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It's not so simple. The value of living in cities has increased because of economies of scale, population has grown and space in cities is limited. It's not like people want to build houses in the middle of nowhere. It does not follow that a positive return on real estate means that we're worse at producing shelter.

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when the price of something goes up, it means we're getting worse at producing it. It doesn't matter if you're using new technologies. what matters is results. If a gallon of milk goes from 2$ to 2.50$ inflation adjusted, then we've gotten worse at producing it (increase costs), etc. And, by gotten worse, I mean in aggregate: (this includes price of land, zoning laws, regulations, NIMBYs suing developers, insurance, frequency of huricanes, etc): all these things can make us get worse at developing shelter. What you'll notice about all these causes is they're directly or indirectly all Self inflicted.

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