alt Hacker NewsHousing can not be a viable asset class, or it will continue to rise in prices. Step 1 is Land Value Taxes. Step 2 is remove/greatly reduce zoning, allow construction and streamline the process. If you allow density, building up, and incentivize it, then it will be built. Developers spend tens of thousands of dollars in permits and interest payments before they can put a shovel in the ground. Being a landlord isn't really an issue, morally, ethically, or with regards to people buying houses. The issue is when there are limited number of units, and people turn them into investments.
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The issue is not investment at all, we want more investment into housing.
But you are absolutely correct you cannot both want housing to be a good investment (increase in value faster than inflation) and an affordable (drop in price lower than inflation).
Don’t subsidize demand. Allow more supply. Private homeowners, big developers, all of the above. Build.
Why is immigration always absent from these discussions on HN? the US has absorbed millions of people through immigration (both legal and illegal) which puts pressure on housing supply which drives up prices since supply is relatively inelastic. Enforcement of immigration policy would increase housing supply without needing to build more capacity in the short term and would lower prices.
People say things like this, and yet housing has -- for most of history -- been a viable asset class, including in the times that people idolize as the great boom times of America.
The main issue is mismanaged regulation, as always. Real estate is probably one of the best examples of that. For example, in my city of Portland, OR, it's easier to keep an existing structure and not build new housing than to build new housing (because then you can do things by right). To build new housing, you have to hire a company called 'faster permits' (seriously, that's what it is called, look it up) which promises to 'expedite' the process of having things approved. If you, like me, are skeptical of engaging in investments in which you have to bribe your government to approve housing, then you won't put your money into building housing. Portland is probably not alone in these sketchy arrangements, which is why real estate developers often seem sleezy -- due to how the government manages itself, only the sleeziest people are willing to engage at all.
We shouldn't allow people to hoard housing and land. That’s the core problem here. It should be super expensive to own more than one property. I refer people to the Housing Theory of Everything [1].
I disagree with the Ultra-YIMBYs who believe in removing all zoning and regulation. If you do that, you get Houston. Because that's what Houston is. What we need is to prioritize living over investment returns in housing. Part of this (IMHO) is to have expansive social housing like Vienna to compete private land use "honest". Also, we should really not allow rich enclaves. There should be social housing in every ZIP code.
[1]: https://worksinprogress.co/issue/the-housing-theory-of-every...
I've posted it already, but at least in my country (Netherlands) it seems like the problem isn't the lack of housing, but lack of marriages. If people ages 30-60 married each other at the rate they used to in 60's, then there would be no housing crisis.
The statistic that doesn't compute for me is how is it possible that we're having a housing crisis while at the same time we have historically low average number of people per house.
I’ve been part of housing-related online discussions for a decade now, and everything reads like a wish-list.
- Majority of people own their homes. So it’s in their best interest for the housing prices at the very least not go down.
- Less, but still, some amount of people are buying houses with sky high prices. After a huge purchase, they will also do their best to ensure prices don’t go down.
- Another good chunk of people are waiting out to inherit homes from their parents.
All these people, in one way or another, will protect asset prices (e.g. voting for certain people to ensure nothing gets built). The only ways I can see it being resolved is:
- China-style benevolent dictatoresque commitment to surgical detachment of housing prices from the general economy (they’re trying, a lot of people are unhappy, but some progress is visible)
- Population collapse, to reduce the demand. But looking at Japan, metro areas will keep skyrocketing, because people will flock to the main cities even more
Any of the options will make a lot of people unhappy. A huge political no-go zone.
All the talks about allowing construction and streamlining the process have been circulated for a decade+ at this point. But incentives for people aren’t there. “I got mine, don’t care about you” is the general attitude of majority of people.