Why won't they afford to own a home? Is the population skyrocketing suddenly anywhere in the Western nations apart from Israel? They already own one. They could pass houses down to their children.
And yes, zoning and NIMBYsm exists only as long as (slightly) more than 50% of people are satisfied with their housing situation (and thus want prices to grow to fund their retirement), as slightly less than 50% are not (and thus want prices to fall to be able to afford to buy). This equilibrium will of course, self-preserve because zoning rules are not national but change based on locality, so there won't be a single nationwide crash anywhere.
this misses the point. The root of the housing shortage problem in Canada, Australia and New Zealand is zoning. Zoning plus NIMBYs make housing wasteful by allowing only single family houses in vast areas of prime land.
This is a simple supply-demand problem, not anything complicated. The solution is equally simple - make zoning laws basic and limited in scope.
The idea that zoning is the issue is always funny to me because it’s very easy to disprove. Plenty of paces in the US have permissive zoning (like the NY metro area). If zoning was the issue, then one would expect affordable housing in these areas, but it is still totally out of reach for most.
Every single major population center that has distorted (high) housing costs relative to income, also has very strong protections for the existing home owners (NIMBY).
"There are no coincidences..."
The solution is terrifyingly simple: don't allow existing residents to block new housing developments. If they don't like it, they can move.
This will probably never happen in the U.S., because the government no longer functions as intended.
If zoning allows for building more densely (which in the US, it often does not) existing residents can trade their single-family homes for a condo in the same location + some cash. It comes down to a zoning issue in the end, not some special problem with economically developing an area.
That's a problem of regulation/NIMBYsm right? Because if someone has 'captured' entire market, it means no one is living in those houses, they are just purchased and locked up. Meaning, they don't consume any resources, don't result in water, electricity networks etc. being strained, and don't result in extra congestion. Meaning, there's no problem to just build more. Unless regulations/zoning prevent it. So fight zoning, not "inequality".
While zoning is indeed a major problem in the US, ultimately the problem worldwide is that supply isn't meeting demand. If supply was able to meet demand, then prices would be stable and housing wouldn't become an investment vehicle.
Zoning is only the largest component of the supply function in major cities. My point is that I could build as much freaking housing as I wanted where I live, of whatever type I wanted. Our local population numbers are relatively stable. Yet prices have still been surging. Why?
I said cut down in demand, not go into full depopulation. That said, at some point we’re going to need to deal with that. We can’t just keep on importing people from the third world forever to offset people making less babies. Just aim for, say - an increase of population of 1% a year. Right now it’s completely uncontrolled and people are somehow shocked that housing prices are out of control.
Even in Tokyo home prices aren’t bad, and that’s with their culture of tearing down and rebuilding every 30 years. My real point though was that the same is true here - most economic opportunities are in cities. Yet our rural housing isn’t getting cheaper, and it’s increasing in cost almost as much as (most) urban centers.
The point of zoning should be to channel market demand not suppress it, but the current state of America makes me question if that's possible. Perhaps a system where price per square foot going over a threshold triggers an automatic upzoning. There's a whole spectrum of housing for America to rediscover: https://missingmiddlehousing.com/
It's not a question of "would it work", the point is that real-estate prices are rising in dozens of countries, and thousands of cities. Zoning is a local issue. Assuming that the reason homes prices are out of control in Santiago, Chile and in Tel Aviv, Israel for the same reasons as in San Fransisco is, well, silly.
The problem is that if you relax zoning codes you get rich developers at least in the short term.
Leftists should think about it in terms of deliberately producing an oversupply to crash the market. Aggressively relax zoning in areas that have already gentrified where that battle is simply lost and never coming back. Massively expand the supply of $1M+ homes until the supply outstrips the demand and developers are stuck with inventory of housing that they can't move without slashing asking prices and taking losses. Watch as property values fall.
The problem is that both liberals and conservatives are against that, because they don't want to see their property values fall, and that background of NIMBY'ing is where we are. Without really opening up zoning to generate a glut what you are generally talking about is relaxed zoing in a few areas which will be too little to affect the trajectory of housing markets, but will enrich a lot of rich people.
Leftists kinda instinctively know that this economic fantasy of creating a supply glut is just a fantasy, so it does make sense to support things like rent control.
But you know keep punching left like they're the biggest problem, and not the people who understand the limitations of the system.
(This comment's tone totally changed from the start, but I'll leave it as it is instead of cleaning it up so you can take the journey with me...)
The problem is always expensive housing where people want to live. The zoning doesn’t make the housing expensive itself, the desirability of the location does. No one ever complains about zoning in Detroit or Cleveland.
Housing can actually be fairly affordable in Europe. Berlin until about 5 years ago had incredibly affordable housing for such a nice city…then it simply got more popular until that wasn’t the case anymore. Tokyo would have similar problems if its population wasn’t actually shrinking now (as are Nagoya and Osaka), since it’s a nice place to live, and housing isn’t very restricted beyond having to rebuild everything every 30 (SFH) to 50 (apartments) years.
"If the distribution of wealth is incredibly skewed, how exactly could the distribution of home ownership not be similarly skewed?"
YIMBY seems reasonable as response to homeowners leveraging zoning to distort building priorities and so protect their home values. But if one millionaire will pay (rent or mortage) more for a mansion on a hill than all the potential poor occupants of entire apartment building on that hill could pay, then the developers will build just that mansion, even freed from NIMBY constraints. And that's not even taking into account way that the most developers are going to have an incentive to keep rents overall high and so have an incentive keep the housing markets tight.
State housing projects and zoning that actually incentivizes affordable density indeed could help that. But here, not only have housing project not been build but a lot of these projects have been torn down (leveraged by poor-people horror-stories of course).
Anyway, I would answer my question above as "the way we've have decent housing for working class and poor people has generally involved the rich and powerful being far-thinking and seeing improving everyone's conditions improves their position overall." But a variety of factors have thrown out all the far-thinkingness of the powerful today, as is evident in any number of fronts.
I disagree that zoning alone is the problem as you see these market developments in almost all western nations and some of them have ample land to build upon.
Zoning could be more liberal, but it would still be massive stakeholders that would build new homes and rent them out to get a decent ROI.
Actually nimby zoning is more so what prevents this in Seattle. Without such small groups of home owners could potentially drastically increase their profit on their homes by selling together to a developer building an apartment building.
> We could have easily built the housing we need...
If mom, dad, and 4 kids were content to share a 1k square foot "starter" house in 1970, but now all 6 of 'em (parents are divorced) want their own 2.5k square foot McMansion - that's a 15X increase in housing stock requirements. Admitting that the overall demand-side numbers aren't that bad..."no zoning" would still not be anything like a cure for the problem.
And yes, zoning and NIMBYsm exists only as long as (slightly) more than 50% of people are satisfied with their housing situation (and thus want prices to grow to fund their retirement), as slightly less than 50% are not (and thus want prices to fall to be able to afford to buy). This equilibrium will of course, self-preserve because zoning rules are not national but change based on locality, so there won't be a single nationwide crash anywhere.
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