The solution is to build more housing. Look at all the restrictions in NYC, Boston, LA, SF -- the costs are high because people want to live there and the government refuses to allow people to build.

In the cases where someone can make it through the years long process to get a building approved, the only thing that makes financial sense to build is luxury apartments.

If you want more inexpensive apartments the key is to build more of them.

> the only thing that makes financial sense to build is luxury apartment

Exactly! That's the problem with housing as a market commodity -- developers will only build luxury housing or slums. A deregulated housing market looks like this: https://en.wiktionary.org/wiki/slum#/media/File:Mumbai_03-20...

Affordable housing requires public investment, public housing. There is no other solution.

Sure. I mean, you can sell pretty much any kind of car, as long as it fulfills all the safety regulations. That's why the free market only builds Lamborghinis and utter rust buckets.

Trust me, if developers could freely serve every sector of the market there was demand, without being choked by zoning, land supply, etc, we would see the whole housing range from the Toyotas to the Testarossas.

Cars can be a psuedo-free market, because you can buy a car built in Detroit, but drive it in Boston, and everything is fine. You can buy a car from Tokyo, and drive that in Boston and everything is fine. You can also choose not to buy a car, but instead buy a motorcycle, and everything is (mostly) fine.

You can't do that with housing. No amount of new zoning or new construction can solve that problem, because the land in every city is already fully monopolized.

Housing will never ever be a "competitive" "free" market. It can't be, because buyers don't have meaningful agency in their choices (for all but a few exceptions, everyone basically has to live pretty near their work/school/family), and buyers can't opt-out of the housing market (there are no reasonable alternatives except things like homelessness, which aren't reasonable).

Looking forward to purchasing real estate imported from Japan.

It seems like you're invested in missing the point, but will you accept the analogy of restaurants? A wide variety of restaurants exist in most cities across a wide spectrum of prices. It's not a given that some 5-star French restaurant is necessarily the most economical use of a storefront everywhere. It might make more sense to build a Buffalo Wild Wings. But if you can only build a limited amount of housing, much less than what is demanded, you'll only be selling to the highest bidder anyway, and since you know you can fill your whole building with your target customer type you might as well build exactly what they want because then you can charge a bit more for it.

Mumbai is extremely regulated, and much of the city has strict height limits. The slums there are mostly built illegally.

Housing is a resource. If you have a magic wand to make resources exempt from economic forces, please wave it over food prices for the rest of us.

The reason economists get so excited about abstract issues of market efficiency is because if supply and demand don't balance naturally there will either be too much or not enough of something (effectively). Introducing rent controls will push the market towards the not-enough end of the spectrum and shortages will get worse.

> The unregulated market has never and will never provide affordable housing to all on its own.

That is a huge claim. If people could use their land as they like there probably wouldn't be a housing shortage. Developers make large fortunes out of install dense blocks of apartments; and doing that isn't going to make housing more expensive.

>Housing is a resource. If you have a magic wand to make resources exempt from economic forces, please wave it over food prices for the rest of us.

That magic wand is called public policy. There are similar things you could say about food -- i.e. how unregulated markets lead to developing countries being forced to export cash crops instead of growing food that people in that country need to actually eat.

>That is a huge claim. If people could use their land as they like there probably wouldn't be a housing shortage. Developers make large fortunes out of install dense blocks of apartments; and doing that isn't going to make housing more expensive.

4.8 million households in the U.S. depend on Section 8 to afford rent. These are direct subsidies to landlords to house these people. In an unregulated market, landlords would not rent to these people, and they would be homeless, or they would live in actual slums, which don't really exist in the U.S., but would have to in a fully unregulated market.

> That magic wand is called public policy.

Public policy doesn't exempt resources from economic forces, it's just a mechanism to divert resources from one area to another. It just allows you to fudge a little bit, push resources here and there. The Soviet Union eventually collapsed because towards the end for all their fudging they couldn't keep up net economic production. All effective policymaking comes from understanding constraints and operating within them to achieve the best outcome. For that reason - pretending that constraints don't exist is a recipe for bad policy.

I'm going to make the point that this is comparing an actual warts-and-all reality to a hypothetical "someone very reasonable will just get it right" system - the reality will never measure up to an ideal. That out of the way...

Public policy is not a magic wand that creates something from nothing. Governments that believe that tend to be called socalist and the worst case scenario for socalist governments tends to be much worse than for capitalist governments. Public policy can allocate resources from people who make money to people who make less money, but it is a lousy tool for trying to create more housing when there is not enough housing. A much better policy would be to remove government restrictions that actively prevent or disincentivise people from building housing/renting it out. That is to say: less controls on rent and construction.

> 4.8 million households in the U.S. depend on Section 8 to afford rent. These are direct subsidies to landlords to house these people.

I don't like welfare either, but it is certainly a step up from rent controls. Rent controls are an actively destructive policy that work directly against getting everyone in a house. Welfare is only questionable incentive structure and some welfare is appropriate.

Public services can be exempt from economic forces if a society deems them worth the cost. Generally in most first world nations you aren't denied life saving treatment on a cost benefit analysis.

In the same vein, it seems like its almost necessary that governments be leading the density charge in building. There should always be a public housing option everywhere, and it shouldn't be a default ghetto. Japan does an extremely good job providing a baseline amount of public investment in dense urban housing that helps regulate the unit supply the private market is otherwise managing.

We need more housing if there's a housing shortage. Build more.

I agree -- but we need public housing. The market does not build affordable housing.

Libertarians have this idea that the housing market is restricted by government regulation and just needs to be freed in order to flourish. In actuality, the only reason there is any affordable or low-income housing in the U.S. is because of government money (Section 8, LIHTC, public housing, etc). Homelessness is a totally solvable problem, and any place that has solved it knows the solution: build enough homes for people to live in, through state-funded programs!

I'm genuinely curious where the seemingly new faith in federal government has come from, while criticism of local government (police action, city and town policies, county actions) seem to be on the rise. I'm neither Democrat nor Republican. Both parties have become too corrupted to support in any legitimate way, and I tend to only look at what policies any candidate supports, which is getting more and more difficult, as everything is in 20 second sound bites. But broad federal government as opposed to local government always seemed far more disconnected and I'm curious as to why the boost in popularity of this centralization in federal power on "both" sides, seemingly.

If you don't have faith in your government, you need to fix your government. Nothing else in society can be healthy or long term stable if you are operating under a fundamental distrust of the exclusive wielder of violent force. Its fundamental.

Going into an election season its valuable to remember. Housing, healthcare, the military industrial complex, infrastructure, bribery, corruption, undemocratic elections, polarization, etc are all fundamentally a product of flawed government. Its not just a "get money out of politics" flawed, its a fix elections to be representative and equitable, make representatives accountable, make everyone matter and have equal influence. Because contemporary American government is hugely against all these points.

Its a super hard problem of course, but it is the problem to solve first - nothing else is going to get much better while things are very likely to get worse so long as the disconnect between having an educated rational electorate whom are fairly and justly represented by elected officials accountable to them isn't the general state of affairs.

I have no problem fixing government, but it has been shown time and time again that the biggest bag for your vote is to vote is local elections. Making your voice heard on the local government level can and will have more of an effect, with less influence (on average) by corporate monies than at any other point in the political process. The focus has continuously been swayed to a larger, more centralized power stricter with a greater disconnect that seems to be less interested in "getting to know" for lack of a better phrase, it's constituency. It's a matter of scale. Local governments, by their nature, are going to be more interested in their local constituency. They, then will come together to answer to a larger, managing power. At least, that's the theory. Ceding these self interested small government bodies to large monoliths seems like a step backwards. Even when thinking about it from a program architecture standpoint, it seems like going back to the 70's style of monolithic services instead of the modern approach.

I blame hot topic and the che guevara shirt trend. For some reason people have convinced themselves socialism is the solution to everything while at the same time complaining about surveillance states and corrupt/racist police.

It's bizarre to me.

There are plenty of markets in which the median household can easily buy or rent the median house, because competition drives the price down towards the cost (labor and materials, which just aren’t that expensive). The crisis exists near big cities because zoning boards have created massive shortages of buildable land, and builders and landlords can’t possibly satisfy more than a small fraction of total demand. Naturally they prefer to accommodate the highest bidders. If more inventory existed they would have to take lower prices for it.

If SF only allowed one Burger King and no other restaurants or grocery stores, the price of food would be shockingly high, yet government subsidy wouldn’t be the most effective fix.

Cheap, market-rate housing does exist in every city. It may not be where you want to live, but it exists. The issue is transportation, not subsidized housing that locks low-income people in an apartment they can't really afford.

Every city in the USA builds less housing than 20 ago, adjusted for population, etc. The primary reason is wealthy HIMBYs, lawsuits, laws, mandated affordable housing requirements, etc. In DC most new buildings require huge payments to the affordable housing fund, which in turn jack up middle class rents. Nonsense.

Which housing crisis are you referring to? Is it the one created by the unregulated free market which will never provide housing to people? Or, is it the one where regulations have not created enough affordable public housing?

That's correct -- there is no contradiction here. A totally unregulated housing market would be an unmitigated disaster. And some regulations are certainly counter-productive (e.g. exclusionary zoning). The problem isn't "more regulation" or "less regulation" -- it's making affordable housing a priority and crafting policy that is consistent with that goal. The problem isn't that the people in charge are stupid and bad at economics, it's that landlords and developers (and to some extent, homeowners) have a tremendous amount of power and resist the political changes that need to occur in order for housing to become affordable.

Agreed, no regulations or over-the-top ridiculous regulations are both likely awful.

I also agree that "owners" are likely to try to influence politicians. However, "owners" intentions are probably relevant to the discussion. For instance, there may be existing owners who want to have zoning that prohibits new construction for multifamily units near their golf course. They would see a "developer" who wants to build multifamily units as "bad". Presumably, in this scenario many would support the "developer", ceteris paribus.

On the other hand, if the "owners" were in an area that was being gentrified and there were "developers" who wanted to construct luxury condos in the area (with similar density to the multifamily units discussed above), the "developers" would be "bad" and the "owners" would be the good guys to many.

Politics is inherently involved in both cases as you allude to in your response. The question is which politics is going to better resolve the "crisis" - it appears many will bet on politicians/government to resolve the "crisis". While most politicians can talk a great game, I haven't seen a lot of results from any of them from either party in any geography which tempers my confidence politicians have anything to do with a solution...

You're absolutely right that what most politically engaged people want is to preserve the status quo. So they will use increased social control over housing production the same way they're using existing social control over housing production: to minimize it. Existing NIMBY communities won't allow significant new housing. They're certainly not going to initiate and pay for it. The housing shortage is exactly the same thing as these people getting what they want, neighborhoods and communities that look and feel the same over time, excluding however many former/would-be residents they need to exclude for that to happen.

De-commodified housing gives a community more control over who gets to be a resident, but there's no reason it would lead to a change in how many. Expensive cities already have the levers for that.

Why does the housing need to be public?

Because housing is a vital human necessity, so much like healthcare, the price ceiling for it is effectively infinite, because almost no-one can reasonably opt-out of purchasing it. (And due to how it's financed, it's not even really capped by people's income, since all of society is built with the requirement that everyone spend more than they could afford, just to get basic essential housing)

Saying "new (for-profit rental) housing construction will fill the shortage" is like saying, "Yes, Nestle charges an obscene amount for our water, but if we just let Nestle pump more water from the ground, they'll voluntarily sell that water to us for less".

The bottled water market has exactly 0 things in common with the housing market.

Every city is growing and adding more people than new housing construction. Thus rents go up. Hm, wonder what the solution would be? If a landlord has a unit open for 2 months maybe they would drop the rent? Crazy idea.

Who's competing with Nestlé? If the answer is “no one,” why is that?

It doesn’t have to be totally public, just publicly provided supply with eventual private ownership, as is the case in Singapore. The problem is that the USA is a country (many cities/towns to live in, some more desirable than others), while Singapore is a city state.

The housing shortage is not a shortage overall. It is a shortage in areas where people want to live.

As shortage is defined as a situation where an external mechanism prevents price from rising, technically it's a shortage where rent control is present, as rent control is the external mechanism that prevents price form rising. Economically, where price may freely increase, the price will rise until demand wanes to the point that there is no more need for additional housing. Socially, that is a problem as in the case of housing we want everyone to have the opportunity to have housing, which is why we bring in rent control, which then create shortages.

Rent control does not do anything to limit new development. The law in california doesn't even apply to new builds.