If food and housing gets too expensive, then sorry mate, nothing we can do about it, that's just how the free market™ works, try working harder.
But when labor gets too expensive pushing wages up, then it's no longer the free market, but it's a "labor shortage" catastrophe all over the media and we have to shed tears about the poor business owners wo can't afford a second Porsche, so immigration gets turbocharged until wages come down to their desired levels that businesses can agree is "fair".
have you ever tried building a house? it's one of the least free markets there is. the quickest way to get arrested is to buy cheap land and start putting up houses willy nilly
>have you ever tried building a house? it's one of the least free markets there is.
The "free market" in the context of housing was meant in a satirical way hence the TM symbol. Of course that market is 100% fixed by design but we get parroted the story where it's 100% "free" as if the government has no control over the levers that wholly impact it's pricing (zoning and building regulations, immigration, interest rates, banking and loan duration regulations, banning overseas investors, banning AirBnBs, property taxes, etc)
well, there are genuinely dumb people out there who think that housing is a market failure. like homebuilders are unwilling to take necessary risks or something. and they definitely don't mean the risk of going to prison (100%)
Certainly in the U.K. house builders sit on masses of land but don’t develop it for fear of lowering sold prices. If building a house costs £100k Better to sell 5 at 400k each year for 10 years than sell 50 at 250k
That's not a failure to take necessary risk or a problem of a too-short time horizon. Quite the opposite. And it is certainly not a tragedy of the commons situation.
At least not until you factor in government. What landowners and land speculators clearly don't fear is huge swaths of land suddenly becoming available for building. Or sharply increasing interest rates. Or mass deportations.
A market failure is more like how a CEO is often incentivized to maximize the stock price in the short run at the expense of the long-term health of the company. That is how his compensation is structured.
Not only that, have you ever tried understanding building code in order to construct a "legal" residence? Sometimes it is regulated to the point where I could not build a house unless it had the right angle and shade of red terracotta roofing tiles.
House builders in the UK can employ independent, non Govt, inspectors to ensure they are building to regulations (our equiv of your building code). You can imagine how well that works since these inspectors only have one client.
The beauty of housing going up is the “work hard” in tears wages which then increased the price of housing.
The land owners take all the extra work and laugh all the way to the bank.
Of course if people collectively decided to work half as hard there would be less money for housing and then prices would come down. Workers wouldn’t lose out.
Then when wages do come down and questions get put to politicians and the central bankers about the lack of wage growth they shrug their shoulders and act confused like it's some unsolvable math problem.
But when labor gets too expensive pushing wages up, then it's no longer the free market, but it's a "labor shortage" catastrophe all over the media and we have to shed tears about the poor business owners wo can't afford a second Porsche, so immigration gets turbocharged until wages come down to their desired levels that businesses can agree is "fair".