That’s not entirely true, for a number of reasons.
* Low-density housing that’s rented instead of sold drives up rent for the tenant and property values for neighbors, resulting in increased costs for everyone but the landlord (who offsets costs by raising rent)
* Investors are predominantly buying affordable homes, not luxury ones. Cheaper prices (even when paying cash to outbuy other bidders) means higher margins.
* Construction has fundamentally changed as a result. No longer are structures being built for sustainable operations, but simply to exploit valuation growth before being shoved off to the next buyer. The goal from everyone involved is maximum margin/profit, not quality and sustainable shelter.
* There’s a glut of “luxury” apartments in higher-density units that sit vacant as a result of gaming the local marketplace for higher rent instead of maximum occupancy.
We have enough houses at present. Really, we do! The problem is that because we treat them as assets and not shelter, the goal is maximum revenue, profit, and/or valuation instead of maximum utilization.
> Low-density housing that’s rented instead of sold drives up rent for the tenant and property values for neighbors, resulting in increased costs for everyone but the landlord (who offsets costs by raising rent)
It's not the renting that drives up prices, it's the lack of supply in an area. The renting was always possible, it's a symptom that shows that people want access to the neighborhood but can't afford to purchase.
> * Investors are predominantly buying affordable homes, not luxury ones. Cheaper prices (even when paying cash to outbuy other bidders) means higher margins.
I have not seen evidence of investors buying affordable homes for renting them out. Cheaper prices don't mean higher margins, unless the sale price is higher.
> * Construction has fundamentally changed as a result. No longer are structures being built for sustainable operations, but simply to exploit valuation growth before being shoved off to the next buyer. The goal from everyone involved is maximum margin/profit, not quality and sustainable shelter.
This is not a change, construction was never for sustainable operations, it was always about profit. There's not some magical time in the past when builders and developers didn't care first and foremost about profit.
> * There’s a glut of “luxury” apartments in higher-density units that sit vacant as a result of gaming the local marketplace for higher rent instead of maximum occupancy.
I'm not sure where that's true, except in the places where prices are falling like in Austin. I know that in my severely undersupplied town, the "luxury" apartments that are only slightly higher in price than in other areas are filling up faster than was expected when the financial model was put forward at the time of designing the building. And this was a model built before interest rates got jacked up by the fed! Yet local people complain that they are vacant and not getting rented out and are vacant when they are not in fact vacant.
I see evidence of false complaints of vacancy all around the country too. One group in LA that spends a lot of their time trying to stop apartments had to retract their vacancy report:
Nobody has ever tried to maximize occupancy rather than profit. Maximizing occupancy is not a good metric to even optimize, we need vacancies so that there's room for people to move around. An area with less than 5% vacancy is severely undersupplied and severely restricts where people can live.
The housing crisis is all about regulatory restraints that small-holders of land use to create the crisis. It's artificial crisis, not from landlords maintaining 5% vacancy rather than 3% vacancy, but from landowners, especially homeowners stopping their local governments from legalizing housing.
* Low-density housing that’s rented instead of sold drives up rent for the tenant and property values for neighbors, resulting in increased costs for everyone but the landlord (who offsets costs by raising rent)
* Investors are predominantly buying affordable homes, not luxury ones. Cheaper prices (even when paying cash to outbuy other bidders) means higher margins.
* Construction has fundamentally changed as a result. No longer are structures being built for sustainable operations, but simply to exploit valuation growth before being shoved off to the next buyer. The goal from everyone involved is maximum margin/profit, not quality and sustainable shelter.
* There’s a glut of “luxury” apartments in higher-density units that sit vacant as a result of gaming the local marketplace for higher rent instead of maximum occupancy.
We have enough houses at present. Really, we do! The problem is that because we treat them as assets and not shelter, the goal is maximum revenue, profit, and/or valuation instead of maximum utilization.
Hence, housing crisis.