Just because this doesn’t magically solve the housing crisis, doesn’t mean it’s not a good start. We have to stop looking at magical solutions that will solve all our problems in one shot. We have to start somewhere.
It does. Twenty thousand units represent about 5% of Denver's housing stock [1]. Commit to adding this many units to the housing stock every year for the next 10 years and you'll have solved the housing crisis. (You'll probably need to bail out recent homebuyers, who will be permanently underwater, but that's a separate issue.)
[1] http://censusreporter.org/profiles/16000US0820000-denver-co/
That is only if you believe that more capacity does not induce more demand, which really isn't true as long as the city remains popular for jobs/climate/nature/etc.... People not moving to Denver because the rent is too high will decide to move to Denver if rents decrease (and the demand they add will cause rents to increase, wash/rinse/repeat until an equilibrium is reached). You also have cases where a city becomes even more attractive because of growing density alone (NYC, Hong Kong, Tokyo).
The inverse of this situation is that everyone lives somewhere they consider unpleasant because the rent is affordable there.
The megacities you mention are enormously economically productive per capita. All sorts of efficiencies pop up when a huge number of people live near one another.
It isn't a bad thing. NYC and Hong Kong are nice cities, they should exist. But don't expect housing prices to fall because you add more density if demand isn't fixed, the opposite often happens instead (people want to live in megacities even though housing costs are high). And that isn't really a bad thing, like gentrifying a blighted neighborhood will drive up housing prices as well.
I don't believe this is true, assuming scarcity = shortage. Ad absurdum, if Denver overbuilt such that one could pick up a parcel for a song, you'd see opportunistic demand where there previously was none.
Here's a listing for a parcel for $9000, that's been listed for over a year[1]. Denver seems like a nicer place than Detroit, IMHO, but it's possible for there to be more supply than demand.
I suspect at 5% annual growth in units, you would be able to reach the point where there's not enough demand for builders to recover costs. It might take a few years, depending on just how much unmet demand there is.
[1] https://www.redfin.com/MI/Detroit/1752-W-Canfield-St-48208/h...
I don't think that's how the theory is supposed to work. It's more along the lines of, if you build more housing in a place then more people live there and then the higher population density can sustain more shops and jobs, and then people want to live near shops and jobs so the local demand increases.
There are two reasons the theory doesn't actually mean that you can't solve the problem with more housing.
The first is, the effect isn't infinite. As the reductio, if the entire New York Metro area had the population density of Manhattan, it would house 450M people, which is more than the entire US population. So you can build more housing than you have people to move into it even if that would literally cause the entire national population to move to the same place, and of course building that much housing in one place wouldn't cause literally everyone to move there anyway, so the amount you need in practice is far less than that.
And the second is, it's a local effect that comes from net migration. If you build more housing in Denver and that causes people to want to move from Austin to Denver, even if you don't build enough to overcome that in Denver itself, you'd still be lowering housing costs in Austin. And if you're simultaneously building new housing everywhere then there is no net migration and therefore no induced demand anywhere.
https://www.reddit.com/r/AskEconomics/comments/y3ywl2/why_wo...
Affordability and desirability are always going to be in constant tension, and any given change - including construction - can tip things more one way than the other. The long-term affordability trends are poor even in states like Texas - is that purely because of construction? No, it also has to do with policies like trying to poach established businesses from other states and importing wealth and high salaried individuals. But it shows that development is no panacea and that even in areas with more open land to build more new construction on there are still powerful trends in the US towards sprawl, low-to-medium density, and rising cost of living. Without explicit intervention like subsidies or direct government construction development will slow - focusing on higher-ROI units for the same spend vs pure unit count - as developers worry more about not being able to command the per-unit price they want if they were to aim for quantity.
No, it doesn't. What you're describing is elasticity. It's a well-studed concept, and means that a 5% increase in supply will probably reduce prices by less than 4.8%.
(An interesting side effect of a government committing to a zero real-price increase housing strategy is it eliminates whole categories of speculative demand. I wouldn't count on this for policy effects. But it's another feather in the cap for pro-housing policy.)
"Everyone would move to ________ because it is the best place in the spiral arm of the Milky Way", where ________ is Boulder, Bend, Austin, Portland, San Francisco, Santa Barbara, Hawai'i, Santa Fe, etc.... etc....
It cannot be true for all of them. So they all need to build and people will figure out where they actually want to live.
Bozeman, Montana, a small city of 50K people, is seeing falling rents because they built a lot of housing:
https://montanafreepress.org/2025/06/23/has-bozemans-rental-...
And it's very much the kind of small place where "everyone wants to live there".
If you have fixed demand, then you can definitely "build" your way out of a housing crisis. Bozeman, for example, doesn't have many jobs, so you can't really live there if you don't bring your own money. A big city like Seattle or Denver... they have lots of jobs, so they will grow at least to the point that all those jobs have people working them...but then a city like that attracts even more jobs (the way cities work since they concentrate talent, which attracts more businesses looking for that talent), more people, it could grow from a million people to 10 or 20 million easily.
> And it's very much the kind of small place where "everyone wants to live there".
MT is a bad place if you need to work for a living: high housing prices, jobs don't pay very well if you can find them at all. My mom moved to Helena in the late 90s and found that out first hand. If WFH took off as expected, then you definitely could make a good life in Bozeman or Missoula or Butte, but alas, the opposite happened and we regressed greatly.
I moved from midtown Manhattan to western Wyoming. People have diverse preferences. (Even if we assume uniform preferences, densifying the population into a few cities so we can reclaim our wildlands sounds like a dream.)
If I could afford to live in Jackson, I would love to someday. But alas, Jackson real estate makes Seattle look cheap.
Just as there are plenty of people from outdoor towns who would enjoy hanging out in NYC for a week but then miss mountain biking or something.
I couldn't stand the rain in Seattle. You'd have to pay me to live there. Some people apparently like it or at least don't mind it much, though!
Same thing happened in Austin, Texas, which is a much bigger city with lots of jobs.
The underlying story is that building enough housing is a good way to fix a shortage of housing, which is what causes high prices.
Best is different for different people. Some people it means close to beaches, for other it means cultural institutions, for others it means lots of tech companies, for others it means wide open spaces.
Land is eventually limited, but there is tons of variety available of what people like.
Globally, demand isn't even fixed. It's proportional to the population size, which we would expect to shrink.
The only way this could work in the opposite direction is that you build enough that it becomes feasible for everyone to live in a few supercities where demand keeps growing due to network effects, and the supply outside of the supercities is useless.
Do we really want that? Of course, housing has to be maintained and has a lifespan (the Japanese are good at rebuilding housing stock after 20-30 years), and so it can simply die off in the places that are no longer popular, but it seems like a waste of infrastructure investments that then have to be re-done in the new hot places.
I would imagine for most people, this is what "solving the housing crisis" means
Now the folks in Denver who hadn't considered Austin due to high rates can move there and reduce the costs in Denver again.
Cheaper homes may induce demand, they won't induce a 5% growth rate.
Only if population is held constant.
Housing supply is inelastic, but housing demand is somewhat elastic. As seen in Denver, an increase in housing supply would decrease prices. But those lower prices will increase demand from people that want to live in Denver but previously couldn’t afford it.
Denver hasn't been that place for more than a few decades. Heck, the whole rocky mountain region has never ever been a place for cheap housing. Western housing prices are high historically for reasons related to desirability. They never were as cheap as the midwest or deep south.
Except, it's not. Where would all of these extra people come from?
More to the point, Denver is already quite expensive. Where are you going to find another 230k people capable of paying even higher rents than folks do today?
We don't have an infinite number of people available to move into housing. There are only a certain number of people who will want to move into a particular region, and that number will stop growing at some point.
Granted, you don't want to build too much and end up with a ghost town. There's a balance to be maintained, and I think housing should be affordable, not a race-to-the-bottom cheap as possible.
If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators.
It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house we're supposed to give massive government support to correct the buyer's mistake?
When the speculators vote, yes, you need to bail out the speculators.
> It's called buyer's remorse
It's called building consensus. At the end of the day, if it costs making homeowners whole to gain their buy in to solve the housing crisis, that's money well spent.
I'm not saying what I'm proposing is fair or even palatable. But it's functional. If solving the housing crisis is more important than aesthetics, it's a good move.
In non-recourse states, you'd expect to see defaults as people leave the keys in the mail to reduce their housing costs by moving next door at the reduced price or rent. More broadly, people don't like seeing their wealth go down.
> Is a tax dollar better spent placating grumpy homeowners
If it gets you the reform, yes. The point is you don't get housing reform with grumpy homeowners barring a massive shift in voting patterns.
Also, let's keep scope in mind. You only need to bail anyout out if you reduce home prices. If you hold them constant in nominal terms, that shouldn't generate pushback. (If you hold them constant in real terms, people can continue feeling wealthier.)
At the trade-off of never being able to get a mortgage again, unless that's the bailout these homeowners get. Almost everyone will either sit tight or rent/sell at a loss. That being said, you will lose out on the public and private support of everyone who bought a house since roughly 2020. It doesn't matter if you've got a 3% rate if you're not getting your down payment out of the house.
The plan that makes the most sense to me is to keep housing prices constant/barely increasing while letting 3% inflation and gradual lowering of interest rates do its thing. Eventually the houses won't seem that expensive and those who locked in at high rates and high prices have an offramp through refinancing.
That's not the effect of abandoning a mortgage (or using the leverage provided by that option to secure lender approval for a short sale) in a non-recourse state.
(Source: been there, done that, have a new mortgage since.)
The potential credit hit wasn’t even a consideration.
I think this is a really good insight. The reason for long-lived NIMBY policies is because NIMBYs[0] vote and lobby more than everyone else does. I have, do, and will continue to vote for pro-housing policies, but there are a lot of people -- probably still in the majority -- who will not vote for anything or anyone that will reduce the value of their homes.
What matters is outcomes. If paying off the NIMBYs gets you a good future housing policy, then we should do it.
[0] I know "NIMBY" is generally a pejorative, and I agree with that for the most part, but I will admit that many NIMBYs are operating and voting quite logically, for their own interest, even if it hurts others, and hurts society collectively.
The first order consequence of treating housing as an investment vehicle is high prices, sure, but the second order consequence is that you dramatically increase the stakes when individual people buy any house whatsoever.
I would much rather give checks to every homeowner whose home value falls than to force even a single laid-off autoworker or whatever into bankruptcy (good luck buying a home after that) if they elect to move somewhere else for a new job and can't sell their house for enough to pay off their mortgage. If the consequence of a government policy to build more housing is that more people become homeless, then its failing.
There really isn’t an easy and elegant way out where you neither pay off the haves nor pitch the have nots majority against the haves.
There are almost twice as many owner-occupied homes ("haves") as not ("have nots").
You only win here if you placate the homeowners, and a surefire way to do that is by making them whole when you whack 20% off their home's resale value. Maybe there are better ways, but I'm having trouble thinking of them.
https://en.wikipedia.org/wiki/Greenspan_put
More pointedly, you're not in a position to block equity capital markets reforms in the way homeowners are in respect of housing reform.
Especially among people criticizing the response to 2008/2020.
Failing to mitigate sickness in capital markets and the economy in the short term would have inflicted far more damage in the long term.
Also, making the public hold the bag in a bubble is perhaps the most sinister form of theft imaginable.
so you know: most localities do treat the house you live in very differently from a tax perspective than they do any additional properties you might have, because everyone is born short housing, until they own 1 place to live.
so yes, the proposed bailouts up thread would be for people who bought a house because they didn't want to be short housing; a hedge, not an investment.
also if the house has hedges then your hedges are a hedge. I'll see myself out
And let's not even get to your point about hedges. I don't know many people that can define it let alone consider housing as a hedge.
This is not a good policy goal, but the fact is that the wealth of the American middle class is mostly stored in property, and tanking property values would be a disaster for a broad swath of society which otherwise only has long-term retirement accounts to rely on.
They will vote to protect their interests, no matter how badly it screws their kids or contributes to homelessness.
These are two distinct things that are coupled through life choices. It's a real pity that tax regulations are different just because you make individual life choices.
I'm not saying we shouldn't make housing affordable, but it's worth considering the impact for everyone.
It isn't always, but sometimes it is. Through regulations, through monetary policy, through other policies.
Now if the government decides that you, you personally, standardUser, are going to lose $100k, I don't think the government should bail you out. It's called "moral hazard". You lost $100k. Deal with it.
If the government decides that I, me personally, am going to lost $100k, I would say that I am old and I vote in every single election, and despite my failing memory, I will remember that lost $100k until the day I die and no politician who voted for that will ever get my vote again. I will remember who did that to me.
I think it always is, frankly. The price of pretty much every single house in the US[0] is a function of decades of government housing policy. And I don't think it's particularly fair to say, "oopsie, our housing policy since before you were born was kinda bad, we're going to fix it right now, but it's going to put you underwater on your mortgage... sorry, but you'll have to just deal with it".
[0] Sure, maybe this isn't the case for an off-the-grid cabin out in the woods, far from any town, but that describes a teeny tiny portion of the housing stock.
You hope conditions won't change. You can look at the current market trends to try to value it. But things will change in the next few years probably. You can guess, but you'll never "know with pretty good accuracy". The economy can go down, interest rates can change, major employers can come and go, there can be an earthquake or cancerous ground discovered there.
A mortgage is a loan that gives you money you don't have (yet). If you are spending money you don't have, do it wisely or suffer the consequences.
I think no special treatment. Everyone else in the same space has the same rules/uncertainty as every argument you offered.
There are a variety of circumstances that can be dreamt up for either side of the equation. And I have no compassion for lenders either.
As you say, maybe the mortgage/loan should be seen as a partnership of some degree between the parties so that the lender is less likely to take advantage.
But ultimately "he who should have known" is the person asking for money to buy XYZ thing. A person should be responsible for their actions.
I agree with this in principle, but the real world is messy, and many (most? all?) people end up having to make decisions in their lives where they maybe should know, but don't know everything they should. Perfect information is rarely a thing, and even if you have it, you need a certain level of education to exploit it that we can't expect anywhere near everyone to have.
I don't give even the smallest shit for lenders. I care about people. I care about people having housing security, food security, and a little extra so they don't have to live paycheck to paycheck. No, I don't think we should just be printing money and firing it off in a t-shirt cannon at people for the hell of it. But I think we need to be compassionate, and understand that a huge, unexpected change in housing policy that tanked their home value is not something they "should have known" might happen.
I feel like many of us here forget (or were, oof, too young for) the 2007/08 financial crisis. We bailed out a lot of banks, and left a lot of regular folks holding the bag. I don't want to see that happen ever again. And yes, I get that housing policy changes that create lots of new housing is different. But the outcome could be very similar.
Fixing the housing crisis will be a generational task.
For the person who ownes multiple houses and buys simply to rent and flip a profit well I have very little sympathy for them. They are the true speculators.
I feel a little sorry for them but they are not missing the money total of "the whole house". They can sell the house, have a shitty $100k debt, a tale of woe, and hopefully a better idea of how to go about spending money they didn't have.
I feel there are too many people who "borrow as much as they can for the best house they can get" rather than being sensible about their money and using a mortgage as a hedge against paying rent and future rent raises. Some of them make it, some of them don't.
this sounds more like a suicide pact than a plan.
But there's two things here:
1. allowing people freedom to make their own choices.
2. the dangers of borrowing large sums of money
Adding those two together in a free(for some notion of free) market means there will be losers. In this case, the outcome sucks but it isn't like they lost their life in a car crash.
If you start guaranteeing outcomes... that way madness lies.
I don’t understand this point. If you’re paying the mortgage, the bank dgaf. Is there some sort of margin call a bank can claim on a house that is worth less than it was when it was purchased?
Don’t you just pay the mortgage you agreed to pay the bank?
That's not how mortgages work (in the US, anyway). If the value drops, nothing happens, you still have the same house and same mortgage.
I've been underwater twice, in the same house, as prices go up and down over the years. As long as you still like the house and want to continue living there (I did), being underwater doesn't mean anything.
When you have to put an "If" in front of "being underwater doesn't mean anything", then that means sometimes it really does mean something.
(¹I don't want to get too much into the sidetrack that is "but if you're underwater you could lose your home" — yes… that's possible. The example here is a 20% fall in prices — which would be astounding to those of us wanting a home, the thing of dreams — but you put 20% in the down payment, so a single mortgage payment & you're no longer underwater. In reality, the price drop (in rent, but let's work with what we got) was 3.7%. (Don't get me wrong, I'd take that too, as a renter.))
Oof, I was about to question if this is correct or not, but it turns out that this is indeed true in most US states: if you default on your mortgage, and the bank can't resell your house for at least as much principal as you have left to pay, you still owe the difference, and they can get a court to garnish your wages, put a lien on any future home you may buy, get your accounts frozen.
Didn't realize this was a thing... I live in a non-recourse state (California) where the bank only gets the property on default and can't pursue you further.
Even regardless of that, I don't love the idea that a change in housing policy could make people feel trapped in their current home, unable to move. Granted, current housing policy (e.g. California Prop 13) has that effect on some people already. And I bet it sucks. Now, I'm not sure the government should be bailing out people who can continue to pay their (now underwater) mortgage but would just like the option to sell it and move. But I think this requires a bit more thought than just wielding that axe and letting things fall where the are. I mean, hopefully we're not advocating for more of the DOGE method.
The needs of the many (would-be homebuyers locked out of the market, renters suffering higher rents) outweigh the needs of the few (homebuyers who did buy recently, and would be underwater, and would have an event to trigger that mattering at all, and whose finances are not orderly enough to survive that).
The median isn't even 20%, it is a bit less than that. Median first-time home buyers put only 9% down. Even the median repeat buyer, who just sold a house and had probably been paying mortgage payments for a while, only put 23% down.
https://www.nerdwallet.com/article/mortgages/average-down-pa...
But you are right though, a 3.7% drop probably wouldn't put even most first-time home buyers underwater.
I think it's pretty normal for rational purchasers to consider the resale value of something that they purchase, and hand-waving that away doesn't make for a very serious argument.
Making any guarantees as to the future worth of these items is craziness.
That's dumb. But that's the reality we live in.
This is the market. So I maintain that guaranteeing outcomes is craziness.
Should something as vital as housing be a market commodity? That's a whole different conversation.
Viewing a home as some kind of investment vehicle is everything wrong with the housing market today. It’s so wrong it makes my head spin.
Also, if continuing the building ends up requiring some policy change (supported by changing laws and regulations)… it seems reasonable to protect normal people, doing normal things, from massive financial chaos that is explicitly caused by the government changing policies on them. At least for people actually using the houses as intended, that is, living in them.
Why? If it makes society as a whole much poorer.
The convention is fairly recent and the cause of enormous problems.
Are there pitchforks in Denver or Austin? Are angry homeowners overthrowing governments and blocking homebuilding?
People seem to complain that housing costs too much. The straightforward bet is that lower prices would be popular.
For example, re Texas, 9 out of 10 say housing prices are too high: https://www.texastribune.org/2024/08/08/texas-housing-afford...
No, they're already in the government, have been for decades, and they're the ones responsible for anti-development policy.
> For example, re Texas, 9 out of 10 say housing prices are too high
Cute punchy polls like that make for nice sound bits, but don't tell the whole story. I'm sure if you followed that up with, "If the government were to enact new housing development property that would reduce the value of your home by 20% over the next 10 years, would you support it?", I guarantee you that 9 out of 10 (homeowners) would absolutely not.
Yes. Go to city council meetings when new housing developments are being proposed. See the throngs of people that'll show up demanding that new development doesn't get built. See the angry people shouting about how allowing ADUs will just destroy their way of life.
The amount of vitrol I saw about the Plano Tomorrow plan against past mayor LaRosiliere was astounding, people fighting tooth and nail to prevent denser housing from being approved. So many people saying things like the "wrong kind of people" would be moving in and allowing more density would make the city unsafe.
https://www.wfaa.com/article/news/local/plano-repeals-compre...
Recent zoning changes in Texas came from the state legislature and remove cities ability to block a fair number of housing types.
Did Plano itself actually enact any new pro zoning law that has drawn new protests? The article you shared it about developing undeveloped land but zoning is largely about what is blocked on existing inhabited land.
> Are angry homeowners...blocking homebuilding?
And then now:
> Local council meetings are notorious for attracting people willing to oppose any development.
So yes, even you agree there are angry homeowners doing what they can blocking homebuilding.
Yes, it's been happening at the local level, because that's where those decisions are almost always made.
> Recent zoning changes in Texas came from the state legislature
As in, this last legislative session. It took to that point because of angry homeowners blocking development. And how did they do it? By pushing out any local government that tried to enact development plans that tried to densify over and over again throughout tons of towns. The legislation didn't come from a vacuum, it came in response to these NIMBYs that have otherwise yielded significant political power at the local level.
> zoning is largely about what is blocked on existing inhabited land.
Practically all that land is currently zoned. It's not developed, but it is zoned. Almost always zoned agriculturally, as it was once pretty much all farm lands. Lots of those areas are still farms, but largely for tax reasons.
And I agree with you, it's a bad convention, and it causes tons of problems, and it's the result of recent decades of bad mortgage/housing/zoning policy. But we can't just wipe it away and pretend it was never there, and let the chips fall where they may. That's just heartless, and, well -- you talk about making society poorer -- that will make society much, much poorer, nearly overnight.
We wouldn't get richer if we blew up car factories to protect the market value of existing cars. The market value of existing cars WOULD skyrocket if we destroyed all new car production, but that would be society getting poorer, not richer, as we would have fewer cars.
And that is a big part of the problem. You cannot have it both ways, if housing is an investment, it will eventually lead to poorer outcomes for anybody that needs a house and does not inherit one.
It's not that we shouldn't desire cheaper homes, but we should realize that people who paid $400k are largely not speculators. They bought what the market was willing to offer.
The problem in this eventuality is mobility: if you buy a house for $400k, live there for, say, 5 years and the resale value of your house is at $300k, that's going to be a big problem if you have (or just want) to move. If you sell at $300k, you'll have about $50k left over (after repaying the bank) for a down payment on your new house, which means you can only afford a $250k house, which may well not meet your needs.
If someone is planning to live in that house long enough such that when they do want to sell it, they can move to a new place that meets their needs, at a price they can still afford, sure, great. We shouldn't be bailing those people out.
> You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators.
That's absurd. Aside from people who buy too much house ('00s, anyone?) and regret it later, people pay the price they have to pay for the amount of space and location they believe they need. Most people -- very understandably -- don't know the dynamics of the housing market to the point that they'd be able to predict that their resale value might go down by 25% at some point in the future, because, historically, that's just not what home prices do. (And don't parrot the "past performance is no guarantee of the future" crap... yes, true, so what. Most people unfortunately can't plan their lives around that.)
These people aren't speculators... speculators are buying to flip, or to hold and resell, as investment properties. These are just regular folks who need a place to live and have -- regardless of prudence or correctness -- bought into the idea that owning their home is the next life stage, a proof of success and well-being. Calling people like that speculators shows a severe lack of understanding and empathy.
> It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house...
A car or a TV costs nowhere near as much as a house. Losing a car or a TV is not going to make someone homeless. Housing is a basic need, and housing security is essential in a healthy society. (Granted, in many places in the US, losing your car can lead to financial ruin as well, sadly, considering how crucial a car can be to many people for basic things like getting to work.)
Your house losing 100k$ in value isn't going to make you homeless either (quite the opposite actually). If you buy a house and it depreciates, so what?
Not to mention if everyone's house depreciates, your new house is cheaper to buy. You lose _nothing_, except imaginary dollar values.
> Calling people like that speculators shows a severe lack of understanding and empathy.
I don't know what you call preventing young people from buying, or even renting, at affordable prices so 'people like that' don't have a possibility of losing some money, but you sure as fuck don't call it empathy either.
A car or a TV are much smaller investments relative to a house. Over a decade of savings is tied up in my home. If the ass drops out of the market, myself, and others like me, who have broken into the market without assistance at the peak of housing prices will be virtually permanently financially set back. And to call buying a house around this time a mistake is crazy. I would be as much a speculator if I continued to rent and pay someone else's mortgage, hoping that prices dropped so I could get a good deal. It's a home and this attitude of treating homes as investments or mere purchases is why we're in this mess in the first place.
It's the government's fault that this bigger-fool game even exists, because the buck always stops there. They might want to consider compensating people for the misery they caused.
Isn't that missing the forest for the trees? There's an all-out class war between the haves and the have-nots. If it controls supply like a cartel, and if it pursues rent-seeking like a cartel, then maybe the real estate moguls and speculators that treat everything like an investment instrument should be held accountable and liable.
Being underwater does not cause a liquidity issue.
The difference is order of magnitude as proportion of net worth and the necessity of the purchase.
A $400k home is probably a starter home. Owners are probably a young couple (millennials). They probably want to have kids.
Forgiving 100k of their debt means they (and their kids) will have a fair chance at success. Earning more money. Saving more. Paying more taxes (over their life times).
I don't think anybody is going to be permanently underwater. Home prices changing should be a second order effect of building more apartments.
Land, driveway, number and quality of fixtures, electrical hookups, cabinets, countertops, doors, clearing land, water, sewage, etc can be nearly identical costs for a 1,000 sf or a 3,000sf home. Many things like wall insulation and heating demand increase sub linearly with square footage.
Which is why home builders so heavily favor large homes by historic standards. This is slightly less true of high rises, but making the building wider doesn’t require more elevators, internal hallways, etc.
Building smaller (specifically reducing square footage, baths, and kitchen amenities [which are a mix of size and non-size elements], and using less land [going up, sharing walls/roofs, eliminating private outdoor space, etc.]) is the mechanism by which the goal of less expensive can be met.
Amenities on the other hand can literally 2X+ the cost of a home.
Obviously the case near me where the mortgage payment on a house would be $2600/mo but the rent for the identical one next door is $2000 is going to swing heavily toward renting, but there’s more to it than just that.
Maintenance is huge and real and people just seem to ignore it on the “own” side, but 5-10% of the value of the house a year in maintenance isn’t unheard of.
I assure you I am not paying ~$30k in maintenance on my ~$400k house every year... that would be comical
Maintenance items add up, and some only happen every 20-30 years, it can hit hard. A new roof every 30 years at $10k is already noticeable.
That'd be $333/year averaged out, two orders of magnitude away from 30K/year example of OP.
If houses really consumed 5-10% of the purchase price on average per year, people wouldn't worry or talk so much about roof replacements; they'd be just other drops in the bucket.
That's actually pretty much unheard-of (unless you specifically bought a very cheap fixer-upper with the intent of remodeling).
I've owned current house for over 25 years and I have not spent 10% of its value in maintenance even if I add up everything over the 25+ years! Let alone every year!
I think those figures point towards buying being favored, especially if the mortgage payment is PITI, but even if it's principal and interest only, I think buying is likely to be better in the long-term if the spread is that small.
Maintenance is not going to run 5% of the purchase price on average, except in the most extreme low-cost housing situations. A house that sold for ~$500K (as would be implied by a $2600 mortgage payment) is not going to cost $500K in maintenance over the next 20 years (as 5% would imply) and certainly not over the next 10 (as 10% would).
You may have an individual year that's over 10%, but that's a cashflow issue not an overall cost issue.
The advantage of renting is the flexibility, lack of commitment to a specific house or area, and the lack of need for a large upfront sum (in this example, renting might need $6K upfront [$2K of which is the first month's rent], while buying might need traditionally $100K to avoid PMI or ~$20K on an FHA first-time buyer mortgage and associated transaction costs).
1. House prices have risen consistently for the past ~50 years. This is an anomaly (various theories why, my favourite is because women entered the workforce so the income per household increased and we spend as much as we can afford on housing). If/when house prices stop rising consistently then buying doesn't look much better than renting from a financial perspective.
2. Existing laws tend to favour the landlord over the tenant. In countries where this is not true (e.g. most of Europe) and the tenant is favoured, then renting is not so precarious and has lots of advantages.
I lived in rented accomodation in Berlin and it's a completely different experience from renting in the Anglosphere (UK or Australia for me, I don't know about the USA).
"Committing to doing this every year" is VERY different than doing it in one particular year. Yes, that would solve it. But of course, 2022 was part of a very unusual cycle including a lot of migration and you should note the last line in the article:
> Meanwhile, the pipeline of new apartment buildings is drying up. The number of properties under construction is down by roughly one-third from the peak in 2023, the report found. That likely means fewer units coming available in the months ahead, potentially giving landlords room to start raising rents again.
New housing is only a temporary salve and perpetuates a vicious cycle. The people who move into these new units will have more babies, because they have new habitat. These babies will grow up and eventually drive up housing prices. Even before then, people will move or emigrate into cheap housing and fill it up. Housing then becomes expensive again, only with more people filling up the earth: polluting the air, straining water supplies, clogging roads, uglifying neighborhoods with massive buildings, overrunning parks and trails.
Thankfully, expensive housing, in part, has reduced American baby making to 1.6 per woman, a sustainable rate. Unfortunately, because humans are living longer, the US population still continues to rise. The U.S. Census Bureau currently projects that the resident U.S. population will peak at nearly 370 million around the year 2080, before it gradually declines to about 366 million by 2100. If immortality is invented before 2080, the population may never go down, ever.
Meanwhile, the latest estimates put the current U.S. population (as of mid‑2025) at approximately 342 million. The population has increased roughly 4.5x since 1900. From building new housing.
Detroit?
That would be an incredible commitment, and not something which has happened. This burst of new rental property is already subsiding, with an expectation that rents will again raise next year. Moreso, it would be hard to get private organizations to commit to building such a massive glut of property knowing that they are tanking the market that would pay back their investment.
That is why this doesn't magically solve the housing crisis.