There are many stories of solidly low-to-middle class families who lived in an area where property prices soared, and had to choose between bankruptcy or moving out, because they could no longer.
The only people who benefit from this are the investors and landlords. So allowing housing prices to surge is literally taxing the poor for the benefit of the rich.
Buildings also deteroriate - ask a civil engineer. Building something that lasts 50-100 years is much cheaper than something that can be maintained economically indefinitely. If you own a house with copper or PVC plumbing, that they go bad after 40-50 years, and fixing burst pipes quickly gets expensive.
Why do countries allow housing prices to rise then? Simple, it allows banks to have a massive portfolio of loans, where they get a steady source of income for literally decades, while also getting a massive portfolio of real estate they can use as basis for leverage to grant loans (which they profit off of).
Governments can then tax the banks and get some of that money without the dreaded specter of increasing income taxes.
The only problem is that the everyman gets stuck with a 10,25, and now 50 year old loan (with a similar increase in price) for the very same median house.
How do we limit home prices increasing? I see your point but solving this isn't trivial.
Of course they can when they own them all. See De Beers diamonds. Buy them all, keep the price artificially high.
Corporations control only a small faction of housing supply.
The solution is to build more housing and get the government out of the picture.
Build more housing.
If we want housing to be affordable ie “limit them increasing” we have to stop people using them as investments.
There are many ways. My favourites are:
- one human can own one residential property. No companies or businesses can.
-or, property tax doubles (or 10x) with every residential property owned.
- no foreign ownership (Canada does this now)
- government can own and rent residential property at no profit. They supply plenty of other basic necessities of life, why not houses?
So, in other words, you want everyone who cannot afford to outright buy a house to be homeless?
All of the items above can have drastic unintended consequences; the way to keep prices affordable is to make sure that supply is always outstripping demand by a bit.
Some examples of unintended consequences:
* I can't add an ADU to my existing property which would add one more dwelling unit
* Subdivision of property is discouraged; combining parcels reduces tax even if no new dwelling units are created
* This might be the closest to doing something though it could substantially discourage non-citizen immigrants (legal or not)
* This has been tried before and had well-documented issues, but might be doable if they can provide a "floor"
Make an exception for owner-occupiers?
Not the mention that ironically, the private owners with the space to build an ADU on their lot are the ones most likely to already be wealthy, and not actually rent it out to anyone below their socioeconomic bracket.
By definition if something is affordable, it’s not a good place to store money with the goal of it increasing.
> All of the items above can have drastic unintended consequences.
Yes, absolutely. These are not fully fledged solutions, but a starting point. Some of them may need an asterisk or two. Of course, unintended consequences are perfectly fine if the final result is better than what we have today
> I can't add an ADU to my existing property which would add one more dwelling unit
Your wife or kid could own it. If you don’t have either of those, you don’t need two homes.
> Subdivision of property is discouraged
Subdivision and sell is perfectly encouraged.
> This might be the closest to doing something though it could substantially discourage non-citizen immigrants (legal or not)
I am a non citizen immigrant in Canada. I just had to bide my time until I became a PR then could buy a house. Perfect.
> This has been tried before and had well-documented issues, but might be doable if they can provide a "floor"
Again, it doesn’t have to be perfect, just better than what we have now.
In the US the majority of voters just voted for a racist, homophobic pedophile convicted felon.That doesn’t mean everyone should shrug and say “it’s the will of the people”
I refuse to believe you would have this attitude if you and your family had to rent drinking water while people profited wildly from it.
The situation is unacceptable and needs to change, irrelevant of what certain people want.
> The majority of voters would vote to make income tax zero
Im not sure this is true. Most people recognize the taxes are needed for the government to provide services.
> That doesn’t mean everyone should shrug and say “it’s the will of the people”
This is the reality though, it doesnt matter that you or I disagree. Trump is the legitimate president even if he's a racist, homophobic pedophile convicted felon.
They have strong renters rights, protections against rent increases, and high standards to which dwellings must conform to.
So while you can be a landlord in Vienna, you have to compete with affordable housing options, and you're forced to maintain a high quality yourself.
So that means that unless you can offer something the market's willing to pay extra for, being a landlord is not particularly lucrative thing.
Notice nowhere in my post did I mention the typical 'landlords are evil and must be taxed to death' approach.
Which is in stark contrast to most places where you're paying through the nose, the standard of rented dwellings is low and your rent can be increased or you can be kicked out on moments notice.
Because if you forcibly keep housing prices low, you have a shortage.
Incentives are typically the strongest force to watch, but so are various cultural/political narratives people come up with. People clearly don't all vote in our own economic interests in many situations. I'd assume this is largely because in the current information ecosystem, people don't understand what's in their economic interests.
I can tell you firsthand that that is absolutely not true. The massive rush to renovate or build new short-term rentals in the 2010s had a disastrous impact on rental prices around my city, especially coupled with historically low interest rates that made these enterprises far less risky. It’s also incredibly disruptive to neighborhoods/communities, not just because of bad guests but because it can rapidly drive up value, leading landlords to sell and/or rapidly drive up rent which means kick out lower income tenants whether it’s intentional or not. Most of the STR’s in particular were also not being done by locals. 70%+ were out of town developers. Currently almost 90% of STR’s here are whole home which means not local owner/operators living there. It’s just hotels by a different name taking up housing in residential neighborhoods.
When interest rates and home insurance went up a few years ago, coupled with stricter rules for getting an STR license, a lot of people sold their properties (usually rentals/STR’s), and the price to buy as well as rent noticeably came down pretty rapidly. It’s still too high, but the drop was noticeable and quick. The purpose for construction absolutely factors in to these discussions.
When my wife and I were buying our first house we had two houses taken out from under us because somebody came in with an all cash bid tens of thousands higher than ours. Both are still Airbnb’s.
This happens because hotel accommodation is generally overpriced. But if you tax the airbnb rentals, it deters profit-minded developers from engaging in this practice, while still allowing it as a last resort for homes that cannot be rented long-term and would otherwise sit empty.
House-Hotels managed by companies based in other states (sometimes even other countries!) don’t belong in residential neighborhoods. We have zoning for a reason.
If you mean that levying targeted taxes/fees to mitigate the bad side-effects of STR's has not been tried, I agree of course. I'm not denying that the detrimental side-effects exist.
Some people complain it is "luxury" or even just normal and not "affordable."
If it is single family housing then people complain about the lack of density. If is apartments or condos they complain that there is already so much traffic in that area and adding thousands of new people will make it even worse.
When small old houses are bought up, torn down, and a new apartment / condo complex goes in they complain about the lack of character and soulless new development that all looks the same.
I have to agree with some of the other comments that many people never learned supply and demand or are completely incapable of understanding a for profit business.
I've seen comments about memory / RAM prices going up. Gamers are now so anti-AI because it is making their GPUs more expensive and now memory, flash, and hard drive storage as well. I've seen comments that say the government should step in and force companies to make GPUs at affordable prices. We can argue over whether health care or clean water are a human right but some people seem to think cheap GPUs are a human right.
1. "They didn't do an environmental review" 2. She didn't want to hear construction noise. 3. She didn't want the construction to cause rats to leave the lot and go to buildings. 4. She also said she didn't want her rent to go.
I believe it was this lot: https://web.archive.org/web/20250821002539/https://www.nytim...
I think it is common for people to organize, even in the most urban and educated areas in America, against their own interest.
It's wild that even renter's aren't voting for more housing. I think it's because basic economics isn't taught in k-12 or even college anymore and this is causing a lot of problems.
Of course, there are other solutions too, like starting new cities and incentivizing companies to move there in the beginning. People follow jobs, they have to, now more than ever. if companies move there, people will follow. How is that we used to be able to create new cities and yet now, we all the sudden can't. has our material wealth really dropped so low that we can't afford to build new cities?
and what about down-sizing? in hong kong, you could create bed sized units at a fraction of the cost of a full sized apartment. microapartments? etc? all NOT legal. i think it's wrong of the city to decide that for people. individuals should be able to decide whether they want that or not, rather than being forced onto the streets.
People who lament the lack of rentable pods and don't understand why anyone would pay more for a bigger house in a quitter neighborhood or just for a nice view exist, but you are in the minority. Thus renters are not going to vote to live in a ghetto so they could save a few hundred on rent.
Teaching economics is not the solution (see papers on financial literacy). Rationality is hard and even highly educated people have terrible models of cause and effect. Even your own dependency analysis implies that voting for X helps to get Y (which hasn't been my personal experience).
This just happened in my neighborhood. There was a proposal to build low rise apartment buildings about a mile from the detached single home neighborhood where I live, and people had lawn signs opposing the construction. Perhaps unsurprisingly, the loudest and most active anti-development voices were from Trump supporters. Economic illiteracy used to be the domain of the political Left, but the Republicans are making real inroads in rejecting free market principles, so there's some amount of political realignment. Luxury beliefs indeed.
They don't like my beds. There's something wrong with them! I can't be the problem! -Procrustes
Yes. It's the people's fault for not understanding markets. Couldn't be that markets are fundamentally structurally fucked by an inversion of the demo pyramid. Couldn't be that market participants are just delusional about how much other actors should have extracted from them.
Democracy is the worst form of government, except for all the others we've tried. This short term thinking is one of its classic failures, because in many ways you're codifying the tragedy of the commons.
Nobody really seems to care ... yet.
It's often very instructive to find out who is "behind" both promotion and resistance; because both groups will attempt to find ways to "play both sides" and get opposition moving.
Hanlon's Razor applies: "Never attribute to malice that which is adequately explained by stupidity".
IMO the right is not really the right that most of us remember, so it's not worth trying to reconcile their current ideology with the fiscal conservatives of decades past. The current GOP is unserious, their base consumed by conspiracy theories and driven by grievance.
I've never understood this: If I replace a single home with 20 apartment homes, I've raised the value of the whole property at purchase time no? You're already dealing with home valuations that have faaar outstripped wages, the only way you go any higher is to build more homes on the same property.
Counterintuitively, the "I don't want to live next to apartments" line of thinking actually seems more potent in the regular NIMBY headspace? Like people will forego higher valuations to keep their suburb a suburb.
It's a commons problem. In your scenario, you have absolutely increased the value of your property. 20 apartments is more valuable than a single family home. However, you have also reduced aggregate demand by housing 20 people. That reduced the value of your neighbors' properties (or at least reduced the rate at which their value increased).
NIMBYism posits that values will continue to increase without forcing any property owners to invest in improvements so long as they collectively block any efforts to increase supply.
Local to me, Arlington and Reston VA have both seen massive building sprees over the past 20ish years (mostly adjacent to the Metro). Home values have never been higher in either location.
My own personal example... I live ~1 mile from the Metro, so just outside the building boom zone. There was next to zero housing in that zone - it was all office parks - and now it's a mix of $1+ million townhomes, $1+ million luxury high-rise condos, and dining/retail. My own home value is up 50% since COVID and that's true for just about any house in my zip code.
And without the redevelopment/infill, I posit the whole area would be less desirable. NIMBYism feels more about "change is bad" than property values.
In general I don't think it requires all that much thought in terms of why/how price changes happen. Housing demand is inelastic, and you can find examples of that causing both rapid price increases (metro areas with high friction building requirements) and rapid price decreases (metros with population declines) when out of equilibrium in either direction, which is exactly what you'd expect of a good with inelastic demand.
But Falls Church is much nicer now that a few mid-rise apartment buildings with ground-level retail have gone in! As a resident, I am very happy about all the new development. I expect that over time, that will have a positive effect on property values, but there is an observable short- and medium-term effect working in the opposite direction as the increased housing supply eases demand on the existing housing stock.
Now we have a large homeless encampment partially on the apartment complex lot - that the complex can't deal with because their lawyers told them off.
Now we have a significant uptick in petty but quality of life impacting crime.
The roads around the apartment complex are now swamped because the entrances were placed stupidly.
And the people who live in that apartment complex are also upset about all of this.
None of this is about "my investment". It is about not letting commercial outfits hurt my quality of life to subsidize their profit margin. It's not the fault of the tenants, nor me.
Now we get to sue the stupid property management company until they fix their issues.
The thing that is prized above all else is privacy and exclusivity. People are paying money to ensure that few people live near them and that those people are the "right sort of people."
Dating back to the 1930s the original core goal of zoning was to restrict apartments so as to keep poor people and minorities out of certain areas. We know this because it's well documented in the newspapers of the day because back then people were more comfortable explicitly saying how classist and racist they were.
Same part of my addled brain that thinks we should increase dramatically our count of representatives, abolish in-person legislating, and then fill the roles with sortition.
It might slightly help, you'd probably have less votes on giving themselves pay raises, but at the end of the day the majority of ads and voters are going to revolve around party lines.
I’ve learned a long time ago that we’re not always aware of how incentives drive our own behavior, it just happens naturally. This is exactly what’s happening with housing.
similarly they oppose because "gentrification" even though the evidence is that gentrification is net positive, even for those already living in the area. gentrification or not, people leave at the same rate. Those who stay see their income/wealth rise compared to the case of no-gentrification.
These bills permit the construction of denser housing near transit, force cities to actually meet housing quotas, allow the state to override a city’s zoning to permit more housing if they don’t make a good faith attempt, loosen the rules to build ADUs, and many other changes.
Is it ideal that we had to get to this point? No, but housing wasn’t being built.