Well, that one is pretty obvious. Landlords will charge the highest prices they can get away with.

The more interesting question is why landlords are supposedly entitled to all of the new wealth. After all they had no role in creating any of it.

At the root of the problem in your question is how does society determine who has a right to live where. Obviously, given the opportunity, most of the world would want to live with on the California coast or similar places.

Obviously, the most basic answer to the question I posed above is “might makes right”. But we have moved past a situation where fight someone to take their land, and instead have to buy it.

Yes, the current system is unfair for most people. Most people will never get a chance to live where they want, and most people are born without the chance in the first place. So why should society let those born to wealthy moms get the spoils?

There isn’t a good answer, other than a better alternative hasn’t been invented yet. But at least in the current scenario, a small percentage of people can move into the places they want, giving enough hope that people aren’t resorting to war. Or they are unable to.

You can assess land rent (there are methods to do this that are quite reliable) and tax away, say, 80% of it, thus leaving in place enough of a market in land that its ordinary function in facilitating exchanges is not impaired. It's quite easy in fact, the main problem is really getting there from here.

However, California has decided that "housing as investment" supersedes all else. It's not that there's no viable alternatives: this is by design.

I believe that certain cities have better ratios but I'm also inclined to think those places are just slightly earlier in the cycle.

I was responding to the claim that it's a state- or national-level problem. Perhaps you would argue that this meets some criteria for being a 'national-level' problem, but it's not obvious to me.

California state law is a big part of the problem: it gives individual cities way too much power to decide what gets built and what doesn't, severely restricting supply. For example, neighborhood associations can filibuster new development into nothingness, even for contradictory reasons like not having enough parking but also not being public-transport friendly enough. Additionally, California has wildly skewed tax law that disincentivizes people from moving or downsizing (look up Prop 13). Add in a lack of public transportation, zoning restrictions, and massive corporate subsidies and you've got a housing crisis brewing.

Also, Prop 13 inexplicably applies to commercial real estate, and inherited property.

Also the inherited property bit was a separate amendment. And there is no limit either.

And this isn't just a California thing.

"Home prices are rising at twice the wage of growth." https://www.curbed.com/2019/5/15/18617763/affordable-housing...

"Low-cost housing is disappearing from the market." https://www.huffpost.com/entry/housing-crisis-inequality-har...

You can find a lot of these articles around without much effort.