Guam faces looming housing crisis as prices rise
In 2020, the world changed as a global pandemic took over and pushed the global economy into a deep recession. Businesses closed down, unemployment rates went up, and many people were left without places to live as rent fell and the amount of housing went down. Many people took advantage of low rent prices at the end of 2020, but as some leases are starting to expire, these leases have increased by as much as 50%. In Guam, at the end of 2021, the all-time high for a single home was set: $375,000, a 12% increase from 2020. Now, the housing crisis is arising again and the lack of affordable housing is causing a major problem for Guam’s middle-class.
Housing has been a problem for the residents of Guam for years. For example, in 2017, a single-family home was $240,000 and only $200,000 in 2013. While these numbers are immeasurable when compared to the price of a house in 2021, these numbers still make it difficult for a middle-class family to afford their mortgages on mainly private-sector salaries. Those contributing most to the uptick in housing prices are the military personnel living on the island. Military personnel make up 7,000 of the 160,000 on the island and a third of Guam is military-owned, leaving little space for civilians.
But why is the military a cause for increases in rent? Military renters make up one of three major markets for landlords in Guam as they are granted Overseas Housing Allowance due to the fact that they live overseas. As the Overseas Housing Allowance covers exact rent amounts, military officers are incentivized to rent out high-valued housing. While these officers are taking advantage of their compensations, it causes inflation in the economy and elevates house prices.
my response from reddit
Either way, the article is not only incorrect but could be much better. The author states:
> Those contributing most to the uptick in housing prices are the military personnel living on the island. Military personnel make up 7,000 of the 160,000 on the island and a third of Guam is military-owned, leaving little space for civilians.
You’re misinterpretation the facts, 1/3rd of the island are military bases not that the 7000 military members own 1/3rd of all of the homes on the island. Maybe you are trying to say that there is a lack of land to develop, or that they could be homes but that’s kind of a stretch considering so much of Guam is undeveloped anyways. Furthermore, the Navy has had a “net negative” policy for as long as i can remember so we’re giving unused land back to the island every year. So considering prices are going up and the amount of land the military owns is going down it disagrees with your point because you’re trying to compare home ownership over time.
The article you want to write instead is “Military OHA makes Guam an attractive place for foreign investors pricing out local residents”. Because Guam is technically considered “overseas” for the military housing allowance, members are held to a different set of rules than they would be living in the rest of the US, and it messes up the rental market. Military members cannot negotiate rates for rent and it ends up with them paying way too much for housing which other residents cannot compete with.