This ignores the inherent contradiction in current housing policy: housing cannot be both a good investment and affordable.

If housing is a good investment, that means it's appreciating faster than inflation, which will make it increasingly unaffordable as time passes.

If housing is affordable, and remains so, then it is not appreciating enough to make a good investment.

For decades, governments have made policies to make housing into a good investment. Things like government guarantees on mortgages to reduce the interest rate, mortgage interest deductions, property tax limits, and (yes) restricting the supply of housing through permits and zoning are all policies that serve to make housing a good investment, at the expense of affordability.

Houses can definitely be an investment and only increase with inflation. If I buy a house as an investment, I get rent every month. If the house appreciates 0%, it could still be a good investment if the rent is good enough returns.

Your premise only holds true if you buy a house and keep it empty, and are only getting returns by the appreciation of the property, but this should be illegal anyway.

It doesn't ignore the contradiction; it acknowledges it very early on in the article, in a paragraph dedicated to the point. "Would my net worth suffer if housing was affordable?" the paragraph opens. "Yes."

Yes, this is like a breath of fresh air. A lot of people think we have what seem to be intractable problems because a shadowy group is sobatoging The Popular Will. But the truth of the matter is we have intractable problems because there are tough trade offs, and having frank conversations about these trade offs is unpleasant, thus we focus on the Shadowy Group.

Yep. I’d rather we have political conversations that were frank about the trade offs and focused on material change.

An example: Medicare for all. Bottom 90% will save money, top 10% will lose money, healthcare system will be free at point of service and won’t be tied to employment. Doctors will still be rich but will make less money. Anyone invested in insurance industries will certainly lose here.

I’d argue that discussing policy in material terms is only unpleasant for the powerful, because they are a minority trying to convince the majority to vote against their interests. When it’s all laid out it’s clear where the majority’s interests lie.

You should be careful about the assumption that you've got this stuff all worked out and that there's a clear set of tradeoffs. There's a strong case to be made against M4A that has nothing to do with "the minority trying to convince the majority to vote against their interests". That sentiment has a name: it's called "populism". It's the opposite of reasoned consideration of policy.

You're confused about affordability with inflation vs. affordable house.

Sounds like your real question should be can anything is affordable in a hyper-inflation time.

Housing is anchored in inflation, no better or worse. Therefore housing built in with wealth as inflation doesn't hurt housing. By destroying wealth it doesn't make house affordable, only make worse hyper-inflation.

Come on, thought this is ecom 101. What do colleges teach these days?

Well they certainly haven't been teaching system dynamics.

The price of manufactured goods has dropped significantly, thanks to technological progress and offshoring. The Fed has a mandate that average consumer prices must always be going up. Housing is one of the few areas where the Fed can create monetary inflation that reaches consumers, since instead of giving away newly-created money it generally has to be in the form of loans. Therefore, the price of housing will shoot up to compensate for manufactured goods dropping. And the more efficient technology becomes, the worse the effect will be.

Why does the Fed has a mandate to make average consumer prices increase in the first place? What does the increase of CPI have to do anything with the growth of an economy? And why is the Fed including housing (which is not a consumer good) to calculate CPI?

Agree. I seem to remember RE being “on average” an inflation hedge. Though locality of course matters hugely. RE somewhere a lot of people want to be will be bid up. RE in the middle of nowhere can be built and sold pretty much at whatever it cost.

Owning and then selling a house should not be a good investment. What you do with it is supposed to make it a good investment. This idea that investing means squatting valuable assets needs to die. Save on rent, farm, rent to others, make a shop... preventing others who would put the land to better use is doing more harm than good.

Housing prices don't need to beat inflation to be a good investment. If I don't own, I pay rent. Rent will go up with inflation but my mortgage is a fixed cost. By paying a mortgage instead of rent I save money long term.

Since buying a house comes with a large opportunity cost it may not be the best investment even if it is a decent one.

Oh come on, that's assuming a 30 year mortgage with 5% interests and not taking into account inflation of rent.

Take into account rent inflation and use 2.5% interest rates and then we'll see...

> housing cannot be both a good investment and affordable

Yes it can, if you let people invest into development projects at the venture stage. (This carries inherent risk, of course, but not as much as you think.)

Is this currently illegal?

You can simultaneously make land a good investment and housing affordable by supporting infill densification.

Only for a while. Eventually density starts becoming just as expensive as land.

Housing is multiple markets even within narrow geographic bounds. We could produce a lot of apartments and they would be affordable, but a single family home a mile away may still gain value faster than inflation.

Making the ownership of a single family home affordable is in contradiction with making that a good investment vehicle.

It would be great if cryptocurrency moved people's irrational fetish for artificially scarce, low-risk, rapidly appreciating assets into the digital sphere. Then we could be rid of this curse in the real world, where it ruins lives and societies.

I've been looking at Singapore which is interesting with most people living in pseudo-public housing. The govt owns the apt buildings and people buy 99 year leases ( which you can sell).

The idea that you can't own land/space outright, just for 99 years actually makes a lot of sense. You get to live there for your whole life, you aren't buying some intra-generational asset that will get passed to your kids & grandchildren etc. As a result the condos are much cheaper.

I think we could do the same with land. You can't buy a yard or farm, you just buy a 99 year lease after which it returns to the city or state.

Completely disagree. If I buy a piece of land and spend to make improvements, I’d expect to sell at a price that justifies the investment or let my kids inherit my life’s work.

Land leases massively disincentivize making improvements to land or structures, because it’s not even yours. What a great way to ensure the quality of our neighborhoods goes down over time.

If the lease is sellable and for long enough term you still have incentive to make improvements.

Say you buy a 99 year lease and plan to live there 20 years. When you are ready to leave you are selling the remaining 79 years on the lease.

Your improvements should increase the price you get for the remainder of the lease.

While the remaining term on the lease is still long it is not much different than owning (except that you might not be allowed to do things that harm the value of the property).

As the remaining time on the lease goes down, it slowly shifts from being like owning (with similar incentives) to being like rental.

I'd guess that for at least the first half of the lease (in the case of a 99 year lease) and maybe even up to 70 years so so into it there is plenty of incentive still for leaseholders to improve the property.

So you end up with a property that goes through 3 phases. In phase 1 the people living there have incentives to improve it. Then in phase 2 they just have incentives to maintain it (except maybe the last leaseholder). Then in phase 3 the lease has ended and the property is back in the hands of whoever owns it.

Phase 3 is the most interesting one I think. Imagine a development that was all 99 year leases starting at about the same time. When the leases all end the land is all back under the control of one entity. In the 100 years since the development was built a lot might have changed, and there might be some other better use for that land. That entity can then use the land for that.

If the development instead had sold each lot instead of 99 year leasing them, then 100 years later when there is some better use for the land it might be much harder or even impossible to implement that.

The question then is which is overall better? People owning their homes means there is always an incentive to improve the land and buildings. Long term sellable leases means that there is only such an incentive part of the time, but in exchange for that whole neighborhoods periodically become open to redevelopment. That could lead to more overall improvement in the long run for a city as a whole.

I strongly oppose the existence of such an entity that has absolute control over land, especially if it’s a government.

If you want affordability, land value tax will incentivize appropriate development.

If you want to steal/take control over land arbitrarily from its users, land rent is a good choice.

In my opinion, if someone owns land and can afford the tax, leave them be. Let them keep their land rather giving it to an entity that supposedly knows better what to do with the land than the occupant.

All gov't has control over land via eminent domain, property taxation and regulation to the point of making land useless and the ability to seize your assets, which includes land.

If you say 'well I control the gov't via democracy'! Well you would control that same 99 yo gov't lease holder too about just as much.

> I strongly oppose the existence of such an entity that has absolute control over land > > In my opinion, if someone owns land and can afford the tax, leave them be.

The government is the thing that allows the concept of land ownership. Anyone trying to take ownership will have to go through courts with legislature written by that government. Even if they gunned their way into occupation, getting a court order to have the (often better-armed) police turn it back would be possible.

I see no way around having a central coordinating body drawing up guidelines to define ownership. The ground is a finite resource I don't think anyone should be able to hoard and occupy indefinitely. That coupled with me not liking wealth inequality leads me to think that the Singapore (and others) way of leases might be good in the long run.

> If I buy a piece of land

Why do you presuppose that land is something you should be able to buy outright?

It's your improvements on that land that you (should) rightfully own and be able to sell or pass on to future generations; those improvements are the result of your labor, after all (be it directly or indirectly). The land is not; it existed for millions (if not billions) of years before you, and barring a literal Earth-shattering catastrophe will exist for billions of years after you.

> Land leases massively disincentivize making improvements to land or structures, because it’s not even yours.

They do the precise opposite. If you're going to take up space, you should be using it for its maximum potential - and that's exactly what things like land leases or land value taxes incentivize (since it's pretty pointless to spend that money if you don't intend to develop it to its full potential).

There are various ways to make this work out, eg. let leaseholders sell improvements on the land to the next leaseholder at time of transfer, which would then factor into who's willing to lease the land next and how much they are willing to pay for it.

At that point it's probably easier administratively to say that you "own" the property and are paying a "land value tax" rather than a lease, but the principle is the same. The government receives the economic returns from the land being scarce, from its location, and from public works that increase its utility. The developer or property owner receives the economic returns from improvements they personally make to the property. What could be more fair?

Landowners should be paying a land value tax equivalent to the value of their property. That way local services are well-funded.

What I"m not ok with is a lease system where the stability of your family and descendants is put at risk if the government refuses to re-lease the property to you. Who knows how tyrannical the government will be in a 100 years.

Ownership is a stronger model. Your property can't easily be taken away by bureaucrats so long as you pay taxes on time.

> Landowners should be paying a land value tax equivalent to the value of their property. That way local services are well-funded.

Why is that a good way to fund local services? The costs to provide most services have nothing to do with the value of the property, so why should my neighbor pay more for them than I do just because their house is on a bigger lot?

The difference would be negligible unless the land is valuable enough that more improvements could be supported by local services and demand.

For example, if your home sits in a hot area where there is high demand for apartments, the home with the larger lot would pay more taxes because the potential for the lot is much higher.

Once the lot built to its potential, the tax per occupant would level to a fair cost per local government service used.

Of course, the owner can continue to pay a higher tax burden to use more of the lot for themselves. Because they own the lot, the government can’t force them to do anything else.

That’s how it should be. No government intervention / lease needed, just incentivize development by asking owners to pay an appropriate tax amount for the value of the space they occupy and let people make their own choices.

it's not so much the cost of providing services so much as what is driving the property value. in highly desirable locales, the value of a property is affected much more by what people are doing around you than any improvements you could make to a private dwelling.

or alternatively, you could consider it a tax on the opportunity cost of you having exclusive use of a piece of land. your neighbor with the bigger lot is not consuming (much) more services, but the opportunity cost of not building more stuff on that lot is proportionately higher.

A 1.01% property tax is financially equivalent to a 99 year lease, it's just that one is politically a lot more palatable in certain countries.

Not really equivalent in general, though.

You don't have to re-purchase after 100 years. There is no risk that the government refuses to re-lease the property to you.

That risk doesn't have to exist with land leases, either; it could very well (and in practice does) work exactly like LVT does (and indeed, at a 100% LVT, the difference between LVT v. a land lease is semantics) - i.e., with the current user of that land (i.e. the current LVT payer, or the current leaseholder) being in control of whether to keep paying LVT / renew the lease.

If your lease on your apartment expires, do you think you're not given first dibs on whether to renew the lease? Same deal here.

Your statement would be more compelling if it interesected with the person you responded to, maybe some evidence that the housing in Singapore responds in the way that you predict here. As it stands you're firmly in "old man yelling at cloud" territory with your predictions.

To be fair, you didn't provide counter evidence for your claim I'm a "yelling old man," either.

OK.

>If I buy a piece of land and spend to make improvements, I’d expect to sell at a price that justifies the investment or let my kids inherit my life’s work.

>Land leases massively disincentivize making improvements to land or structures, because it’s not even yours. What a great way to ensure the quality of our neighborhoods goes down over time.

There you go. Big statements about hypothetical expectations and pessimistic predictions for the future treated as though they were obvious, but really just re-statements of your own misgivings. Classic 'yelling old man'. You can hear dire predictions of that sort at any time now thanks to the internet. My favorite recent example was a round-a-bout coming to some rural area and the facebook announcement (?!) getting dire predictions of chaos and doom with the same sort of structure as the second example.

Ok, so you don’t have counter argument then. Good to know.

We're on this thread here to make housing more affordable, not to ensure your kids get your investment. Actually with a 99 year lease they probably will get it, just not your grandkids.

Property improvements on personal residences aren't a financial investment. They usually don't have a high, or even positive, rate of return. Rather, they're improvements to your home and your quality of life. They're also your kids' home, and could be their kids' home, and so on.

Government bureaucrats should not have free control over those improvements after 100 years. Making all land rentable clearly isn't about encouraging development and affordability; a land value tax could do that. Making all land only rentable is clearly a scheme to allow government to steal valuable land from the current owners who otherwise could afford the taxes and wouldn't sell.

Many NIMBYs don't even care about their home value (unless they've purchased recently and don't want to be underwater on their mortgage). If you actually talk to most homeowners, especially the long term ones, they care much more about the neighborhood and home they've built so hard to create. Seeing a life of memories razed for concrete and glass townhomes/towers isn't an easy pill for anyone to swallow.

All that said, we do need to upzone for affordability. But all of this talk of "we aren't protecting your investment" is misguided, that isn't what single family homeowners care about.

Buildings are actually a deprecating asset, even if you renovate them, outside of maybe some rare heritage art pieces or other similar rare things. The only reason why RE 'goes up' is the value of the land underneath. You can easily demonstrate this by two neighbor buildings on similar kinds of land with equal sqft, the newer building usually sells for significantly more than the older 50 yo one.

There are some exceptions (eg. older craftsman houses in Portland/Seattle seem to be appreciating as more of them are razed for higher density).

Craftsman homes are much more popular in those cities than any style besides possibly mid century modern.

I have had this same thought myself - a 99-year lease, with reversion at its end to the commonweal. I mean, who came up with the intellectually suspect idea that land can actually be owned ? Did some hairy sky thunderer mandate it ?

The Chinese are doing that, too. There it is limited to 70 years.

> So why do I make an exception in this case, favoring the state government’s nullification of local government rules?

I had this same reservation, but that is looking at it the wrong way. The US constitution's 1st amendment isn't central control, it is a human rights guarantee. Liberalizing restrictions on housing is likewise not central control, but shoring up property rights against local deprivation.

Japan had a housing crisis in the 1980s, but they pulled themselves out of it by massively liberalizing zoning and other restrictions on home construction, at the national level. Today families earning median incomes in Tokyo can afford to buy homes. That is something not true of San Francisco, New York, London Paris, etc.

https://archive.is/pVrex

A more appropriate title is something like "How to make housing more affordable in California." Housing is plenty-affordable in most of the country, even with the latest boom.

In almost any area with high demand, the prices are almost as high as California. The same zoning restrictions are everywhere.

CA's this weird place with an amazing climate and lots of high-paying jobs. You can look at a similarly booming place like Austin, and still find affordable housing within a 1 hour drive anywhere. Same with Chicago, Atlanta, Boston, Philadelphia... Even NYC has affordable housing within a 1 hour commute.

Where can you find affordable housing within 1 hour of Boston or New York? (That you can actually commute to those cities within an hour during normal working hours)

Most of the country is empty space.

I mean, the article gets at this at the end, but these days I don't think there is much disagreement in the root causes:

1. Yes, if you want more affordable housing, you need to make it much easier to build homes.

2. The root cause of current housing crises, though, is that once any individual buys a home in an area, they immediately then have a strong economic incentive to make building new homes as difficult as possible (assuming they already live in a built-up area).

So the question is how you fix number 2, because in virtually any area home owners will have outsized political power. So the article talks about this somewhat at the end: removing local control over housing policy and giving more of that power to the state, which I agree is one way to address the issue.

But I still think the fundamental problem that needs more attention is how do you adjust (or nullify) incentives so that existing homeowners are prevented from making the house permitting process more difficult for everyone else.

Regarding number 2, I can’t help but notice the inflection point of homeowner equity is ~1965, right in between the 1964 and 1968 civil rights statutes. Smells like “segregation with extra steps” to me: https://fred.stlouisfed.org/series/OEHRENWBSHNO

To the crowd at large: I would love to learn more about what exactly changed during this time period to change peoples’ incentives on such a massive scale. Was there some change in law/regulations to make housing a “safer” investment for people, besides just tanking the interest rates for other types of investments like is all over the news these days? Links or hints would be very appreciated :)

I’d also say homeowner economic incentives don’t even cover it. You buy into a community as it is — that’s what you saw the benefit of investing in not only economically but socially and in terms of years of your life. You may well be particular about its social, architectural, and natural features and resist change to them.

If that’s true, then affordable housing pushes that address individual incentives also need to address incentives around “social equity.”

You don't need to make it so that homeowners are prevented from making the permitting process more difficult, you need to change the incentives so that homeowners do not gain from doing so. I can assure you, if you don't address the disease a new symptom will pop up.

The problem is that whenever you build a new park, a new store, provide jobs, you have a positive externality in your neighborhood that is not captured solely by yourself. When someone who owns a parking lot and does nothing to earn that value gets richer, he goes out and buys more parking lots. He's taking your positive externalities.

We've already figured out the fundamental solution. Henry George worked all of this out 100 years ago.

If property taxes were raised to 100% annually of the cost of the home, the price of the house would instantly drop to somewhere near the annual rent cost. "Buying" the house would end up being close to a security deposit. It goes without saying though, that 100% annually is not a good number. It would disincentivize building, which is something we really need right now.

The right number is a Land Value Tax such that the cost of the property equals the cost of the building. So if you have two properties, one in downtown SF, and one in the middle of Montana, and each are the exact same house, but the Montana house sells for $200k and the SF house sells for $1M, really it's the land in SF selling for $800k. So that SF market price should move to $200k. To do so we need to tax the property at increasing rates(per sqft of land) until they match. When we tax enough, the new price will reach its improvement value.

In the short term this will have devastating effects on the Net Worth of individuals who took out loans or otherwise bet their income on owning a home, so I advocate for a one time tax credit(that for exceptional cases like the elderly would be transferable for straight cash upon sale of the property) equivalent to the drop in market value of the home. So in the SF case, they would get a $800k tax credit.

Once this system is in place being a NIMBY will no longer be a profitable stance, and will instead cost that area money in taxes. As it will no longer be a perverse incentive, the population will mostly switch to becoming YIMBY's, and advocate for better Zoning rules and to ease up on silly restrictions. The tax money can be spent on high value improvements to the area that will boost everyone's quality of life, and if none are found, can be simply given back equally to all.

Once this system in place and the tax credits have been used up, we can even go further and get rid of income taxes, sales taxes, corporate taxes, and capital gains taxes. The value of the land tax will be enough to replace all of them(by removing them, the land values will rise, which means the land taxes will rise). All from a tax that because land is at a fixed supply, is completely non-distortionary and results in no dead weight loss.

Housing can either be an investment or affordable long-term, it can not be both.

The proposal here - eliminate restrictions on building housing - is a good one, but only addresses half of the problem. The other half of the problem is highlighted here:

> Many people believe that the main reason housing is expensive in coastal California is that land is so scarce. As the saying goes, “They’re not making any more land.” That view is plausible. It’s also incorrect.

Turns out this take is itself incorrect. Land is scarce (more precisely, it has inelastic supply), and the reasoning for deeming the scarcity argument to be "incorrect" - that land permitted for building sells for a higher price than land not permitted for building - only demonstrates that some land is being artificially suppressed in value due to zoning restrictions, and says nothing about land scarcity's actual contribution to housing costs. It doesn't take a top-notch economist to figure out that if two identical houses on identically-sized plots in SF and Bakersfield go for $1m and $250k, respectively, the only remaining variable there is the demand for that land relative to its supply.

For this reason, the other half of the solution is to pair that eradication of zoning restrictions with a reworked property tax structure that incentivizes denser construction and penalizes hoarding empty/underdeveloped land (or otherwise treating land as a speculative asset).

Such a concept happens to have a name: a land value tax.

Replacing traditional property taxes with LVT (and, ideally, replacing other taxes like income and sales taxes with LVT, too, but non-land property taxes are the relevant one in this context) and loosening zoning restrictions both complement one another and together disincentivize the land-speculation-driven NIMBYism that dominates the current housing cost spiral in places like California.

Seattle had rent inflation at 7% a year. See if you can tell on this chart when they passed the law allowing higher density on some single-family lots

https://fred.stlouisfed.org/graph/fredgraph.png?g=H4YO

I'm curious which law you speak of. From the chart, it looks like something happened in 2018, but when I googled [seattle higher density on sfh lots] or [seattle single family upzone], I only got articles from this year saying that such legislation was being considered.

MHA passed late 2017. Upzoned 27 neighborhoods

Agreed. Just start looking in the Bay Area and you’ll see lots of parcels (either under-utilized or entirely empty) of various sizes that could be used for an apartment or house. It’s nice to see the apartments being built along El Camino now, and a lot more could be done.

Has anyone suggested reducing the amount of credit available? That won't increase the number of houses, but people compete on how much they can pay, and if they can pay less houses will cost less.

That would make homes cheaper, but not more affordable. Since the money to buy homes becomes more expensive you end up with about the same monthly cost.

So which is it, are homes more expensive now or not?

Interest rates have gone from 10% to 2.5% and housing prices went up - it’s the same thing

I think we need to change our attitude towards money.

People hurt each other without intending or realizing it, because it's hidden behind this abstraction called "money".

Vienna is doing a nice job, building new "old town" areas with 75% affordable units.

[Bloomberg] Vienna's Radical Idea? Affordable Housing For All https://www.youtube.com/watch?v=41VJudBdYXY

It will be interesting to see what the recent legislation will do to California housing prices. I'm not entirely sure if there are enough large lots to sustain multiplexes on them. But even if people start building duplexes, it may help ease the lack of inventory.

I haven’t seen it mentioned, but does the recent legislation override HOA contracts? Not sure about CA, but most homes built since the mid-70s near DC have HOAs of some sort.

I have seen developments in Virginia, in the middle of nowhere or along important highways, with houses built in clusters. I did not realize they all had HOAs.

I do not know the details of the legislation, but it is my understanding that the owner of a lot can raze the house and seek permits to put up up to four houses, depending on lot size. And the permit process will be on an 'as-of-right' basis, i.e., your neighbors can't block you with the CEQA nonsense: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml...

Here is the relevant excerpt:

The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment. CEQA does not apply to the approval of ministerial projects.

This bill, by establishing the ministerial review processes described above, would thereby exempt the approval of projects subject to those processes from CEQA.

This article presents no new insight into how you get existing (voting!) property owners to accept depreciation of their assets. My greatest hope for a technological solution is self driving cars which would reduce the duration and significance of travel times.

That's not a fix, though. Reducing the pain of a commute would mean more people would move out to the suburbs, which would grow, which would add to the traffic.

People are apparently willing to drive 1 hour each way in a normal car, which is a huge pain. I would assume they'd therefore be willing to be driven even further in a self-driving car. You'd end up with an equally unpleasant equilibrium.

I agree that people would be willing to put up with a longer commute in a self-driving car. This should have the effect of increasing home construction in the exburbs and lowering average housing costs overall.

The value in land is just a proxy for a configuration of people. You move the people, you move the value.

Nice to see a fresh perspective.

High density appears to create fragility. People were fleeing from cities during covid.

Tiny pools of high-priced, high-density studios and single bedrooms in a country where restaurants are forced to close for years now? Yeah, rents dropped maybe 20% for a year.

Widespread, affordable, high-density 3- & 4-bedroom units in South Korea where people will wear masks? Still occupied.

Um, you might want to erase the “affordable” in your last sentence. South Korea also has a pretty serious housing bubble issue right now, it is really hard for a newly married couple to get a Jeonse [1] on an apartment in Seoul (unless your parents are rich).

And you really need to be careful when comparing South Korea’s housing market with other countries. It has its own unique properties that would probably make no sense at all to outsiders at first glance.

[1] https://en.wikipedia.org/wiki/Jeonse

It seems the whole world is getting worse in that regard...

True, but an epidemic like COVID is generally a once in a lifetime (or less) occurrence. Probably best not to allow it to drive housing policy.

> Would my net worth suffer if governments allowed more housing? Absolutely.

This is the crux of the issue, not because it’s true, but because people believe it’s the case.

The value of the house itself would fall, but the value of the land would still increase with more flexibility in how it’s used. An 1800 sf home is never going to be worth $5 million. At some point, people will make other sacrifices to not have to pay that.

But I imagine that same lot could support a 10 unit building (just guessing). At $500k each, that property is now worth $5 mil, and each unit is comparatively affordable.

Even if the property owner doesn’t turn it into a 10 unit complex, others that do would cause nearby single family lots worth more since they could be converted, or kept for a super rich guy.

An underrated aspect is that most California leftists refuse to believe free market capitalism can solve the problem, regardless of the evidence. I think there are fewer people who are just protecting their property values than we think. We need to start talking about the issue with that in mind if we want things to change.

>An 1800 sf home is never going to be worth $5 million.

https://www.zillow.com/homedetails/181-Fremont-St-UNIT-58A-S...

It’s so strange everyone makes this out to be a complicated problem. We just need to build more.

Part of the complication is the dynamic nature. Truly affordable housing is older housing, but older housing never comes available if it is never built in the first place.

Not really, the median house price for the US is quite cheap. Perhaps the other solution is get jobs to the places that have cheap housing. Remote work helps.

Outside of California, it is obvious. Inside of California, they have Stockholm syndrome from over 50 years of trying heavy handed approaches that do not work.

If you were to put a 'food czar' in control of feeding everyone, it would never occur to said czar to just let businsess willy nilly put restaurants wherever they thought they could make a buck. It couldn't be that simple.

Build more what? Where? How?

I used to work in a 5-storey office building in Sunnyvale, CA (special permission required to build it). I could look out the window and see 10 miles in every direction. It was a vast sea of aging 60s bungalows. Also the most expensive place to live in the US. All my coworkers commuted for hours every day from the distant suburbs.

You ask what we should be building, and where? How about replacing old single-family homes in the Bay Area or Los Angeles with high-rises, or at least mid-rises...or at the very least town houses or something!

Housing. On land. With our hands. Unfortunately, the single greatest hurdle is bureacracy which requires layers upon layers of paperwork to build a single thing. On top of that, the taxes don’t help pricing the asset either. Nor do the additional 1000s of pages of regulations that prevent laypeople from making money on that housing.

It's now required nearly every electrical breaker be AFCI @$50/ea instead of $5/ea. Extra $900 right there. Multiply that by all the other bullshit...

The only free land is far away. This is a huge problem in itself.

Housing. On SFBA real estate. By drastically increasing the number of permits issued.

Houses, apartment buildings, government housing. Everywhere that has high housing demand with square footage prices far exceeding the national average. Reduce the governmental burdens to building new housing such as easing impact studies, reducing the influence of local zoning boards, and cutting unnecessary red tape (I don’t mean go to 0 government rules but we have a severely onerous amount now especially in the most popular places).

Houses. Everywhere. Using labor.

High-rise apartments, ideally.

Exactly!

Exactly, just look at NYC and see how cheap apartments get once you build more.

Wait.

Prevent corporations, non-citizens, from buying up realestate could be a start.

Heavily taxing the third piece of realeste one adult buys. (A guy buys a home, and a getaway pad, fine. Tax the third property a lot to avoid homes being being accumulated.)

Put a unoccupied tax on vacant realestate too.

You seem to believe that vacancy rates are high enough that we could make a dent in the problem by trying to lower them. Is there any evidence of that? None that I know of.

These suggestions seem unlikely to accomplish much, and they seem driven by a assumption that inequality and greed of the wealthy is the problem rather than local government red tape and NIMBYs holding back construction.

More supply reduces prices. Econ 101. It is strange how many people seem to think Econ 101 somehow doesn't apply to housing.

In my city, Vancouver, there were something like 100,000 empty homes maybe 5 years ago. More than enough vacant homes to house the entire homeless population a few times over. Now, do market forces work well enough that filling those homes pushes the cost of housing down low enough that those people can afford a home? Idk. We put in an empty home tax a couple years ago, but I don't think the dust has settled on if it has succeeded in filling those homes. If it has, it certainly hasn't resulted in noticeably lower housing costs for anyone yet.

Vancouver isn't trying nearly hard enough. Housing is much more affordable in places where supply is allowed to grow without government interference. Unfortunately there are very few such places, but states that are more free to build in, like Texas, are much more affordable and people have been migrating for the low prices.

Speculative hoarding of the scarce resource of housing can lead to houses sitting empty, but speculation would be pointless if the resource weren't artificially constrained to be scarce.

> Housing is much more affordable in places where supply is allowed to grow without government interference

I just don't believe this. I'm sorry. The difference between texas (which part, for one thing) and vancouver isn't down to real estate regulation. There are plenty of places in BC where you can buy a home for texas prices, and real estate regulation isn't that different city to city.

I don't understand. The world is complicated, but some things are simple. Gravity makes things fall. Increasing supply reduces price. How is this a dubious idea?

If developers are getting rich off building more, that means housing is crazy scarce, so scarce that people will fill the pockets of anyone who builds it. That means you need to build

Way

More

Housing.

Econ 101.

If you give a starving person a carrot and they were still starving after eating it, would you say that feeding has failed? Quantity matters! A lot!

One of the disconnects here is that the demand is not uniform. There is demand on housing from people who live here and want to continue to live here. There is also demand on housing from people who want to invest and make money. I believe that the second category has actually been the major driving force of housing prices. Yes one thing we could do is bulldoze the city and build thousands of condo-towers, and maybe we'd drown the demand from investors and actually succeed in bringing down the prices. Or maybe we could just kneecap housing investors, and not have to terraform our city into a dystopian hellscape to please the market.

You saying that new construction condo towers being a "dystopian hellscape" is quite telling.

"I'm not a NIMBY, I just want to preserve our neighborhood character" - 100% of NIMBYs

I don’t need to defend my non nimby credentials here, but to be clear i said “hellscape” because i lived in condos for about ten years and 500-1200sqft on the 20th floor is just not a place most people can raise a family and build a full life.

Nobody said condos had to be 1200 sqft or walls & floors without sound isolation ;)

You're making the mistake of thinking that home owners and investors are distinct groups of people. The overlap between the two is huge.

I still think supply would help without bulldozing the city, but increasing property taxes would also help. I'm a bit of a Georgian anyway.

If there were 500 million homes in the US and all 500 million were owned by one corporation who rented them out to the population, would you say the solution is:

A. Build more houses (and cross your fingers that the corporation doesn’t snatch those up too)

B. Criminalize renting to some degree

If the corporation is making that much money from its renting monopoly then the developer should just keep the property it builds and rent it out. If five developers do this, you'll start to see price competition and prices will go down. The rich hoarders and speculators will get screwed badly. As they should be.

Except... they will beg the government to do something, tell some heart-rending narrative about those nasty rich developers, the government will do something, and they'll get to stay rich.

I may see a different villain here than you do.

I don’t think you’re wrong that there’s a solution that the free market would provide (maybe not yours but I’m a believer in the invisible hand). However, that’s no good for preventing another situation like this in the long-run and there’s no benefit to allowing renting other than destroying the environment and shifting some bank account numbers. This is all separate from high-efficiency renting (i.e. apartments) because that uses the land well.

What are you talking about? You just described a situation that has never happened. Nothing remotely like it has ever happened in a free market country. And now we need to prevent "another" situation like this in the long run? I'm so confused.

That’s exactly what’s happening now: housing prices have exploded and corporations are choosing to rent inventory out instead, especially via AirBNB because that makes them more money. Chinese foreigners are snapping up properties at high rates. Zillow buys out entire areas now to raise prices.

Meanwhile the American citizenry with humble dreams of one day owning a house feels their dreams drift farther and farther out because some people won’t acknowledge that there’s even a problem. Others want to reward these corporations by building more inventory.

That's quite different from the hypothetical earlier, because you're now describing multiple owners rather than a single monopoly.

If a single corporation owns all homes, they can artificially limit supply by buying up any new properties and leaving them empty.

If multiple companies own all homes, then they can try to artificially limit supply by buying up any new properties and leaving them empty, but there's huge incentive for each one not to: if it rents out every property it buys, it makes even more money than if it left any of them empty. It's the prisoner's dilemma - if all companies collude and limit supply they maximize total profit, but if any individual company "cheats" it stands to gain even more for itself.

It is possible for cartels to collude and pull this off (OPEC etc), but it's not possible when there are thousands and thousands of companies and many of them are too small to "take one for the team" and leave a property empty, or too disinterested in any collusion.

Increasing supply reduces prices, hurts speculators, and makes things more affordable. This is Econ 101. There is no reason to think housing is an exception. But it sure does serve the interests of NIMBYs to pretend as if it is an exception. Are you a NIMBY?

I can see why you might think that but no, I’m not. I don’t think unnecessary housing should be built because it damages the environment and wastes usable space for no gain. Likewise, I don’t like cryptocurrency mining much for the same reason. I find it silly to build more housing simply for rent-seekers to line their pockets at the cost of the environment.

Mine’s an environmental concern. NIMBYs are just trying to protect their housing investments.

Maybe more housing seems like an "unnecessary" environmental problem to you because you have what you need? Many lower-income people would benefit from affordable housing.

Your concern is actually pretty common among the affluent homeowners who prevent development. Probably the second most common concern behind "neighborhood character", which is really just another type of environmental concern (city environment). Very few NIMBYs are purely after money.

"Housing defies economic laws and is terrible for the natural and/or city environment" is the prevailing opinion of NIMBYs today, based on the discussions I've been in.

You know what else lower-income people would benefit from? Increased housing supply by banning house renting. You know what lower-income people wouldn’t benefit from? Preserving the status quo solely so that rent-seeking landlords can keep their investments.

It seems like you’re on the side of the upper-class trying to trade the environment to prop up their investments. This is just like BTC scammers trying to trade the environment for their investments.

That would make sense if BTC investors made money by increasing supply. But they don't. The entire value proposition of BTC is its absolutely fixed, limited maximum supply. Again, Econ 101.

So no, if one side of this is more like BTC scammers, it isn't mine. It is the guarantee of scarcity that underwrites the entire BTC enterprise, even for the miners who are today wasting electricity on generating more of them.

Renting has absolutely nothing with our housing problems. There are majority-renter housing markets that have nowhere near the affordability problems we have. Supply is far more important than who has the deed.

If you want rich developers to make less money, unleashing supply is the way to do that. Automakers and grocery stores have relatively low profit margins because there are no government-imposed supply constraints on them.

Frankly, though, I think it's more admirable to help the poor than merely make a doomed attempt to punish the rich.

Alright, let’s agree to disagree on whether or not supply should be increased.

Would you at least agree in a hypothetical US in which it is not possible to build further supply that banning renters would be the next logical step? Again, this is not to say or not say that supply should not be further built.

I don't see the argument? Some people like renting. Landlord profit margins mostly depend on supply and demand, just like home prices do. Enough supply will bring their margins down to grocery store levels, and renters won't be at much of a disadvantage compared to owners.

Owning means saving a lot of money and accepting a lot of price risk and transaction costs. I own a house and like it, but I know for a fact that it's not for everyone.

If there was one monopolist landlord who charged through the nose, that could be a problem, but I don't know of any housing markets like that. Landlords keep raising their prices because demand outpaces supply and they can get away with it.

Monopolies have never happened in the US? Tell that to Standard Oil.

So because there was an oil monopoly around 1900, we need to prevent a "similar" housing monopoly in 2021? No, I stand by my post. Nothing remotely like the situation you describe has ever happened.

It is not the case that, because an oil monopoly happened in 1900, we need to be hypervigilant to hypothetical monopolies in other industries where nothing remotely like that has ever happened.

Before the rise of the Chicago school approach to antitrust, government regularly took action to prevent monopolization. Oddly enough, the size of the world's largest corporations has been skyrocketing in that same period. So yes - we should be hypervigilant to hypothetical monopolies in every industry - especially when we have governments decidedly uninterested in preventing them.

https://en.wikipedia.org/wiki/United_States_antitrust_law#Ri...

Okay, you want to talk about monopoly. You don't want to talk about housing. Fine, whatever. But don't pretend your ideas have anything to do with actually helping the cause of affordable housing.

>B. Criminalize renting to some degree

You mean anti monopoly laws? Let them pay monopoly taxes if their market share is bigger than 50% in any given city.

The vacancy rate there is 2.6%, according to the CMHC, which is quite low. That rate is generally considered a housing crisis.

Assuming that's metro vancouver (not greater vancouver), with a population of 631k, 2.6% would be 16,000 empty homes. The "we just need to let developers build more houses" people should take a long think on what 16k vacant homes is doing to the market.

That’s just not how housing works. A unit of housing has to be vacant between residents to be repaired, and periodically updated. Leasing a full building often takes a full year. People have existing leases and mortgages. At time you may have a mismatch between types and locations of units and what people looking for housing need. There are all kinds of reasons a unit can be temporarily empty.

The 16k units you’re citing won’t stay empty for long, but other units in the system will go temporarily unfilled. This is necessary for a functional housing market. In order for prices to decline you need a vacancy rate of more than 5%. Prices will continue to rise even at 4% vacancy.

The economics here are well studied and well established. Housing economists broadly agree.

If there’s anything that markers are great at doing, it’s producing lots of stuff at decreasing marginal cost. Housing is no different.

Yep, there's a natural rate of unemployment and a natural rate of housing vacancy. No surprises here. No One Weird Tricks to make housing affordable. Just good old supply and demand.

Your math is wrong. It’s 2.6% of total properties, not 2.6% of total population.

How many vacant homes is the right number? If there are very few vacant homes, then every time someone needs to move homes, they have to be shuffling homes with someone else. That's not efficient or tenable.

I remember reading that basically people were paying 500 / month to live in mansions as a way for homeowners to avoid paying the vacancy tax

> and they seem driven by a assumption that inequality and greed of the wealthy is the problem rather than local government red tape and NIMBYs holding back construction.

Not only is said assumption pretty dang reasonable, but the former is outright the cause of the latter (specifically: rich landowners lobbying local and state governments to hinder development and shift tax burdens onto literally anything other than the land value they're hoarding).

There are NIMBYs elsewhere in this comment tree telling me that evil rich developers lobby to have zoning relaxed so they can destroy the city with their horrible high-rises. So which is it? Which class of evil rich person controls everything?

Or is it possible that the YIMBY progressives who actually watch this issue in their local communities are right, and the biggest problem is NIMBYs vetoing everything to protect their "neighborhood character" and "the environment"?

NIMBYs hold a lot of power in local governments. They may be almost the only ones to turn out in many local elections and referendums.

This makes home ownership more affordable. Anyone want to rent? Well, your market just got a lot smaller.

Well I guess the question should be: how many people are being forced to rent when they'd prefer to buy an house?

Quite a few, I'd guess.

Landlords don't provide housing, construction workers do. Build houses, let people own them. For every 1 person who buys a vacation property, there'll likely be 10 who buy a second rental income property anyway, so I doubt that this would actually make renting that difficult.

Hm, I get your point but you've never wanted to live somewhere for just a few years? Renting is great for many circumstances. Huge transaction fees and risks related to owning are not great if you're not looking to settle down longer-term. The idea this need is covered by a bunch of people owning just one property seems stretched. What is truly wrong with meeting a need more efficiently?

I feel pretty confidant that the ability to move somewhere for a couple years would be safe. Rental markets can be handled by multi-tenant housing (suites and laneway houses), shared living spaces, socialized student housing, and private second home rentals, and of course just buying a house for a couple years...

> Huge transaction fees and risks related to owning

When houses cost millions, yes this is true. But if we got house prices down to an actually affordable level, this would not be such a concern. If I decided today to move to winnipeg for a couple years, houses are so cheap (at least compared to what I'm used to) that I'd strongly consider just buying a house or a condo for the time I was there.

None of those fix the root causes of the problem.

Root causes: - zoning restrictions - parking minimums (also perhaps a subcategory of zoning)

These appear at odds with one another.

A large percentage of landlords own a very small number of units each. Many get into this to finance retirement, etc. Taxing this way of life would likely just make less units available for rent, and reduce the number of people in the market for properties, which would reduce the effective demand for housing.

Banning corporations? The smart thing to do when buying a house is to set up a corporation to own the property. The very wealthy will always be able to achieve the sorts of protections this provides - why keep others from it?

Has this worked anywhere in the world? As far as I know, it never works. The problem is not solved by restricting demand (there is always a way around restrictions), but it is solved by adding supply.

Or just institute a land value tax, which would automatically penalize all those housing-cost-driving behaviors plus a bunch more (like owning a single-family home or a parking lot in the middle of Downtown) without needing a bunch of loophole-prone narrow ad-hoc taxes on each individual situation.

> Prevent corporations, ..., from buying up realestate could be a start.

What does that mean? That no apartment complexes can ever be built? Just checking I'm understanding you're suggestion.

They can build, but still be banned from buying. Can you see the difference??

Can only buy if they are going to knock down and build bigger. Application needs to be approved.

Would you please not break the site guidelines by going on about downvotes like this? As they say, it does no good and makes for boring reading.

https://news.ycombinator.com/newsguidelines.html

Libertarian organization delivers libertarian hot-take. No surprise there. It's tempting to believe! We all know the old story of the "law" of supply and demand. And there may be specific places where there is actually too much blocking new construction. Where I live, Vancouver, we have plenty of new construction - and have been pretty developer friendly for decades now. The problems I've seen with it are 1. it doesn't bring down prices and 2. all that gets built are luxury homes for the rich and condos for everyone else. Meanwhile developers and investors have gotten very rich off it. As a recent-ish example, the olympic village development sat mostly empty for YEARS, held by investors. There was no noticeable dip in prices when that development came online.

Long story short - yeah, we need to build more homes - but not using laissez-faire capitalism. As far as I can see in my lifetime that hasn't worked. Large scale socialized row-housing developments are what I'd like to see tried next.

You really don't have that much construction in Vancouver. There's a ton downtown, and in spots here and there, but most of Vancouver proper is single-family dwellings. You complain about condos, but houses with yards are incompatible with dense cities and low housing prices. Just the cost of land for a house is over a million, there's no point building a middle-class house on it--they couldn't afford it anyway. So you build condos, apartments, or a luxury home.

And renter protections and limitations on rent increases are fairly strict in BC, which discourages the building of apartments. If you dropped the rent control, developers would be more likely to build apartments, with the possible result that rent might go down.

And having said that, rents are actually pretty low in Vancouver. When I moved down to Seattle from there, my rent went way up, in spite of the fact that housing was way more expensive in Vancouver at the time (2011). Last time I checked, that remained true: rent for a fancy downtown 2-br apartment in Vancouver was about $2k Canadian, equivalent in Seattle was over $2.5k USD.

Look to Tokyo for a city that eliminated zoning and rent controls, and is surprisingly affordable for a huge international city. You'll never see it on a cost-of-living list with Vancouver, New York, Paris, Sydney, etc.

> houses with yards are incompatible with dense cities and low housing prices

Ever been out east? Row housing is dense, but has a yard and is suitable for families in a way that a condo can never be.

> If you dropped the rent control, developers would be more likely to build apartments, with the possible result that rent might go down.

We're BARELY rent controlled. Kick your tenant out and find a new one, boom you can double the rent. Technically illegal, but done constantly. If you really want to make it legit you can do a minor reno.

> rents are actually pretty low in Vancouver

Unfortunately I can't live in Seattle, and that seems like a disingenuous apples-to-oranges comparison. Because of the border/citizenship issue, those are separate markets. https://bc.ctvnews.ca/vancouver-s-rental-rates-are-the-highe...

Yes, town houses aka row houses are much better than traditional picket-fence houses. Also, though, cities in the east have far better public transit systems. Vancouver does well for the west coast, but it's system is dwarfed by those in New York or Chicago. And North Americans have firmly decided against public transit.

My understanding is that it's fantastically hard to evict a tenant in BC. I've heard stories of landlords taking a year to evict a tenant who wasn't even paying his rent anymore, and destroying the apartment in the process. Though I guess most people will leave when asked. And from what I remember, annual rent increases are capped at 4% or something? The first 3 years I lived in Seattle, my rent went up 50%.

Basically, though, rents aren't bad in Vancouver, and that's the most critical aspect of housing. People can afford to live there. The situation could be easily improved, especially regarding housing ownership...by encouraging more building.

If we’re doing anecdotes, I had a neighbor evicted about six years ago. He was carving things into the walls. I can't recall an exact timeline but i think it took under two months to evict him. I’d be worried if it took less time.

> Basically, though, rents aren't bad in Vancouver

Your argument seems to be “it’s worse elsewhere so quit complaining. I’ll remind you, this is the least affordable rental city in canada.

As I pointed out elsewhere in the thread, you have a vacancy rate in Vancouver of 2.6%, which is considered a deep housing supply crisis.

Row homes aren’t very land efficient and there aren’t any cities in the US or Canada where it would be financially feasible for governments to buy up enough land around cities to build enough row homes to meet demand. People who propose things like this never seem to remember that western governments can’t just take land from people who own it.

> western governments can’t just take land from people who own it

https://en.wikipedia.org/wiki/Eminent_domain

> Row homes aren’t very land efficient

But a lot more so than single-family homes.

Eminent domain requires reimbursement, and is horrendously unpopular. Trying to scoop up land from middle class people around cities in the West isn’t politically feasible. Those people vote.

There’s no politically realistic future where governments could build enough row homes to house the poor in places where there is economic opportunity. The land is too expensive, and trying to wrench it away by force of law would die in the courts or the ballot booth. This is a hopelessly utopian idea.

Markets are great at producing lots of cheap stuff, we could let housing work the same way.

> There’s no politically realistic future where governments could build enough row homes to house the poor in places where there is economic opportunity

Some politically realistic futures where this kind of thing had widespread support:

https://en.wikipedia.org/wiki/Cuban_Revolution https://en.wikipedia.org/wiki/October_Revolution https://en.wikipedia.org/wiki/Chinese_Communist_Revolution

> This is a hopelessly utopian idea

I'd argue that "let's keep doing markets despite the suffering we see around us" is a hopelessly dystopian idea, but...

I wouldn’t say the Cuban or Chinese revolutions have provided great housing solutions. Not to mention the wanton slaughter of the Russian and Chinese civil wars which killed millions of innocent people.

No one is saying let’s keep doing markets”. The article and many posts like mine are arguing that building new and more dense housing has been illegal in most of the US for decades, which has lead to a housing shortage. We should make it legal to build more housing, so that the market can build more housing.

I’m not wholly opposed to some public housing, but it needs to be carefully financed and well maintained.

My point was that the political will to make large swaths of land public has existed in the past, and if people keep getting more and more desperate it'll happen again, hopefully not violently.

But ok back to your point: so market capitalism works - but in housing we haven't had markets because of gov interference. So what's an area where we have a free unconstrained market for a basic human necessity, that doesn't cause deep deep suffering?

Food, water, housing, heathcare, safety - these are things that when solved by "the market" necessarily exclude a small but significant portion of people. Market capitalism is the wrong tool for basic needs. Prove me wrong ;)

We reached max depth. But with respect to food and water, no one in any market economy dies down f hunger or thirst. During the last century every famine was in a war zone or command economy. We produce so much food now that we’re making ourselves sick from eating too much.

There are certainly issues in places with access to fresh food and we need to better maintain plumbing in some cities. Those are more complicated issues though and involve culture and government.

We don't have a free market for food in the US or Canada. Very few people outright starve here, but that's largely due to food banks, food stamps, other government or charitably funded non-market forces that prevent starvation.

> 45 million Americans rely on stipends from the Supplemental Nutrition Assistance Program (SNAP) to buy food each month

Yes, we have a lot of food here, but in a pure market, without money you don't get any of it.

Water is almost 100% public.

Yeah It’s clearly more complicated than just a textbook market.

Haven't built enough. You need to build so much that developers are going bankrupt because they can't sell their homes. That's the point where prices come down.

I think most people in the "we built, but prices didn't come down" underestimate the scale of the problem. The (Canadian) population of peak homebuying age (20-40) exceeds the population of peak die-off age (65-85) by about 6 million. If people are still coupling up (not a guarantee these days of later marriage), that's about 3 million homes needed. Vancouver is about 5% of the population of Canada, so assuming no migration to the cities (also not true), that's about 150,000 new housing units. How many were actually built in 2020? 8000.

The city basically needs to get bigger by about 50%, and this needs to be repeated across most of the hot cities in the developed world. What would that even look like? Vancouver, Seattle, Portland, and the Bay Area are basically land-constrained; for them to grow 50% bigger over a decade, you either need a lot of highrises, or every SFH needs to be converted to a duplex.

BC has added three times as many people as housing units in the last decade. So there definitely has not been plenty of new housing built.

> Where I live, Vancouver, we have plenty of new construction - and have been pretty developer friendly for decades now.

Developer friendly maybe by comparisons to other place. But probably enormous by absolut value anyway. As an anecdote, I just googled custruction regulation in BC. So to just get access the build code, it costs 140$ dollars :).

I'm tempted to believe as in most western countries, there is an enormous amount of regulation permiating ever tiny aspect of construction process: from zoning, labor regulations, to enviromental restriction etc.. Not saying this is not needed, just pointing out that for many it might be a blind spot since all this regulation is taken foregranted...

Why do you think it does not work? And what would you do instead?

End real estate purchased for investment, rather than housing. Socialized row housing.

This is essentially an argument that well-educated professional class "socialists" use to justify the protection of their own home values while paying lip service to a housing fix that clearly will not happen. It envisions two kinds of residents: those who will compete up the the cost of houses, and those who will be placed in state-run housing.

If state run housing was available I'd love to live there. Yes, it's possible that one implementation of this would be a two-tier housing market - that would be bad. But since I generally think that housing, being a basic human necessity, should be available to everyone - and there is no part of capitalism that protects people from homelessness in fact it's baked into the system, I think some socialism would be useful here.

It's easy to say you'd be happy to live in a housing project when there is no prospect of you living in a housing project. Meanwhile, the home values of the people advocating for "socialized row housing" continues to appreciate as they advocate against the building of new mixed-income market housing. Pretty convenient.

There is only so much land in the lower mainland, and a huge influx of new residents every year. Whatever is going on in the Vancouver metro area is not laissez-faire capitalism. For examples of that, look to the major metros in Texas where zoning is lightly regulated and prices are comparatively lower than elsewhere.

FWIW, I find the zoning argument to be the most persuasive if your goal is to make housing more affordable. If you have other goals, including a transit-friendly city, bike-friendly city, "green" city, etc then it will definitely not be optimal.