They do help though. Individuals need to realize they can’t afford to live in a place like California and have to give up that luxury if they want more affordable housing arrangements.
But this is no solution at all because everybody knows that. People want to live in California because there are jobs in California and not in Mississippi. In Mississippi you pay $100 less for a house and then make $200 less in income, so who is going to do that?
To fix this you either need to make housing cost less in California or make jobs pay more in Mississippi. But if anybody knew how to do the second one they'd be doing it already, whereas we do know how to do the first one -- build more housing.
I understand your point but you’d have to validate this assumption.
You’re also not accounting for the costs to build more housing in California. Instead something you may want to look at is moving employers to Mississippi (or wherever).
To take your point to its logical conclusion everyone in America would move to California for the highest paying jobs relative to housing. But that would never work in the real world even if we had no restrictions on housing development.
When you look at the entire planet I think this becomes more pronounced. When you look at hyper-local environments as well (say Manhattan) it also demonstrates the point.
This is basically the efficient market hypothesis. If it was better to live in Mississippi then people would be doing it. Which allows housing in California to be overpriced by the amount that jobs in California pay better, before it starts happening. Which is bad, because then all of the people still in California are overpaying for housing.
> You’re also not accounting for the costs to build more housing in California.
Stop inhibiting it from being built and people will voluntarily pay to build it.
> Instead something you may want to look at is moving employers to Mississippi (or wherever).
But how? And is that even good? There are some benefits to having regions specialize in things.
> To take your point to its logical conclusion everyone in America would move to California for the highest paying jobs relative to housing.
The high paying jobs are for people in particular industries that are currently concentrated in California. Those people do live in California, or other similarly situated places like New York, rather than places like Mississippi or West Virginia.
The way you prevent everybody in that industry from wanting to move to the same city is by creating more housing in every city, so that it balances and the result is not net migration but rather just an increase in real wages at the expense of incumbent landlords.
Every area that's a candidate for urban density and public or active transportation has people living in it already. Those people are not any different from San Franciscans in terms of their concerns about gentrification, traffic, parking, shadows, or change.
If they don’t like it they can relocate to other financial services jobs in other locations, make less money, but have more discretionary income to spend on houses. Everyone can’t work at the most prestigious companies or life in the most prestigious zip codes.
Alternatively maybe Goldman should open tech and investment banking jobs in Poughkeepsie.
The issue here is that demand shifts regionally over time. Dwelling units in Detroit don't satisfy demand in San Francisco. The result is that you continually have to increase supply in the places demand currently is. To keep prices flat, the number of units per thousand inhabitants has to increase over time, because the number of empty units in areas that have fallen out of demand will increase, but the high prices you're trying to avoid will be somewhere else.
> By definition, only investment properties can be underutilised - owner occupied homes are occupied!
This is also not true. You can have e.g. a 3-bedroom home with one occupant, even if the occupant is the owner. You can also certainly have underutilized land -- any single family home in an area where there is demand for more housing but zoning prevents it from being constructed on that piece of land. Because then you have that acre of land providing housing for one family when it could have been two or twenty.
> global asset price inflation driven by a broken financial system (i.e. a system being artificially pumped up with cheap credit).
This can only happen when supply is artificially constrained. If it cost $200,000 to add a housing unit and suddenly everyone can get a bigger loan than before, the instantaneous effect would be for housing prices to increase -- but once they're above the construction cost, construction occurs until they no longer are, i.e. until they fall back below $200,000.
At that point cheap credit might cause people to buy bigger houses, or use the loan money to buy things other than housing, but long-term you can't get the price of the same housing unit to increase above the cost of creating more of them, or supply would just increase until it fell back to that cost.
What you can do is increase the cost of creating supply, e.g. by restricting where it can be done, so that the cost of doing it goes up and with it the price of a given housing unit. Which is what has happened.