
Shervin Pishevar says that all this amounts to a perverse generational transfer of wealth, from the young and unlanded to the old and property owning. He sees a sharp reversal in the country’s future, however, as the Baby Boomers begin exiting the housing scene.