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.
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.