I'm completely missing your point.
If I buy property in a developing area because I think it's cool, and I live there for years and am part of the community and watch it grow around me, and years later decide to sell - I took an early risk, don't I deserve to recognize the rewards from that risk?
If it was a bad risk and the area went to hell, and I lost money - is that ok?
But making money isn't?
Should home builders not be allowed to make money because housing is a basic human need?
Should we not be allowed to build luxury homes that cost more because we could have built multiple cheaper ones with the same money?
What should the rules be, in your opinion?
In your mind, how much of the increase in value of housing is due to “early risk” paying off in a valuable community vs an increase in overall demand without an increase in supply?
When the nation sees the housing supply increase slower than the population, that’s not a risky investment. It’s musical chairs where you pay to win.
I'm asking because it really doesn't seem like you have much experience with it based on your comments.
Housing prices go through bubble-burst cycles regularly.
National trends are interesting, vaguely, but local markets are everything, and fluctuate wildly based on many factors.
We get into serious trouble when we have external forces skew the market, like in 2008.
Covid years + essentially free loans (nearly zero interest) are another example.
It caused a bubble that's going to cause a lot of pain as the market corrects.
I'll be part of the solution - I'll buy properties (most likely next year) that are in distress, rehab them, and then sell them later.
According to you, though, that's somehow wrong. I should just let foreclosures happen, let houses rot empty - because profit is wrong?
I’ve seen HGTV. I’m familiar with house flipping, I know that the markets are local. I don’t really need an economics lesson to understand that low interest rates spurred buying. Don’t kid yourself into thinking it takes a genius investor to buy something in low supply relative to demand and resell it for more.
Guess I should be learning from you then.
Being a nationwide problem, they probably wouldn't be able to solve the problem. Because solving the problem means everyone moves to your state.
If you don’t win the lottery you can always buy resale which is close to $1M for a 2 bedroom place.
Oh and it’s a 99 year lease. After 99 years you give it back to the government and get $0.
Then surely I have failed to convey it!
In any case, my edited point about "deadweight loss" is perfectly consonant with the parent poster's feeling of guilt, and with what I presume is your feeling of disgust; it is in fact the economic term of art for that at which you intuitively recoil.
(Although you're kind of equating a very, very expensive home, in the overall scheme of things, with the minimum requirements of decency, if you really think that he's exploiting someone's inability to afford housing, but w/e.)
Now let's get into the controversial stuff...
> Housing is a basic human need like food and clothing.
Agreed. But it's also an asset, because someone has to build and maintain it and have exclusive use of (at least parts of) it, and being a basic need doesn't automatically create a right to something (for obvious reasons) so that asset is gonna trade hands voluntarily like any other. Its price will fluctuate, sorry.
Now, NIMBYs using government fiat to drive down housing supply in their market is an annoyingly common failure mode of local democracy, maybe that's all you're upset about.
You glimpse the problem at the end, only to dismiss it. Your glimpse is when you say:
> Now, NIMBYs using government fiat to drive down housing supply in their market is an annoyingly common failure mode of local democracy, maybe that's all you're upset about.
The triangle that you're looking at is that NIMBYs lead to lack of construction, lead to undersupply of housing, which is a direct cost of both high housing costs and high homeless populations. The profit that I have as a homeowner comes from somewhere. Where it comes from is artificial scarcity that causes renters to struggle, and over 170,000 Californians to be unhoused.
Looking at that without guilt, is like New Englanders whose families made a fortune investing in the triangle trade, congratulating themselves on not having been those evil slave owners. Sorry, but it is tied together. You cannot both profit from the crime, and disclaim a portion of responsibility for it at the same time.
What are those obvious reasons?
Yes, food, but I don't see many arguments for bringing down the price of caviar.
IOW, making an argument against high property prices in highly desirable areas is not the same as making an argument for low cost housing.
It doesn't really matter how dense you make housing in highly desirable areas, there'll always be more people who want to live there than houses available.
The solution is more remote working and much faster public transport.
Tax breaks on businesses for each remote worker will be cheaper than building more slums, it will be quicker (demand is affected almost immediately) and it needs no political campaigning against the local NIMBY residents.
Instead of trying to guilt trip people about the paper value increase in their property, just remove that paper value increase altogether.
(I'm not sure how you would solve the slow public transportation problem. Where I am we have 160km/hour trains, but the door-to-door travel time using these trains to travel 20km is still about twice the time it takes to drive)
A land area with a 40 mile radius and the population density of Manhattan would contain the entire population of the United States.
> Instead of trying to guilt trip people about the paper value increase in their property, just remove that paper value increase altogether.
The only way to do this is to build more housing. You can't fix it with mass transit because the existing housing is low density and mass transit requires high density.
That's a good point you make - even at the extremes of high-density living, high density still doesn't solve affordability!
People can neither walk nor bike 80 miles, and public transport over 80 miles with multiple stops takes hours, so you can reasonably expect that prices would be considerably higher in the center (40 miles to everywhere) where it is more desirable, and people can neither walk nor bike 40 miles for commuting. Public transport infrastructure for a 40 mile journey also makes commuting infeasible.
The problem of not being able to afford living close to where you need to be is still there, even in the hypothetical pathological case.
If it can't solve the problem in the ideal case, it can't solve the problem in any case.
Most “new urbanism” people advocate for medium sized, densely built, 15 minute cities. Not a single megalopolis.
I can drive 30-45 minutes and be sitting on a lake with no one around, when I retire that drive will be 5-10 minutes.
A lot of us don't want to live like that even if we could.
Which should make it even easier to find low density housing, because you won't be competing for it against people who just need a place to live and don't care about having a big yard.
Manhattan is <23 square miles, containing ~1.6M people, surrounded by a metropolitan area of ~20M. The surrounding area has a lower population density, implying that it could be higher, which would reduce housing costs by supply and demand.
It's not about how much housing you have in absolute, it's about how much you have relative to demand. The demand in NYC is about the highest in the country, so they need more supply than they have even now.
> People can neither walk nor bike 80 miles, and public transport over 80 miles with multiple stops takes hours, so you can reasonably expect that prices would be considerably higher in the center (40 miles to everywhere) where it is more desirable, and people can neither walk nor bike 40 miles for commuting. Public transport infrastructure for a 40 mile journey also makes commuting infeasible.
The average commute is 41 miles as it is. And with that level of density you could justify express trains that travel at highway speeds or more, making that distance a much more reasonable commute than it is now.
The area in the center might cost more than the outer ring, but what of it? The point is not to make all housing have the same price, it's to build more housing to lower the price of all housing. It doesn't matter if the center costs more than the outskirts if they each cost 25% of what they do now.
It also goes without saying that you would not actually build this. You neither need nor want the entire US population to live in an area the size of Connecticut which represents less than 1% of its land mass; there are multiple metropolitan areas spread all over. The point is merely that enough housing for the entire population would fit in that area, which serves as an upper limit on how much housing demand you could even have. And even Manhattan has a lower population density than we could build at -- it certainly doesn't consist entirely of 100 story buildings despite them being possible to build. The claim that it isn't possible is clearly false.
> The problem of not being able to afford living close to where you need to be is still there, even in the hypothetical pathological case.
That is the pathological worse case scenario because you would have to provide enough housing for a single city with 340M people in it, and you still end up with a lower average commute than people have today.
If you took each existing metropolitan area and raised the population density to that of Manhattan (i.e. lowered the area with the same population) then then San Francisco metro area with 7.8M people would have a radius of less than 6 miles.
If someone discovers their vintage car is worth more than they paid for it as teenager should they feel guilty over this?
Do you feel guilty when you eat food because someone somewhere isn't?
I am struggling to find the right words to express how wrong your view is to me. Housing is a basic human need like food and clothing. How can you in good conscience celebrate making a tremendous profits exploiting the fact that people cannot afford a basic need?