I am sorry about your conclusion, but you're ignoring all the knock-on effects. These houses are utilizing prime locations and locations anywhere near the city centers where the majority of jobs are. They're sitting there empty for large portions of the year depriving the local economy of patrons. They're owned by wealthy individuals who are driving up the housing costs in the entire area, which also benefits them as the value of their 'investment' increases and the ability for the average person to own a home diminishes. "Just build more houses".... where? at what cost? Are you going to tell people to stop trying to buy houses where the jobs are, where the modern services and utilities are?

"We" are not a rich country, unless by "we" you mean the 10% of the population that is rich. I feel well compensated, I'm well within the middle class and consider myself lucky. I cannot afford a home, in the current market, in a location with the services and locality of my industry. I live in Florida. Vrbo, Airbnb, and properties purchased by institutional investors have directly increased my housing costs. That is objective, not subjective. Call it anecdotal all you want, the populated parts of the state have seen their housing options obliterated.

While we're on the topic, let's not forget foreign investors. Most of the properties in my neighborhood were purchased by foreign investors. My block in particular has at least 4 houses that are owned by asian investors. I've met the families who live-in and rent those houses. The property management company also runs the HOA and votes by proxy for those investors, investors who don't care about the daily goings-on of the community.

If we're going to use statistics for anything, let's look at it in the affirmative instead. How many homes are owned by the family living in them? The most recent data for Florida is for 2015-2019. Here are the owner-occupied housing for the most populated counties, starting with the one I live in.

Hillsborough County - 58.6% Miami-Dade County - 51.2% Orange County - 55.4% Broward County - 62.1% Palm Beach County - 68.9% Duval County - 56.7% Pinellas County - 67%

The National Average is 64.8%. In my county nearly half of the housing is not owner-occupied. As a nation, nearly a 3rd of available housing is not owner-occupied. I bet this is worse now, as this information is pre-pandemic and from the very beginning of the most recent housing rush.

https://www.census.gov/quickfacts/fact/note/US/HSG445222#:~:.... https://www.census.gov/quickfacts/fact/table/US/HSG445222 https://www.florida-demographics.com/counties_by_population https://www.census.gov/library/visualizations/interactive/ac...

Edit to add some relevant information: https://cdn.nar.realtor//sites/default/files/documents/2023-...

There is nothing ethically preferable about owner occupancy. In Switzerland, which I consider to be a highly developed society, they have a special tax that applies only to owner-occupants. I think we should adopt that. More people should rent, and fewer people should consider home ownership an investment strategy.

Also, to be quite honest, your allusions about shadowy Asians has the whiff of racist tendencies.

I'm sorry if there was any implication of bias against Asians as a group. I don't think I implied that at all, when did I call them shadowy? That smells of your own biases and perceptions. I was simply referencing the region of those I'm aware of. My neighbors home is owned by an investor from the Philippines. Three other houses on my block are owned by investors from China and are rental houses. This information can be confirmed by a simple property tax search.

I don't understand this stance. I want to own so I can customize to my liking. I want to own so I can add that solar system and battery backup. I want to own so I can add 2 ft of pavers on both sides of my drive-way. I want to own so that 30 years from now when I'm preparing to retire, that my only housing costs will be utilities and taxes. What person wants to never be able to call something their own?

Everyone who runs the World Economic Forum .

Building more houses might be easier, but it's incredibly difficult nonetheless, at least if we're talking about affordable housing. There is tons of housing being built in my area, but it's all for the wealthy. Literally nothing is being built for anyone who isn't rich.

And what affordable rental housing exists is increasingly being purchased by investment groups who then squeeze them for every dime, squeezing out the very people who need that housing in the process.

The housing crisis really looks to me like an aspect of the serious wealth inequality problem we have.

You add housing at the top of the market, the highest price point, because people will pay more for a newer home. Consequently the older ones become cheaper, because people who prefer the new ones and can afford them no longer compete in the market for older ones.

This has been dramatically demonstrated in Berkeley, where I live. We have added tons of 0- and 1-bedroom apartments recently. These are very expensive, $3000/mo+. This building boom has caused the price of rent-regulated older apartments to plunge. What had been renting for $2252/mo in November 2018 is now renting for $1688/mo in November 2023. That is a significant increase in affordability of studio and 1-bedroom apartment, effected by building newer, expensive ones.

Edited to add sources:

The discussion is too long for me to recapitulate here, but all of my data in various forms and some visualizations are available here:

https://observablehq.com/@jwb/berkeley-rent-board-data

Also in random tweets such as:

https://twitter.com/Jeffinatorator/status/172890293692602402...

I believe these are visible to non-account holders.

Can you please provide a source for the rent decreasing? Maybe a site showing the historical rental cost(s) for a given unit? I've not seen that happen in my market at all, I've only seen existing rental rates increase.

Edit: I think I see where a lot of our disconnect is coming from. We have no rent control here, rent very rarely decreases and is mostly pegged to comparative sq.ft. rentals in the area. Age of the property does not factor as much as location.

It’s also simple math. If 10k new units are built, you either need 10k new people to enter the market, or prices will drop.

Do enough of it and rents will begin to fall below loan maintenance, causing even more sales and more price drops.

Rent control only fights against upward pressure for existing renters... When you describe rents continually going up, it's due to more people competing for limited rental units. Cities can and do see rent declines (they first show up as "first month free" etc. before landlords bite the bullet and reduce rate). Seattle has seen temporary competition for rents in some neighborhoods as new construction started in 2019/2020 comes online. It won't last since we've seen such a decline in new construction starts, but the mechanism is sound.

But what's to stop wealthy people from buying the newly built houses as yet another asset to their real estate portfolio to the exclusion of first time homeowners?

If we remove the regulatory barriers to building more housing, the rich and the less rich can buy as much housing as they want.

Think about this in the context of any other good. No one worries that if we build more cars, they'll all be purchased by rich car collectors. Yes, when more cars are built, a few very rich people with many cars will buy more. But the increased supply also make it more economical for everyone to buy more cars.

Oh, yes. Nothing frustrates me more than seeing all these “luxury apartments“ being built everywhere. I never gave a crap about luxury. I just would like a stable, clean place to live. I even love studios more than a one bedroom apartment. But now even the studios are all “luxury“.

As I said, at other times in this thread, the only incentive we have as an and an economy in the United States, is agreed.

As I said, at other times in this thread, the only incentive we have in this economy and in the United States, is greed.

It doesn’t matter. The goal should be to build enough housing to make it a marginal investment, at which point it won’t be attractive to real estate investors. Of course, a house is still attractive to someone who wants to live in it.

Yes, this is exactly my point. The fundamental issue is greed, not housing. If we don’t get rid of the greed, these houses will be either bought up by investment corporations or the wealthy people that didn’t get second houses the first time around.

People will always be greedy. Theres nothing we can do to solve that problem. We can solve the housing shortage though. Investors wont buy homes when theyre easy to build because their value wont increase unless supply is constrained.

If we keep building housing, it ceases to become an interesting investment. That's what would stop them.

Do you not see the contradiction in your statement?

Houses are built by developers whom by definition only build a project when it's a sound investment. They immediately stop building when this isn't the case.

Different kinds of 'investment'. You're correct that if they can't turn a profit, they won't build. Same as with cars or bicycles or any other good. But that's not a long term thing - they want to sell the goods they have produced, turn their profit, and move on to the next project.

What people who buy homes are told, though, is to essentially 'buy and hold' because it's a "good investment" that will gain value over time, even if they are not building anything or adding any value to the dwelling they inhabit.

Where I live, during the recent runup in prices, the median home gained something like $100,000 of value in a year, which is significantly more than the median household income.

I'd say that most people do not buy a house for the investment. They actually live in it and any value appreciation is a side-effect. A pleasant one, but not the primary goal of the purchase.

Here's a chart of homeowner gains vs developer profits. It's a bit apples to oranges, but it gives you an idea of the scale of who benefits (at least on paper) from the housing crisis:

https://oregoneconomicanalysis.com/2021/03/16/who-benefits-f...

Ideally, I think, home prices would be fairly stable - neither appreciating a lot, nor dropping in value. Boring. That would also make them a 'bad' investment for corporations looking to make a buck by buying and holding.

> What people who buy homes are told, though, is to essentially 'buy and hold' because it's a "good investment" that will gain value over time, even if they are not building anything or adding any value to the dwelling they inhabit.

Do you expect people to buy and sell their home? It’s their home, why would selling (in the short term measured in decades) be the goal?

People primarily buy homes to live in. Any benefits of price appreciation, and/or political interests of those nearing their end of life and want to downsize/die are secondary.

In a perfect world, I would agree. But in reality that will never happen, and young people continue to suffer in the meantime. Housing should have never been allowed to become an investment.

There was a large drop in the price of housing just 15 years ago. Granted, other factors were involved, but that's part of what the article is about. It is possible.

This is that heart to what the problem is. Instead of letting the housing market, collapse and state collapsed the federal reserve started printing money nonstop to inflate assets, including housing. And they haven’t stopped since then. This is what causes separation of wealth in the United States, and the increase in homelessness.

And now the Fed can’t even get the guts to lower inflation by raising interest rates because of what it’s done to the housing market.

When I go to city council meetings to support housing, the problem is NIMBYs. Not macroeconomic conditions, but ordinary people who show up at an evening meeting to complain about - I kid you not - some code removing a number for garage heights. They wanted to use this to block some apartments in their neighborhood.

This kind of thing happens over and over and over again, all across the US and it adds up.

I don't live in your city but in my city we just got finished pushing a project approval through a 7-year political process. The project will build 1000 new apartments on the parking lot of an existing subway station. Most of the new apartments will be deed-restricted affordable housing. At the most recent and final hearing there were still Boomers showing up to demand the project be scrapped because they prefer free parking.

I hope you can keep building land, specifically land nearby a lot of employers and services, in order to build those houses upon.

We do have the technology to stack dwellings vertically, which is a good way to use scarce land more efficiently.

The problem is that it's not legal in most parts of most cities.

I am a YIMBY and still understand that these forms of housing are nowhere near as valuable as the SFH.

Just stating that Americans love their yards/privacy and it's not so simple to fix.

> I am a YIMBY and still understand that these forms of housing are nowhere near as valuable as the SFH.

Well, ok then - we want affordable housing, let's build affordable housing. Nothing's perfect. Some people prefer denser housing in a more desirable place, and some prefer more space in Cyanide Springs, Oklahoma. Both should be a choice, but currently, we limit the denser housing options way too much.

Nothing at all. This is exactly what's been happening in my area for a long, long time.

First of all I do not care if people rent or buy homes. Under my economic policies when I become god-king of America, owning a house will be the worst investment anyone has ever heard of and people will run screaming from the small-time flipper game. I will Make Landlords Poor Again. Vote Jeffbee.

Secondly if a person owns a home and rents it to a second person, I'm fine with it.

They would only buy it they felt the return was higher than other investments

If the capital appreciation is zero, then it's just the rental income, which is offset against the cost of maintaining the property and the opportunity cost from the capital outlay on the property. That's not a major problem though, as the rental price won't be able to get too high as people will simply rent or buy elsewhere (as you've reduced the other barriers to building more property)

Of course you can get rid of the appreciation by simply taxing the land (which is the thing that mainly appreciates -- the building itself typically depreciates), and get most of the way there.