In theory an huge increment in supply should balance the market. The problem is that in practice, you can't increase supply enough to "fix" it. Houses are a safe investment, so when they devalue, they are bought right away.
E.g: Portugal is one of the countries in Europe with more houses per inhabitant but the housing market for locals was completely wrecked by Airbnb and foreign buyers (good climate and cheap prices). And I say this as a centrist or even leaning right.
When there’s a housing shortage, I guess not building is somehow the solution?
- Limit ownership to residents.
- Limit the amount of houses per person. Max. of 2?
- Limit airbnb outside touristic areas.
Stuff that doesn't work: subsidize houses or limit rents.
Why have a max of two? Seems arbitrary, why not one?
Easy, local government pay for new developpements according to their needs, and rent them at 1/20th of their cost (per year, a bit more to account for losses maybe) for at least 10 year, after which the familly/homeowner can buy the rest of the house.
Finding the sweet spot implies trial end error. It's certainly not 1 and I suspect 2 is too restrictive unnecessarily. The relevant is to restrain housing from being a financial instrument not to repress people. If a person can't buy a dozen houses the demand (and consequently the price) will fall.
2. If no one can own multiple houses, then rentals cannot exist. Where do those who cannot afford to buy live?