alt Hacker NewsHousing crisis is just a result of increasing income inequality and the resulting real estate investment craze. The population of America (real demand) did not suddenly double at any state/city.
Rich have become so much richer that can afford bidding wars at unattainable prices. They can buy investment homes and be cashflow negative for decades in anticipation of the increased market bidding prices. Of course they oppose any sort of legislation that would increase competition.
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This seems like it contributes to the problem, but doesn't feel like the root cause at all. Every homeowner, not just the ultra wealthy, has an incentive to oppose new housing. (Though in many metros any homeowner is automatically wealthy by some definition). The lack of supply seems like the core issue here.
What if the housing crisis is what's causing wealth inequality? Piketty's data pointed to this.
> The population of America (real demand) did not suddenly double at any state/city.
The population has literally doubled multiple times, and housing supply has not increased. There used to be significantly more units per capita.
A lot of the time it's not rich people bidding over a home, it's people in a game of chicken to see who will put themselves in the worse financial position.
The population of a place doesn't have to double, or even change at all, for prices to go up. All that is necessary is for more people to want to live in a place. Those with the $ to satisfy that desire will outbid those who don't and you can easily double/triple/10x prices with no change in population.