Now if you want prices to go down, are you really going to do it by trying to decrease demand? What are you going to do, make your neighborhood a slum on purpose? Absolutely nobody is doing that.
No matter how nice a place people live, they always want it to be nicer. They want better schools, nicer parks, clean streets, quality infrastructure. They want to attract nice businesses and cultural institutions.
The problem is that doing this necessarily increases demand, and increases prices. Unless you are an owner, doing this risks pricing yourself out of your own home. So what can you do to keep rent down? Well, increase supply to match the increase in demand.
Now you have a new problem. Increased density puts pressure on the infrastructure and makes it a less-nice place to live. That park sure was a lot nicer when it was half as crowded. Those new restaurants sure were a lot nicer when you could actually get a reservation.
It’s a very difficult dance to keep all these things balanced. Ultimately everyone wants to make the place they live nicer, no matter how nice it is already. You can never try to manage this problem from the demand side unless you find a set of crazy people who love living in a sty.
You're just describing population growth and competing incentives, entirely normal things. They can be incentives from completely different sets of people at different times in their lives. Plenty of people are fine with density as long as the place they live is maintained and law is enforced, likewise plenty of other people grow tired of noise or have kids and move to quieter areas (areas w/ people who will then complain of urbanization).
Again none of this is something that benefits from heavily centralized control, unless you want cities to be expensive exclusive zones, and force poor people to only live in rarely built (and poorly maintained) government housing while the rest are forced out into sprawling suburbs, with just as restrictive building rules, which can only forever expand outward consuming forests and farmland + forcing more cars onto the highways.
Then everyone has to drive into the city for work, meaning a political base who doesn't care about downtown infrastructure like public transit that only serves a highly exclusive downtown.
> No matter how nice a place people live, they always want it to be nicer.
I'm trying to make sense of your argument. No matter how nice a vehicle people have, they always want to have a nicer one. But we don't see normal cars costing 50-80 years of your life to purchase.
Cars are depreciating assets. They can only be maintained and upgraded to a certain extent before they must be replaced.
A public park, a street, a school, these also depreciate, but most of them can not be thrown out and replaced like a car. They require constant maintenance. They also have nearly unlimited capacity for upgrades. The school gym can get new equipment. The street can be repaved. The park can get new landscaping. Wherever you live, the public amenities can always be improved. There is always demand from the residents to make those improvements.
Nobody ever tells their town to uglify the neighborhood. They always ask to beautify it. That means they are always asking to increase demand, and therefore to increase housing prices.
But under the current global monetary system, buildings increase in monetary value as they physically depreciate. If they are maintained or improved, their value only increases more.
> Nobody ever tells their town to uglify the neighborhood.
Young people move out of towns until they are more or less ghost towns. During this entire process, real estate keeps increasing in value, although demand is steadily and predictably vanishing.
No matter how nice a place people live, they always want it to be nicer. They want better schools, nicer parks, clean streets, quality infrastructure. They want to attract nice businesses and cultural institutions.
The problem is that doing this necessarily increases demand, and increases prices. Unless you are an owner, doing this risks pricing yourself out of your own home. So what can you do to keep rent down? Well, increase supply to match the increase in demand.
Now you have a new problem. Increased density puts pressure on the infrastructure and makes it a less-nice place to live. That park sure was a lot nicer when it was half as crowded. Those new restaurants sure were a lot nicer when you could actually get a reservation.
It’s a very difficult dance to keep all these things balanced. Ultimately everyone wants to make the place they live nicer, no matter how nice it is already. You can never try to manage this problem from the demand side unless you find a set of crazy people who love living in a sty.