You can't have an eternally appreciating housing market and affordable housing [0], one has to give. Our current housing market appreciation comes from systematic housing shortage.
Rognlie finds out that the increase in return to capital (vs return to labor) observed by Piketty comes largely from the residential real estate sector [1].
It turns out, Henry George was right. We need to tax the value of land such that we capture all of the economic rent that rightfully belongs to the community and distribute it to the community as a dividend. The same tax will spur a more efficient use of land and, thus, more housing supply. The dividend will serve as a cash-based safety net for the community members.
Additionally, at some point we have to make the switch that Japan did in how we view housing: as a depreciating asset.
[0] Note that the only sustainable way to have affordable housing is if market-rate housing is affordable. Publicly owned/built/subsidized housing is useful for handling exceptions, but not for your main point of supply.
I've been thinking about this as well, and I think the crux of the problem is that housing is a prime investment. I'd imagine for most older Americans, real estate makes up a significant amount of their nest egg. In my circle, it seems like there is much more talk about housing investment than stocks or something similar.
If this is true, then it implies that the corrective paths are all things which will negatively impact the investments of anyone with a mortgage. I wonder what percent of the voting body they make up? I think this is part of why we aren't seeing change. It seems like somebody has to lose out.
I think these are the main solutions. As you see they are all legislation dependent:
1. As you mention, larger tax on housing, especially on those which are used as rental properties.
2. Saturate housing markets with government housing, which don't need to be priced at subsidized rates but only at a rate such that no rent seeking behaviour would be practiced in a 40-50 year window. A 0% IRR investment from the government would not cost taxpayers nearly as much as subsidized housing.
3. Relax building code standards and zoning regulations to drastically increase the supply of low cost real-estate opportunities.
4. Related to 3, relax laws relating to mobile homes/RVs/tiny homes and allow people to live in them if they have a place to keep them. I know in many places this is illegal, even in very rural areas [1].
There is no "systematic housing shortage." There are 59 vacant housing units for every homeless person in the US. [0] Even California has more than 9 empty housing units per homeless person. [ibid]
That's a bad indicator for whether there is a "shortage" or not.
You need a sufficiently high vacancy rate to be able to have a dynamic marketplace: if all houses were occupied then moving then moving houses would involve swapping houses with someone (or having a short-term stay... which means not all houses were occupied).
We live in a spectrum, the higher a vacancy rate the easier it is to find a house that meets your needs.
It really is not surprising that as vacancy rates go up prices go down [0]
This is known as “vacancy trutherism”, and it has about as much truth to it as q-anon. The vacancy rate is in the low single digits, and the less vacancy there is, the less affordable the market is. The vast majority of vacancies are units that are in the process of being rented or sold.
The idea that there is some Illuminati cabal of housing speculators holding vast numbers of units off the market is a crazy fantasy pushed by those who don’t want to face the reality that our society has not built enough housing.
The article you link shows how laughable this concept is. It contains a table of states ordered by their vacancy to homeless ratio. One would expect that the states with the worst housing crises would appear at the top of the list. But California appears at the very bottom of the list, since it has the lowest number of vacancies per homeless people. This would imply that California is doing the best out of all the states on housing!
Reported vacancy rates (the ones you’ll hear quoted in the media) are usually discovered by asking real estate agencies how many of the properties on their books are currently available to rent. It doesn't include houses otherwise unavailable for rent such as holiday homes or those being 'land banked'.
For some data on Low Use Properties (LUP's) and speculative vacancies in the UK and Australia respectively, see [1] and [2].
Also worth checking out official government statistics for NZ where the difference between the number of households and the number of residences is about 7.5% nationally. That compares with almost half that rate 25 years ago. This change has occurred amidst a property boom purportedly driven by a shortage of properties (really it is a speculative boom driven by a shortage of investment opportunities in the form of residential property).
The solution to this in my opinion is to remove the privileged tax status of property investors and introduce a wealth tax in the form of a Land Value Tax. Political suicide unfortunately.
Citations very much needed. A 59:1 ratio of available units to those in need of housing, which has been increasing over the years, prima facie shows there is no housing shortage. Moreover, with that high of a ratio, everyone looking for housing could have it, with plenty left over for those who have none.
I've offered facts. You offer nothing concrete. Which of our comments is more like the drivel Q-Anon spreads?
Rognlie finds out that the increase in return to capital (vs return to labor) observed by Piketty comes largely from the residential real estate sector [1].
It turns out, Henry George was right. We need to tax the value of land such that we capture all of the economic rent that rightfully belongs to the community and distribute it to the community as a dividend. The same tax will spur a more efficient use of land and, thus, more housing supply. The dividend will serve as a cash-based safety net for the community members.
Additionally, at some point we have to make the switch that Japan did in how we view housing: as a depreciating asset.
[0] Note that the only sustainable way to have affordable housing is if market-rate housing is affordable. Publicly owned/built/subsidized housing is useful for handling exceptions, but not for your main point of supply.
[1] https://www.brookings.edu/bpea-articles/deciphering-the-fall...