Markets don't optimize for "everyone gets some", yet that's precisely what you need for housing. You'll always need the government to come in at some point to provide for those left behind by the free market.
I don’t dispute that there are levels of affordability that are bad enough that they start to lead to various forms of homelessness, but it doesn’t seem to me like a fundamental rule that, if some people can’t afford to live alone in a large amount of housing, they also can’t afford to live with roommates sharing a smaller amount of housing, and that the right level of housing prices should also price some people out of those arrangements (ie it demands a pretty high level of inequality if you assume that the market allows typical people to afford to live alone and that sharing can typically reduce per-person rents by half or more)
You underestimate how intrusive these people will be to protect the value of the single largest asset most of them will ever own
You provide no basis for the idea that the returns on housing have to drop below the point at which its financially viable to build before housing becomes affordable. You just say "because" then restate your premise.
> Markets don't optimize for "everyone gets some", yet that's precisely what you need for housing.
Just because markets don't optimize for it, doesn't mean it doesn't achieve it.
> You'll always need the government to come in at some point to provide for those left behind by the free market.
Disagree.
Our food is supplied via markets and yet with just subsidies almost nobody starves across western countries.
Building is risky and costly
Having an asset that appreciates on its own regardless of what you do with it is not
Vacant land that's desirable is often held back from development due to zoning or infrastructure issues.
Capital that could be invested in better serving the bottom half has to compete not only with the use of those resources to further enrich the rich but other investment opportunities.
Think about it this way: assume you supply all the housing to all the rich people. Then there still remains untapped demand of others that can be fulfilled by further production of homes for those specific people.
This story fails when land becomes restricted, which is exactly what zoning laws cause. Zoning is a big harm to the poor.
This disregards basic geometry. Sure, in some rare situations you only have one small plot of land surrounded by existing construction or natural boundaries. But, in the majority of cases, you have one large plot of land, and you can either construct one big house on it, 5 smaller houses, 10 small houses, or 200 apartments in a block. The rich are absolutely competing for this lot with the poor.
And as inequality goes up, the rich can even start contemplating buying up surrounding properties, tearing down construction, and transforming a small plot into a much larger one.
As with everything the regulator needs to strike a balance to make the market work.
> ... and even investment properties occupied by nobody ...
Not much of an investment. Something is wrong if that is happening, probably manifesting as a lack of supply. Otherwise what is the point of an "asset" that doesn't generate income, degrades over time and could easily be rented out at a profit rather than sitting unused?
Whatever scenario there is where it makes sense to have an empty property, assuming a sane policy backdrop, it'd always be better for the owner do what they were going to do anyway but also rent it out.
Short term rentals are better on that score: no one sensible forms a long-term expectation that they're going to live in an Airbnb that they've rented for a few days. (If you think short-term rentals are "bad" for the long-term market or have negative side-effects on the neighborhood, then tax them to manage that tradeoff. But banning them altogether is unconscionable and just leads to houses sitting empty and unused.)
As for larger homes, people should be allowed to live in there as larger, extended family groups - a common pattern in non-Anglo cultures. Ban "single family" restrictions since they amount to unconscionable discrimination against such reasonable living arrangements.
I'm honestly trying to take this seriously, but I really can't square the problem of location and utility. On of the reasons why West Virginia has such a low homeless rate is just that mobile homes and manufactured housing is pretty much legal in many areas around the state. One of the reasons why California is so expensive is that those types of inexpensive housing options are effectively illegal statewide.
What are the employment options there? If I move to a cheap house somewhere where there are no jobs for me, I just moved somewhere where I cant afford.
But it isn't a right, just because you would like it. Same as I don't have a right to a car at price I would like, just because I live, by my choice, in rural environment close to nature. I desperately need one though for work commute, shopping, taking kids to school etc so thats as non-optional as accommodation to existence of my family. I can either suck up car's actual prices, move whole family so I don't need it or do similar choices in life to tackle that.
But car ain't a right. Same as your own accommodation, of course not a modest small apartment but a house, ideally close to work, amenities, schools, and costing peanuts. Literally what everyone else wants. Or am I incorrect in your expectations? Because if yes, its easy to accept cheap remote small old properties, those aren't expensive for above-average earners at all, anywhere.
China has a 96% homeownership rate.
Kazakhstan 98%
Laos, Romania, and Albania 95%
Slovakia 93%
Russia 92%
> Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
"Go build homes [beyond equilibrium]" is not a solution
Sure, so long as involves (you / us / society) not housing people which is pretty sick and twisted
But, to make Austin more affordable still, you make it less expensive to build so that it’s profitable to build. Typical regulations that do this are: - Lower minimum sizing requirements - open zoning - raise height limits - make sure you don’t have unwarranted restricted fire codes (some places have elevator stairwell requirements that are insane) - make permitting easier or not required at all for some cases - no min parking requirements
Pretty sure as good as Austin is, they could easily reduce the costs by up to 30% (there are parts of the country with 50% the cost per sq ft for new construction).
Another reason is high demand in locations where offer is limited due to physical limitations. There’s always demand to live in Broadway, and offer can never catch up due to its physical limitations.
Nowhere in the economic theory there is a proposition stating that prices should fall below affordable levels, given enough competition.
Construction labor is quite expensive and so are the raw materials (and going up). Means there is a hard lower bound on cost and unfortunately it's not that cheap even if they built at zero profit (which nobody will).
No. Why do you guys fall so easily for the "regulation" cliche?
The answer is far easier: unwillingness to invest.
Why are there investment funds willing to burn through tens of millions in stupid stuff like NFTs or pets.com, but investing $10m on a 5 story apartment building that can get you a solid RoI of 20% is frowned upon?
Literally an appeal to ignorance.
"What else could it be?"
In reality, those ideas do not apply to the housing market, esp. as there is no real competition; and because the demand is absolutely inelastic (if we are already applying in MBA-wording universe)
Also, that this is true you can see if you compare to housing markets which "are more free than the Australian"
I can only think of extremely land-limited places like Monaco and Gibraltar. Where the answer is "not everybody should live in Gibraltar".
But the US has a lot of land. So much land that it can afford wasting it on endless sprawl of single family homes, which is the least efficient way of providing housing. Most Asian megacities would not be able to exist if they had as strict zoning principles as the US has.
Maybe you should also think about barriers such as "bans on boarding houses". This is what messes with poor people the most. A room in a house full of rowdy individuals sucks, but it is still a room. Possibly you may spend just a year there, then find something better. A tent in an encampment of rowdy individuals is strictly worse on all accounts except cost, and bouncing back from that is harder.
- reduce restrictions around planning / construction / etc (because it takes time and expertise to comply, both of which cost money)
- find a way to bring in cheaper labor, or make it possible for construction companies to hire the same labor at a lower price. Maybe a subsidy, maybe reduced taxes, maybe relaxed labor laws
- add a subsidy for homes
- make your citizens more wealthy, so the price is no longer above their means
- outsource construction to a place that can build it more cheaply (eg, prefab homes)
It's far easier than that: just have your regional/local government finance urban renewal projects that increase occupation density. You can even tie the project to the expansion of a public transportation system.
