Legislative policies determine the type and terms of the "market economy" that is lived in.

If today's luxury apartment had a decent probability of being tomorrow's affordable one it would not have demand. Unless of course one assumes that luxury buyers are seeking to lose money.

Housing that becomes affordable by the time I am dead is not really "affordable" housing for me.

As long as that ratio is less than one, some people are excluded. Price is what that looks like in a market. Under central planning it’s typically lotteries and waiting lists.

Supply/demand balance in the region is much more important than the characteristics of any particular unit, and that’s what pro-growth activism is targeting.

As a thought experiment, what if you doubled the supply of housing units in Manhattan? Or 10x? 20x? I have a hard time believing housing prices would remain high.

Housing isn't like a car. It doesn't depreciate as soon as the first person moves in.

You're completely ignoring Econ 101.

Housing that is used as housing and housing that is a vehicle for speculation are not mutually exclusive. Rental properties produce rental income and appreciation for their owners. More people looking to make money from real estate investments results in more capital investment going into expanding housing stock, and thus more rental supply, which drives down rental rates.

The places which suffer the most from lack of affordable housing tend to be those that put in place the most impediments to profit-motivated investment. In other words, they ignore basic economics.

- Holding an asset until users become more desperate

- Taking an asset off the market in order to drive up the price of other assets in the category

- Buying an asset to hold, if reliable bonds aren't available in your locale, or there are limits to what assets you can book locally

Not to mention ulterior motives:

- Money laundering

- A vehicle for bribes

Money is quite complicated actually.

Supply & demand - it's the law.

--- Buying real estate to just hold is almost always a losing proposition because of taxes and the time value of money. It is not like a bond, because bonds have guaranteed payouts. Real estate fluctuates in value, quite a lot. It's very easy to lose pots of money in real estate.

Thinking that users will become more desperate is hoping that the government will prevent supply from increasing, or that customers don't simply find other solutions. I suggest looking up what happened when the Hunt Brothers tried to corner the silver market by buying up the supply. Buying up your competition to drive up prices pretty much never works unless the government makes entry of competitors illegal or very hard.

I got kicked out of my unit vancouver unit (3500$/month) because my landlord wanted to sell. In Vancouver's market a unit with a renter is worth LESS than a vacant property. Clearing it out to repaint and upgrade a few faucets is worth more than the rent income. That's how twisted the market has become.

Professional landlords like paying tenants. Investors see them as potential problems, irritants and impediments to redevelopment or construction.

Typically before and after the sale there is work being done on a unit that can’t be done while it’s occupied. Also the new buyer might have different screening they want to do for a prospective tenant, or may want a different lease term, etc.

It’s worth losing a couple months rent to be able to show the unit when you want, to have it cleared out so the buyer can inspect it, and sell it without a lease attached that they may not like. It also limits the buyer pool to sell it already leased to someone a prospective buyer doesn’t know and doesn’t want to know.

pick one

The bigger issue is that "higher density" compared to the old status quo still isn't producing enough new housing to moderate prices; if prices remain high, there are only two fundamental methods to deal with high prices: increase supply or reduce demand.

That isn't necessarily true. It is most obvious when a neighborhood is experiencing gentrification. For example, imagine a SRO hotel in which the rooms are no more than one or two hundred square feet. Buildings like this used to be incredibly common in the Skid Row neighborhood of Los Angeles and multiple neighborhoods in San Fransisco. Many of those buildings are being knocked down in order to replace them with high-rise luxury condos. Since the new buildings are high-rises replacing much smaller structures, the new units can have several times more space per unit and still increase the density of the lot. The problem is that a 1000 sqft unit with amenities like an in unit washer and dryer is never going to drop to the price of a 200 sqft SRO room that doesn't even have an in unit toilet and shower. The new and old homes are so far apart that they don't behave like they are part of the same market.

Case in point: The John Hancock Center in Chicago. 700 units of luxury living since 1969.

Apartments may depreciate, but in a good number of cases condos don't get any cheaper.

There's only two things I see that make sense as answers here.

One is regulation/zoning. Let's assume we could fix that.

The second would be if the sale price dropped below the nominal cost of constructing new units, with some wiggle room in there for opportunity cost to builders who might make more money by choosing to build elsewhere. Do you believe that's the case currently in NYC, Chicago, etc? Is the price so low that it's not even worth it for builders to bother creating new units, because they couldn't recoup their costs?

You also have to factor in the opportunity cost of the land/unit too which is where the argument starts to fall apart. Why build a unit that rents for $X when you can increase your build costs by Y% and charge a rent higher than $X + Y%. That is why new construction generally comes in at or near the top of the market. Construction costs generally don't make up most of the costs of new homes in places like San Francisco, Chicago, or Los Angeles.

But sure, if you want to create a world with no zoning laws and with 10000% increase in housing supply, I am sure it will solve all the problems with pure brute force.

Fixing zoning laws doesn't necessarily mean having no zoning laws.

Ok, building more housing is "brute force." The other option on the table seems to be a tiny sliver of poor people win the artificially low priced housing lottery. I understand why that might feel good, but I don't see how it actually solves the problem in the long run.

People aren't water. They don't flow to any available crevice. They go where the stuff they need and want is.

This effect cascades all the way down the price curve. In macroeconomic terms, increasing supply shifts the whole curve below that point.

This is true so long as the new supply isn’t itself causing new demand, e.g. foreign investors leaving the unit empty.

Which is where your argument falls apart. Cities aren't closed systems. The price reductions won't trickle down to the bottom of the market because at some point there is always going to be people who are willing to move in from neighboring neighborhoods, cities, or regions. It isn't like the only people who live in San Francisco are the only people who can afford it. There are plenty of people who could afford the worst possible home in San Francisco but decide not to move their because they can't afford a home they want. Once those middle of the market prices come down, people will move in to fill that new supply.

Housing ain’t exactly the same as the used car market. I don’t think there’s such thing as a house that was once going for $1M+ that is now “affordable” unless it’s in a horrible state of disrepair.

More to the point, there are plenty of homes that were affordable and in disrepair not long ago, that are now going for $1M+ in exactly the same physical shape. San Francisco’s problem is definitely not that its housing stock is too nice.

If you tax land to increase the cost of carry you will see prices fall. Taxes work.

Disclaimer: I am a landlord

We have to consider the whole system - jobs, office space, etc. If more housing just makes a healthy job market grow even faster in a loop, you've changed a lot just to stand still affordability-wise.

Do we really need ever-growing city centers vs some more disperse way of working and living?

Who are you to tell people where and how they should work and live?

The reality is that many of these new condos are being marketed extensively in HK and other places where there are deep pocketed investors looking for good yields and which may not be able to participate in their own local market.

With this context, it's very appropriate to ask pointed questions about 'whom a development is for.' Is the development accessible by locals whose income is limited by the nature of the local economy, or is it intentionally developed for a global audience whose incomes a local may be incapable of reaching?

Moreover, today's luxury apartment turns yesterday's luxury apartment into a less expensive one.

Markets are a product of a lot of rules that favor one thing or the other. It's not a natural law that markets and the rules have to be exactly the way they are now.