The unwillingness of voters to expand the housing supply is one the greatest social ills of our time. I can accept and understand that those who benefit don't want to address the issue. But, there are countless many who don't benefit from it at all.

Why is this not a great national issue of enormous debate? Why is there so little visibility? everytime i see a list of voter related issues, housing is never mentioned.

Shelter is a fundamental human need - it's at the very bottom of maslow's hierarchy of needs. If humanity can't even get past this bottom layer, we're not going anywhere.

The entire concept of real estate is wrong. You hear it all the time. Whenever real estate prices go up, people react like it's a good thing - it's not. For society to make progress, prices must come down. It's not just for those who don't have a home. Property owners should benefit too, with lower tax bills. Of course prop 13 creates more perverse incentives than i can count... I could go on, but we've already discussed this millions of times.

Good question, but I think the answer is that it's simply not a national issue. In New York City, you can bet that it's a campaign issue across local politicians, and it's in the news weekly. Also, it's not true that one 'can't build' in NYC due to regulations. While there are regulations (as one would expect of a highly densely populated city), there's plenty of building. The price of land, however, is obscene.

Meanwhile, that $1M condo that's one bedroom apartment you purchased in Manhattan (in Manhattan it's probably small) or even the $800K 2 bedroom you purchased in Brooklyn (in a cheaper part of Brooklyn, like Bed Stuy or Bushwick), you could live like a Sheikh in a place like Omaha, NE or (perhaps) Dallas, TX.

Hotpots like SF, NYC, Boston and so on - the smaller, dense cities with jobs and no land left - no so much.

It's not a national issue. Everyone wants to live in California because you get nice weather, high salaries and cannabis edibles rain from the sky. You're a victim of your own success.

Ultimately I think trying to slow down or deflate the bubble might make things worse for more people than just letting it pop.

To be clear, I think it's unconscionable that we prioritize these concerns when rents are so high, but average people absolutely do benefit from restrictions on housing supply as long as they are secure in long-ago mortgages and grandfathered rent control.

One of the NIMBY talking points is that upzoning creates a profit incentive to destroy rent-controlled buildings and replace them with higher-density market-rate buildings. Rent-controlled lease holders actually become more secure in their positions when the neighborhood downzones.

This is really about seniority/tenure in an area, and if there's any serious reform, it will likely be to further protect those with grandfather status from newcomers.

The problem is that, based on how things work, a significant amount of our assets are tied up in real estate. If you're a homeowner and your home's value tanks compared to the rest of the market, you're screwed! You can't move to another place because you've lost all of the money that you put into your home.

It gets even worse if you need the money: Think of elderly who sell their homes and use the profits to pay for assisted living.

Or, look at how we pay for education: We use our homes as collateral for education loans!

Real estate shouldn't be an investment, it shouldn't raise in value, and it shouldn't be possible for a huge chunk of the population to fund the financial sector through mortgage interest. It's a tax on everyone designed to funnel wealth upwards towards a sector of capital owners that get paid for doing very little.

Regulations and taxes should be arranged such that it is very expensive to own real property that isn't for your own personal or business use. If you want to act as a gatekeeper for real estate, at least a large chunk of the profit should go to the state for the benefit of the public. If it's expensive and not beneficial to own things so others have to pay you to use them, the market will shrink dramatically and more people will actually be able to own homes.

This is an economical impossibility. Land becoming more valuable is unavoidable, because of the weather, of the people that surround you, the availability of jobs. Rent is high in SF because people are moving to SF and finding high paying jobs. Its not an unrelated effect.

So if there is land more valuable than others, and you taxed away all the value of the land (lets supposed that rent is taxed at 200%, hence all rents drop to 0), you are now going to see something new: people buying land. Now instead of renting, the only operation left is buy and sell. Provided it is cheap at first, because investors would all dump their properties, it will be impossible to get later on. Its an extreme case of rent-control.

Investments, including land, are owned on the backs of consumption foregone in the past.

All investments are not owned on the back of consumption foregone in the past.

Unless you believe that someone with 100 million dollars is "foregoing consumption" when they invest (particularly in real estate).

One is consumption; the other is investing.

There is a case to say that big money that buys land does something to make it more valuable, and hence there was care and investment. But most of the time, land is something bought long ago, that has benefit basically forever.

Land also has the chicken-egg problem capital doesn't have. The first one that built a house didn't consume his capital, the first one that got the property rights didn't consume capital whatsoever.

I am closer to your position than to the other commenter in this thread, just wanted to distinguish that land can capital do have some differences worth thinking about.

My apologies on the prior post; I meant to imply that buying unimproved land in the "right" place is a great long-term investment.

Yet those returns (10x-20x) are lower than having invested the purchase price in the S&P500 (with dividends re-invested), which returned a 21x to 30x total return over that same time period (depending on which exact spot you chose to be the "70s")

https://dqydj.com/sp-500-return-calculator/

The house also provided a place to live, so you need to goose the house effective returns a bit there, but that place to live also came with overt property taxes, maintenance expenses, etc.

In contrast, the capital gains from owning a home are exempt for a certain amount, and "imputed rent" (the savings from not having to rent a similar house at current rates) is untaxed, like any other cost-saving purchase. [1]

(One small advantage the other way is that you don't have to pay "property taxes" on mutual funds, though you do have to pay management fees, which, even for index funds, are of similar magnitude.)

[1] IIRC the original income tax did cover imputed rents of sufficient magnitude.

In my view, the tenant is paying the property taxes on the space they rent to live in, so the mutual fund investor (who is also a tenant) is paying property taxes, just on their housing not on the funds.

It's rolled into the rent, but there's no reason to me to think that the landlord is paying it when the tenant is the one bringing the money into the system.

So you have checked with every property owner and verified this?

I actually rent now, from my father (because he makes bad real estate decision despite having his real estate license). After talking with my landlord, who I know well and often talk to, I learned that in this area there are laws about how low rents can be. In his specific situation he is not allowed to rent the property for less than 125% of the price of his mortgage payment which must include the property taxes. Apparently, this is to insure there is money repairs.

So as for houses in Omaha I am fairly certain you are factually in error. I suspect other jurisdictions have other things going on in general, but it seems reasonable that most people do simple things like take their expenses into account which includes tax.

Also, do you think property taxes and maintenance expenses aren't passed on to renters in the form of higher rent?

1) Mutual funds get hit with a lot more taxable events (any rebalance or dividend), and only a small fraction of that can be shielded.

2) Even if you could borrow to invest, stocks fluctuate a lot more and you would be subject to margin calls.

3) You are implicitly paying maintenance/insurance costs as a renter, true, but only as a renter do you benefit from division of labor and tax-deductibility of such expenses.

4) For the specific time history: It would have been difficult in the 70s to buy something like an S&P index mutual fund; Vanguard started then but you're unlikely to have heard of them. Then again, you wouldn't be borrowing at 5% either!

So technically you're using low-cost mortgage lending (2.15% rates are possible) to invest and get 5-7% returns on average, plus writing off the interest payments.

Which is subject to depreciation recapture upon sale, so it's more of an immediate cashflow benefit than a long-term structural benefit. (It can also be seen as a form of "hand-out" to renters, but it's unpopular to complain about that, so few people do as compared to those who object to mortgage interest deduction.)

Of course you can [0], and it's even cheaper than mortgage interest (because it's much easier to margin call a stock a portfolio than a house!).

[0] https://www.interactivebrokers.com/en/index.php?f=1595

indeed. there are also more transaction costs involved in real estate, too. driving around to look at properties, real estate agents, significant paperwork, etc.

If we could get housing interest rates up to 8% you'd see a large decline in housing prices. If it got up to 1970's and 1980's rates it would be around 17%. This would dramatically reduce the price of a typical house and become a darling market for people who have can pay in cash.

I dont think thats whats going on. Concentration of work in cities is a global effect, and although china erupting cash over the world might change some numbers,it wouldnt explain the migratory movement from rural to cities.

The easiest and most classical explanation of housing prices in the US is that construction took a huge hit in 2008, and getting the whole system to produce more housing for the demographic growth is lagging. I remember seeing some data about that happening.

A more esoteric one is that we are living in a world with a curious monetary policy, with low interest rates but no inflation, and that as money gets more expensive, housing demand will lower and so will its prices.

100 years ago being north of Virginia meant trading milder summers for worse winters. But, summer with high humidity and no AC can be brutal.

New York City and San Francisco beg to differ...

San francisco is on the flat part, look at a topo map from San francisco to San Jose and compare elevation with population density.

Rich people buy real estate because it steadily rises in value. Not the other way around. If motorcycles had the same price development, they'd buy motorcycles instead.

The interesting question is why real estate prices behave like this.

And that's where people buy housing as investment.