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Comment by BreakfastB0b | Hacker News Reader

Housing can either be affordable, or profitable, not both. Affordable means that the price of a house remains stable relative to inflation or wages. Profitable means it has to grow faster than inflation or wages. Everyone needs somewhere to live, therefore housing should not be profitable. You shouldn’t be able to make a tonne of money by just buying a house and sitting on it. Investing in housing should mean improving existing housing or building new housing.

Here in Australia the government is talking about letting young people access our equivalent of their 401k to afford a deposit on a house. Without changing the supply of housing how is this anything other than another attempt from boomers to steal more wealth from their children so they can line their coffins with more gold.

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The answer to this particular problem is Georgism and a Land Value Tax.

It strongly disincenctivises speculation and incenctivises productive use. It ensures that a person claiming ownership of land makes more productive use of it than the cost of depriving society of use of that land. As a cherry on top, the income from LVT can be used to reduce taxes on labour, or simply to be given back as a citizen's dividend.

I wonder if there's a good way to sell such a concept onto a political landscape. Anyone who already owns anything would want to keep things as they are. Feels like a very central political problem.

Those that have accumulated wealth and power it would be in their interest to increase rather than decrease the scheme-ines of the political system.

This concept has to have a name?

I think regulatory capture applies here (https://en.wikipedia.org/wiki/Regulatory_capture)

> Anyone who already owns anything would want to keep things as they are. Feels like a very central political problem.

Indeed, jt is perhaps the most central political problem: how does a class that doesn't have power wrestle it from those who already have power?

As for the name, how about "human history"? :)

What you are describing is status quo bias I believe. This political structure is also oligarchy.

It would only do this if LVT were significantly higher than property taxes. Because property taxes already includes the value of the land.

E.g. my "house" is valued at 700k. But the appraisal puts that at $280k structure and $420k land. 1% of 700k is 7k, but 1% of 420k is 4.2k.

Indeed, the idea of LVT/Georgism is to charge, if not 100%, then close to that amount of the rent commanded by the (unimproved) land. The very idea of the whole thing is that, in order to claim a piece of land for your own usufruct, you need to compensate the public for taking that piece of the commons for yourself and walling it off and preventing the rest of the community from using it, i.e., you owe the community a market rent for that piece of land.

We can fiddle around the edges, e.g. the tax being 50% of market rent rather than 100%. But the principle remains the same.

Note also that houses used as main dwellings would be exempt or pay a heavily reduced rate.

EDIT: So taking that example, let's say your house rents for 1000$ (I've no idea if this is reasonable or not). Land according to your appraisal is 60% of the property value, so land rent, that is, what you owe as LVT, is 600$/mo or 7200$/yr.

> Note also that houses used as main dwellings would be exempt or pay a heavily reduced rate.

This isn't usually part of LVT proposals, and for good reason. LVT should apply to all land everywhere, or else it becomes much less effective.

And the way to keep this reasonably neutral (ie not dump a massive tax out of nowhere on people), is that LVT replaces at least a portion of say, income tax. That makes it politically viable as well.

I would imagine this would have a weird effect on land values if enacted. People couldn't afford such a large tax, so prices would generally go down. Since the value of the structure won't go down (because that's based upon cost to build) loss of value would 100% go to the land, which would lower the LVT. But the price to rent wouldn't necessarily go down, since the total ownership cost wouldn't go down.

It obviously would hit an equilibrium at some point but I'm not sure where.

A secondary point of something like an LVT is to encourage density, since you get %0 taxation on the building itself, so it can afford to be more expensive. What uses less land, less energy and requires less miles of pipe, wiring and roads to service? A high rise with mass transit train service. A 50 story building on the same size of land next door to a 5 story building will have an approx 10x overall lower tax rate per sqft.

Land developers and people would naturally become economically incentivized to live in apartments as a result, unless they live somewhere somewhat rural already.

Would an idea like this but applied at increasingly higher rates as you own more homes work? For example, owning a single home, you pay a certain amount, if any. Want to buy a vacation house? Start paying n% LVT. A third vacation house? n*1.2% LVT etc. Are you a pension fund buying up 80,000 single family homes? Tax should be so high on owning this many homes you wouldn’t want to do it.

In my state we already have this, it's called a homestead exemption, however it only applies to the first house.

As a Canadian who now lives in Australia, I'm astounded by the levers the Australian gov't will pull in order to keep the housing market "booming".

In my 10 years here I've seen them split them make it difficult for foreigners to buy existing houses, but easy to buy off-plan https://treasury.gov.au/sites/default/files/2019-03/Stronger...

I've seen them restrict the amount of money retirement plans can use to invest in equities, promoting the use of more funds going to real estate (this was my understanding of the changes) - https://en.wikipedia.org/wiki/Superannuation_in_Australia

And now including your housing as part of your superannuation, which I wasn't aware of.

Every time I think they've run out of levers to pull, they find another one.

When I arrived here in 2011, I thought real estate was cheap compared to rents, that equation has completely flipped.

> I've seen them restrict the amount of money retirement plans can use to invest in equities, promoting the use of more funds going to real estate (this was my understanding of the changes)

I don't believe this is the case and haven't seen any coverage indicating a change like this.

> And now including your housing as part of your superannuation, which I wasn't aware of.

No, it's the opposite. You can withdraw part of any voluntary contributions to buy your first house. See https://www.abc.net.au/news/2021-05-13/budget-superannuation...

> When I arrived here in 2011, I thought real estate was cheap compared to rents, that equation has completely flipped.

As long as it's possible to negatively gear unrelated income while building up a property portfolio it makes sense that people will be happy to lose money on rents in order to take advantage of capital gains discounts down the track.

> Here in Australia the government is talking about letting young people access our equivalent of their 401k to afford a deposit on a house.

Which will have the effect of pushing housing prices even further. It’s like the government providing ever increasing student loans, if you don’t change the supply curve it just increases demand which pushes prices higher.

> Here in Australia the government is talking about letting young people access our equivalent of their 401k to afford a deposit on a house.

We do that in Canada. I don't think it has helped with the affordability issue at all.

https://www.canada.ca/en/revenue-agency/services/tax/individ...

Of course not; it encourages home prices to keep going up, because people have access to another source to fund home purchases. The problem is, of course, that tapping your 401k-equiavalent is a long-term bad move unless you have a way to quickly put that money back without skimping on other things.

It worked out pretty well for many of my friends' parents, who bought houses in the American West, raised their kids, and then sold their now incredibly valuable homes to retire to small towns.

Doesn't work so well when houses are expensive.

Why would the expectation be that it helps affordability? On an individual basis, having access to more money means you may be able to afford a home that would not have been within your means.

In aggregate, everyone having more access to more money means inflation.

Access to more money for a specific good or service means inflation concentrated in that category. See: college tuition and home prices in the U.S.

> Access to more money for a specific good or service means inflation concentrated in that category. See: college tuition and home prices in the U.S.

100x this. Financial policy giving everyone access to cheap mortgages has got to be one of the stupidest things governments have done in the last 30 years.

The problem with that is it only allows a maximum of $25K, which in Toronto's market barely makes an impact on the downpayment.

It's $35k now.

That's better, but still far away from a significant useful amount. When I bought my first place in 1999, my downpayment was $12K which fit nicely in the allowed amount. Not so much anymore.

The reason this doesn't work is that people want to live in very specific places. If you aggregate at the national level, the cost of land or housing hasn't gone up all that much in America over the last century. For every San Francisco there is a Detroit to balance things out.

Having looked around a bit lately, it seems to me that if you don't buy in a major metro area, and you buy a house that was built in the 1950s, you pay something that, inflation-adjusted, would look reasonable to someone in the 1950s.

But lots of people don't want to live in houses that small. Well, if you want more, you pay more.

And maybe the comparison isn't fair. In the 1950s, those houses weren't 70 years old, but they are now...

Housing can be both affordable and profitable with a organized system of infill development. eg: You buy a single family home in an inner ring suburb in 1990 for $150K. You sell it in 2021 to a developer for $2.1M (9% RoR), the developer tears it down and spends $1.5M to build 12 apartments on the same footprint of land that sell for $350K each (~400K profit net transaction costs). People in 2021 are paying the same amount for housing as you did in 1990 but you also made a good return on your investment.

That sounds like it is affordable and profitable if you are in the top half of incomes.

In that situation - a renter who made ~40k a year (in today's dollars - probably 30k in 1990 dollars) in 1990 could not afford a single family home and had to deal with expensive rents (because the city didn't allowed apartments buildings where there was demand).

The critical thing is that this also requires a growing population - which is not guaranteed in all places/timeframes!

So what you're saying is housing was affordable in the 1990, but not you're paying twice as much for a much smaller space.

It is also worth noting that in the example above (assuming we accept the 150k as normal and that growth as typical) that 150k was a solid amount of money.

In 1990 the median income for someone with a a high school diploma was 26k. For someone with a masters degree it was still 50k. An educational attainment was lower across the board.

So if you didn't have 150k then I guess you're screwed since they weren't going to let apartments to be built for so long? The only situation where you'd get that ROI is if the supply of houses had been constrained strictly for so long - which almost by definition means that rents grew at that rate too.

Apartments are not family homes.

That’s funny because I see lots of families in my apartment building.

It seems like many westerners aren’t aware that there are high quality 3-4 bedroom apartments available with easy access to schools, parks, everything else.

The parent is displaying typical American thinking, i.e., a family requires a suburban house with grass lawn and two cars to go anywhere.

Two? More like one for each member age 16 and up. That's how it was in my family. I'm glad these days to live in a human scale city and car free.

There is so much ignorance about apartments in Australia as well. I moved in to one recently after living in the suburbs my whole life and knowing no one in an apartment. Basically everyone tried to tell me it was a horrible idea and it would be super noisy, annoying neighbors, "shoebox", etc.

I did it anyway and I can't believe how everything I was told was wrong. With the high quality construction and double glazed windows, I have never heard such a level of silence. I keep the windows open because its so quiet you would go insane. It was a month before I even worked out the neighboring apartment was even occupied when I saw them exit at the same time as me. I have never heard a single sound from them.

And the best part is how liberating it is to live without needing a car. I have just walked everywhere and only use the car to visit my parents but I will likely get rid of it soon and have them come here instead.

> The parent is displaying typical American thinking

The parent has lived in a country house than decades in multiple apartments. The joy of having neighbors next wall, ceiling or floor. The lack of air conditioning if you're in a country where it's not usual and you have to fight to get the authorization to install it. The sound of cars, bars etc.

This is absolutely 100% wrong, and I don't know where it comes from.

Right, and then you subdivide again and sell to squirrels, and then subdivide and sell to ants, and so on until you are selling to subatomic particles. What then?

This is just uncreative thinking. Diversify outside of the physical world. Ideas live rent free! Are you seriously going to sit there and tell me that that's acceptable?

Time And Relative Dimensions In Space

An alternate progression could involve exponential height growth, leading to every suburb eventually looking like a cluster of space elevators (and beyond).

You build up and down.

Have a look at Hong Kong - it's amazing seeing the 1960s building, the 1980s building and the more recent buildings next to each other and the height increase.

I think your calculation includes a yearly inflation rate of 9% for property, and also it includes an inflation rate for housing of about 34% if you consider that 1 apartment may equate to perhaps 1/8th of a single family home on the same plot of land.

> You shouldn’t be able to make a tonne of money by just buying a house and sitting on it.

But humans occupy physical space. Almost everyone would prefer more privacy and space to less. Hence if the human population keeps growing, the price of having physical privacy and space will also keep growing. It’s just the bitter reality of it.

In addition, often times the architecture or established land use patterns of certain neighborhoods act as an upper limit on population density. It really grinds my gears when people advocate for essentially paving over these crucial neighborhood characteristics. This effectively destroys local culture in the name of “inclusivity”. Granted, there are definitely more neighborhoods without any unique character than not, and it’s hard to feel any sympathy for paving them over. But there are certainly quite a few neighborhoods globally that are quite special, and in these places inclusivity tends to be a tragedy of the commons scenario.

How do you define a neighborhood characteristic? Usually it's nothing but an arbitrary snapshot in time that some folks decided is ideal and should be frozen. Curiously it tends to correlate with the date they moved in to the said neighborhood.

> How do you define a neighborhood characteristic? Usually it's nothing but an arbitrary snapshot in time that some folks decided is ideal and should be frozen.

Usually so, but sometimes not. What are the characteristics of Gion Kyoto, for example?

I think that is to say that land needs to be taxed quite heavily. If you're taking up a lot of space, you're keeping important resources tied up in nothinh

Sounds like you want to significantly increase the price of housing to do…?

I'm definitely sympathetic to this argument, however, considered in the limit, it does become pretty absurd. How long do you want to maintain the character of the neighbourhood for? 10 years? 20? 50? 100? 500? 1000? 10,000? Such a 'character' may be a grotesque luxury that future generations simply cannot afford to keep around.

Then we’re essentially debating what the value is of preserving our ability to experience beauty. And what’s life without beauty?

Why the downvotes? This is a very useful viewpoint IMHO. The generations alive have clearly prioritized growth over many other factors.

It’s hypocrisy to want to “keep the character of the neighborhood” and have more than the bare replacement number of children, since you’re creating a change in the demands on the neighborhood.

Most writeups of population growth rates and the economy focus on the economic benefits of more children, not the quality of life for the future generations. Future generations will not miss a Monarch butterfly or any species of tortoise or rhino just like we don’t miss the passenger pigeon or herds of a million bison, or being able to see a Milky Way we’ve only heard about. They might, however, be a bit put off by the water quality we’ve left behind, and let’s face it, we’re not all going to see an unspoiled wilderness because there’s relatively little left. Night sky is already abuzz with satellites.

> You shouldn’t be able to make a tonne of money by just buying a house and sitting on it.

Maybe you should instead think of it as sitting on a piece of _land_, not a house. Twenty years ago you bought a house in the middle of nowhere, now because of people moving to the area it’s desirable and thus worth a lot more. Whose fault is that?

One could argue that if the community expanding over a couple of decades is what made a house more valuable then it would be appropriate for the community to receive the profit, and not the home owner who just sat there.

The problem in Australia in particular is that you're running out of land. The four major cities are surrounded by water and nature preserves. As population increases, demand runs up against a very inelastic supply. The only policy solution would be to strongly emphasize dense high-rise development.

I'm not sure Australia has a land problem in general, population density is quite low (I understand that a lot of the land doesn't support high density living). They have an issue in that their major cities have some constraints on perpetual outwards growth. Maybe this will help encourage remote work and relocation of offices to places that aren't the core downtown area of Melbourne and Sydney?

There is very limited land in places where you want to be. There is endless land in the middle of nowhere but that isn’t very useful for most people.

This comes up often in these discussions but, barring any indigenous lands, there's nothing especially inhospitable about central aus. Las Vegas is in the middle of a damn desert, and Arizona/New Mexico are both extreme climates compared to much of the US but they are still livable and many people actually prefer it. I can't see why this would be any different in Australia...

It’s not about how possible it is to live, it’s about places people actually want to live. There is virtually unlimited land with good climate. But people don’t want to live there because it’s far from everything. Most people have picked paying more to live closer to events, jobs, stores and friends.

Australia doesn’t have the population to start a new major city in the center. There are still multiple cities like Adelaide which could grow instead.

Australia is definitely not running out of land. Sydney continues to grow further and further west, and there are now multiple Sydney cities including CBD, North Sydney, Chatswood, Paramatta is undergoing huge development, and Penrith is next on the cards. I fully expect to see Woolongong and further south continue to boom as well as central coast and Newcastle over the next 20 years.

My understanding is Melbourne is seeing a similar result with people and companies continuing to move out toward Geelong, but I'm not there, so don't know.

I was in Brisbane last week, and that is an amazing city, and it also seems to have lots of room to grow.

Perth is quite a small city, and I believe could easily grow.

> The only policy solution would be to strongly emphasize dense high-rise development.

We don't need more high rises, we need more medium density 3-6 story buildings, that gets you more density far cheaper than high rises. Melbourne in particular has a lot of areas that are still single family houses with good public transport walking distance from the CBD, unfortunatley NIMBY's across the full political spectrum don't want this increased density.

At the federal level they want high immigration, but at the local level they don't want immigrants to have anywhere to live in their suburb. Until local and federal policies align one way or the other housing prices will continue to increase.

> Profitable means it has to grow faster than inflation or wages.

That is not what profitable means. Returns on investment in housing consist of: 1. rental yields, and 2. capital gains (i.e. change in price).

You cannot say whether housing is profitable or not (or affordable, for that matter) only by considering number 2.

That’s true, I didn’t figure in rental yields at all. Consider it a first order approximation. Would anyone rent if it was more affordable to buy?

I’d still have rented while in college. I’d still have rented for my first two or three places after college. After that, I bought a place, lived in it for a while, then moved and rented in the city in two places (including one with a girlfriend which seems like a bad idea to jump right into home ownership), then bought the house I live in now.

There’s plenty of beneficial flexibility afforded by renting, even if you can afford to do either one.

Plus, if housing doesn’t go up in value like an investment, why would you want to tie up a downpayment and tie yourself down, losing money all the while? You’d have more incentive to rent and invest your down payment money.

Rentals should always be more expensive than buying then, no? You're gaining a service overtop of the place to live. Not to mention, you should be able to leave atyhe drop of a hat, rather than be required to have a 1 year lease

Renting hotel rooms is more expensive than a month-to-month lease is more expensive than a year-long lease, so that all checks out to agree with your premise.

Whether renting or buying is more expensive depends on your market’s outlook for property prices. But in an environment where they don’t go up, I’d definitely expect renting to cost more.

Building equity isn’t “losing” money. It is tying it up, sure. If you have enough free cash so that investing beyond rent gives you a decent rate of return, great. In high-rent parts of the country, rent sucks enough you don’t have that. And, your landlord can kick you out in the middle of a school year if your lease is up.

Tying money up in a vehicle that grows more slowly than its likely substitute investment is “losing money” in one’s total financial picture. If it grew more slowly than inflation, it could remain affordable to others but terrible for the present owners.

I’m pro owner-occupied housing. I think it’s good for families and good for the community/society. But in the hypothetical where it grows more slowly than inflation, renting starts to look a lot better than it does currently.

Over a long enough term, it’s cheaper to not piss away all your money on rent. Early-2000’s real estate mania aside, crashes in price are not all that common. Building equity is preferable to building nothing at all. Plus you don’t have a landlord telling you what you can’t do.

Sure, but only 2 (i.e. estimating rental yield as zero) is a lower bound on profitability. Housing has been profitable in that sense in many places over the last decade.

Not sure this generational divide argument holds water much. The children of boomers, who grew up in relatively nice houses with backyards, similarly want nice houses. Increasing supply in an urban planning context involves increasing high density dwellings in the inner city. This is a hard pill to swallow for adults who remember playing cricket in the backyard with their Dad or whatever idyllic notion they are left with from their wonderful childhoods (not a joke, Australian kids have great childhoods by any metric). The boomer parents also want the same thing for their adult children, and help fund the acquisition. As boomers die off and the wealth passes to their kids, they will invariably spend it on houses (or second houses) as well.

I also think different cities in Austrlia have differnet issues. Adelaide has a very old demographic and little migration, and has the problem that their health care costs are going to greatly exceed their revenue. Melbourne has had too much migration, which tends to just make the economy look fine but causes a lot of strain on infrastructure. Melbourne and Sydney also suffer from being gravity wells for migration, so that people don't leave for better paying work elsewhere or cheaper housing. They choose to suffer underemployment in very competitive and saturated labour markets with unaffordable housing. I include myself here.

Housing affordability is not going to improve. There is no way prices are going to correct by the 30% - 40% in desirable places to live to get into the realm of affordability. Increasing urban density is neither attractive to people nor likely to happen. It's done and dusted. The only thing to hope for is that the rate of change will slow down, and wages will improve so that at some point in 30 years time affordability will be better. That means there will be a generation of people who don't own their homes, and the comparison to the previous generation will be highly unfavourable. Being an elderly renter is a greatly inferior experience, and the government outlay for housing the elderly will simply increase more and more.

The 'solution' to my mind is to strongly encourage people to move to places with more affordable housing and good living conditions.

> Melbourne and Sydney also suffer from being gravity wells for migration, so that people don't leave for better paying work elsewhere or cheaper housing.

This is exactly it, I'd love to leave Sydney to live somewhere else but until remote working is ingrained in our culture, it's just too risky for my partner and I to move away to a smaller city/town incase our current employment changes.

I've been amazed to hear of so many people who, as soon as they started working from home because of the pandemic, bought a house 2.5 hours away from their office. You're one bosses decision away from having a very miserable daily life.

There is definitely a serious intergenerational fairness issue here. One of the best expositions of the problem I've seen is this talk by Tory peer (and boomer!) Lord David Willetts.

https://www.youtube.com/watch?v=ZuXzvjBYW8A

It's very clear that our (Strayan) government will sacrifice anything on the altar of the housing bubble, because that's what the boomers demand, and they're still in charge for some reason. The rest of us get the shaft.

It's because half the population has their retirement based on housing values so if you crush that, you have a generation of boomers with no retirement money.

Keeping the housing price expensive seems less efficient than just paying the boomers retirement money.

All kinds of people get to profit off of the high housing prices that could otherwise be part of the retirement money

...so instead we have gen x and younger with mostly no retirement money and mostly no houses either. Great plan.

Profitable means we get more and more houses being built.

Except due to insane zoning rules and an ever greater push for exurban housing, which is insanely expensive due to the infrastructure required, we are not getting nearly enough housing.

The way to make them affordable rather than profitable would be to build many more than are currently being built. As long as the quality is decent, you then drive the prices down through a simple increase in supply.

You probably still need some tweaks to disincentivise use of property as a financial vehicle, but you're 70% there just by building more.

Unless something still manipulates the price, as in the diamond market.

You would think so. But once again, how can housing continue to be profitable i.e. grow faster than wages, and people still afford to buy houses? Doesn’t it collapse at some point? Isn’t that the joke about only economists think that exponential growth can continue forever?

Most of my peers are either completely priced out of the market, or taking on 40yr or interest only loans. It seems like the market is currently a game of chicken of who’s willing to sign away more of their life. An interest only loan is literally admitting you can’t afford this house and the only hope you ever have of paying it off is if it increases in value without you doing anything.

Profitable by owning and sitting on an asset != Profitable for a builder to buy land and build a house. You can have one without the other.

Totally agree. The government should have a policy goal of keeping house prices stable relative to inflation. But when multiple generations have locked up most of their wealth into housing, it’s unclear how to untangle the whole mess without collapsing the economy.

Also without losing votes from the people with property equity (i.e. the majority of the electorate).

> Most of my peers are either completely priced out of the market, or taking on 40yr or interest only loans.

These interest only are the reason my parents lived in a house 2x what they could afford - they took out an interest only mortgage in 2002, paid less on the mortgage than I was paying in rent for a room in an apartment last year, and sold at a 2.5x gain (to someone in my generation who is now mortgaged to the hilt), and bought a smaller home in cash from the proceeds after retirement. It's insanely unfair that the solution to irresponsible lending to my parents generation is to protect their investments and make sure I can pay back what they won't be able to repay.

Exponential growth can continue forever if you shrink the universe of things you're measuring and declare the losers out-of-scope.

Europe, by the 1500s, was running out of land and resources. So they found a whole new continent, genocided the native inhabitants, and suddenly there's plenty of land & resources to support anyone who comes over to the New World. America by about 1880 was about out of land for westward expansion, so invented steel, concrete, elevators, skyscrapers, trains, and urbanized, making land irrelevant. The industrial revolution had largely run its course by 1914, but then we had 2 world wars that devastated Europe and made America the engine of rebuilding. We got to keep our exponential growth, but a lot of folks just...died.

Single-family homes are likely to become a luxury good. Not everyone is going to have them, and prices will keep increasing as they move up the income spectrum. What happens to everyone else depends on whether you believe the world will end in fire (war) or ice (dystopia).

Malthusian conditions keep me up at night.

Most countries birth rate falls off as they become more developed. There’s estimates that the world population will stabilise around 11 billion. I don’t think there’s any theoretical reason why high quality affordable high density housing is impossible.

It won't be SFHs though, and it remains to be seen whether Americans will accept that without conflict.

A condo/apartment future is actually pretty likely, and achievable. NYC and most of the non-US world went that way in the 50s, and a lot of Silicon Valley cities (which were previously all suburban sprawl) have been constructing those 4-over-1 condos like crazy over the last 10 years. Even notoriously anti-development SF Peninsula cities have gotten in on it.

But that's largely not where the real estate feeding frenzy is - condo prices are up, but nowhere near as much as SFHs. Turns out a large proportion of Millennials still want a detached house with a yard in a good school district, the same thing that the past several generations wanted, but that dream is increasingly unrealistic.

If homes are a profit-seeking investment then supply and demand would incentivize lower supply. If new houses cannot be built, but the demand is the same or increasing, then prices must rise. The profit motive directly leads some people to fight against new housing.

Quite frankly I don't think any of you in this thread have any idea what you're talking about

That’s true! I’m not an economist or a policy expert. I don’t claim to have any answers. I’m just pointing out that profitability and affordability are mutually exclusive goals for housing prices. I leave it to people much smarter than myself to figure out if anything can or should be done.

Nimbys don’t allow it.

Profitable to build != profitable to hold.

housing is most profitable when there is the least new construction.

I assume you are saying this to claim that if housing is "merely" affordable, no one will be incentivized to build houses.

That's not really how it works. Developers can make a profit when building new housing on vacant land, or on improving existing housing. That does not preclude the resulting housing from being affordable, though.

This is an unfortunate overloading of terms, but "profitable" in this sense doesn't mean just the usual "get more money out than you put in". It refers to the practice of land/housing speculation, and buying housing with the intent to hold and then sell at a profit without doing anything meaningful with it.

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