alt Hacker NewsMost interesting proposal I heard on this topic, is that the solution to housing prices is to ban renting altogether.
It's so radical that it's almost impossible to predict if it would be better or worse. But at least it had the moral ground that rent is one of the last remnant of pre-capitalist lords and barons economies.
The idea being it would commoditize housing. Millions of units would now be for sale, prices would drop, tons of people would now be able to afford buying. Home builders would be incentivize to build nicer, cheaper, as the competition would move entirely to the selling/buying market.
It's radical for sure, but I've always found the thought experiment fascinating.
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Prices would drop where homes are commonly rented. I suppose rent could turn into lease to own in the interim period. It’s an interesting idea, I wonder if any economists have played it out.
What about those people that have homes but rent out a room? Or a townhouse that has 3 units, but the landlord lives in one?
I guess they could sell the units or move to a smaller place, but I think there may be an adverse effect of potential housing staying locked up because there isn’t a legal way to preserve options of ownership. It may decrease housing in some instances. Which force is more powerful though, I am not sure.
Unfortunately this is the type of magical thinking that gets passed off as serious policy analysis based on nothing but anti-capitalist dogma. There is no evidence to support these conclusions, and in fact plenty of evidence that it would worsen the housing crisis.
It wouldn't work. Good luck trying to enact that. Also, the amount of leftism in this thread is like a pure-sugar-diet for Marxists. When houses have no value, people don't value them. Look at what happens when you give large amounts of people free housing, what do they do with it?
What would happen to those who can't afford to buy? Say student just turned 18? Continue to live at home and gather some money for down payment? Who would keep these assets and maintain them until next buyer comes around? What if there is no buyer and they make loss?
There is nothing inherently wrong with renting. The landlords provide capital that renter lacks for time being. But due to supply constraints prices have been driven too high.