Reasoning as if financialization is a new phenomenon seems destined to come to the wrong conclusion.

2) The commodification and securitization of housing as we know it today is absolutely new. This allows for new and exciting ways to distort valuations beyond intrinsic worth, which is the only way land and housing were assessed until recently. We did not have esoteric derivatives of insurance on mortgage tranches 100 years ago.

But thank you for the Orwellian insistence that we have always lived in this hell. Speaks to the scruples of those who would deny people dignified places to live because of how they're able to manipulate numbers on a screen.

> This allows for new and exciting ways to distort valuations beyond intrinsic worth, which is the only way land and housing were assessed until recently.

Sure derivatives are new, and they caused a bubble in 2008 due to giving lots of people mortgages and hiding the risk of the mortgage default, raising prices. Are suggesting that's what's going on now? Because it sure doesn't look like that at all, it looks like lack of supply to meet people's needs, which is IMHO the fundamental immorality of the system as it stands right now.

The help we live in is because capitalists (ie homeowners and landlords) have control of the planning process which allocated how much housing there can be, and they have constrained the amount of housing. Yes, it is Orwellian and cruel. But it's also very important to realize that getting rid of derivatives will do nothing at all to bring down prices, unless there's a pricing bubble. Getting rid of the 30 year mortgage would bring down prices, but at the same time also reduce affordability of homes, so everybody would be in the same situation of a shortage.

The scrupleless housing deniers live in the homes next to us in cities, denying new housing because they are conservative and don't like seeing new things, and backforming reasoning like "it's only housing for people I don't like or can demonize." Sometimes these folks care about their asset price appreciation too (numbers on a screen) but a lot of it is simple fear of change.

Yes.

>Because it sure doesn't look like that at all, it looks like lack of supply to meet people's needs

That is certainly the propaganda line that is being pushed in order to eventually justify public subsidies for builders. The shortage of affordable housing is commonly conflated with a mythical shortage of physical housing. There is a shortage of affordable housing because residential valuations have risen out-of-step with everything (including wage growth and inflation) except the desired ROI of the securities that they underlie. This is what we get when homes are more valuable as assets than domiciles, which, again, is emphatically not what they were in the modern past (even at the top end; robber baron palaces were not built as wealth stores so much as prestige amplifiers; they were not the investment (i.e., meant to be aold or borrowed against), but multipliers for the actual investment (one's social standing and influence). They often only left the family at a loss.).

We don't need a massive amount of new housing. But I agree that the solution will involve, for once, throwing homeowners rather than homeseekers under the bus.

Suppose this is true. Then you replace that portion of the housing stock with new construction, and what problem is there? The problem is only if you're constrained from doing that.

> The other thing is that rents going up dramatically is a global phenomenon

There have been two major recent drivers of housing demand. One, the interest rates that until COVID were near-zero (which is a global phenomenon because capital markets are global). Two, since COVID, work from home causing people to move around and shift where the demand is. Also a global phenomenon.

Both of these can drive short-term increases in rents on the order of a few years, but they should also drive new construction, and then once the construction has caught up to the demand the rents would go back down.

Unless the construction isn't allowed to happen.

> The argument that high rents are mainly due to large regulations and lack of building is largely not supported by the evidence.

It very much is. You can take any two cities and account for things like median income and population density and when you're done you'll consistently find that the one with more restrictive zoning has higher rent.

The problem is, as it can be observed in Budapest for example, that the new constructions focus on flats suitable for single people, or the short term renters, or the luxury segment, and the middle segment of the market is pretty much non-existent. Flats suitable for families are not being built, in the sizes and number of rooms where it would be useful you only have condos with rooftop terraces and such thins that unnecessarily inflate the prices.

Obviously when people construct buildings, they put in the nicest viable finishes and decor. No profit-seeking entity goes through all the effort of raising a structure only to finish it off with linoleum and shitty cabinets.

The lack of housing for families is a consequence of 4 roommates preferring cheaper rent in a 4bd than to rent 4 singles.

Interesting, I observe the exact opposite

New builds use low quality materials uniformly because that maximises their profit

There are exceptions, but they are exceptions to the rule

I am in New Zealand. Our building industry is in a dreadful state

In places where social housing works, the government builds enough new, shiny apartment buildings to keep the market rent low. Obviously, the construction of apartment buildings MUST FIRST BE EASY AND LEGAL for the government to do this.

Turns out that when you build something that's not particularly nice when it's new it becomes unattractive as it ages, which creates unattractive high-crime neighborhoods. Great to solve housing, but very unattractive for anyone else in the area. We basically stopped building them

At least in the US, a lot of the popular "historic" building types like the New York brownstone had a midlife period where they were deeply unpopular and ill-maintained.

This makes sense. Owners, even poor ones, will do their best to maintain their housing; less wealthy owners especially would know that they're likely stuck with their unit and should do their best to keep it comfortable. Renters have no incentive to (it might even be illegal for them to make improvements), and landlords are unlikely to cut into their profits if they can avoid it.

I would say that policy which encourages long-term renting - per-property, as well as per-renter - is deleterious to the socioeconomic fabric. The majority of a housing unit's life should be spent inhabited by its owners, and the majority of a person's life should be spent in a house owned by themselves or their family.

To give the example, brownstones became unpopular as it became apparent their designs resulted in high heating and AC bills since they were pretty drafty and poorly insulated. Only when they blossomed into being "historic" did people start valuing them enough to start fixing the problems and restoring them.

Further it’s not housing that creates poverty, and thus crime ridden neighborhoods. Somewhere is going to be relatively poor and thus both poorly maintained and crime ridden. Cities have seen the exact same building go through cycles of poverty to prosperity and back.

So a "crime-ridden" neighborhood or "slightly bad" people perhaps relies on defining crime narrowly as things that poor people do

(also often the quality is not really premium/luxury, and the design is soul crushing everything black)

Yes, demographic crisis.

A flat suitable for a family is suitable for single people living together (see american sitcoms), but the opposite is not.

I think we all also agree that it's a problem if housing for families is not built. But the route to more housing is rarely through problematizing other types of housing.

FWIW this is also very true in the United States, layouts of new units are generally completely unsuitable for families and that's why upper middle class but not rich enough folks in San Francisco tend to rent/buy condos in older buildings.

Different problem than in France I guess, where the square meterage is just too low, here in the US it's just wasted.

The families thing is also because all other things being equal, more bedrooms will lower the price per sq ft of a unit due to weaker demand; and right now studio and one-bedroom demand is so high that you could reasonably build a building full of them and generate profits.

We have more demand for single apartments than ever before because of changing household size dynamics. People are staying single longer and also living longer and thus more likely to become widowed.

The only way out of this problem is to enable more building of housing to more balance the demand of single unit apts with larger unit apartments.

When those single individuals are able to move out into a smaller apartment, it starts freeing up the shared family size units.

Banning single units is extremely counterproductive and overall raises prices for families in situations like these.

Why is so little getting built [1]?

[1] https://www.property-forum.eu/news/housing-construction-clos...

If it were that simple can you give some good examples? Hong Kong has little regulation and crazy high prices, Tokyo is expensive for people on local salaries even if it looks cheap to us (and having structures depreciate to zero value over 20 years makes the market weird).

Tokyo is considered to have relatively affordable housing.

Hong Kong's lack of regulation is not particularly relevant to the situation. It is mainly a political issue. Much of the land in Hong Kong remains unused.

Then there is the fact that city centers are choke full, no further place to build, what is there is often so old its protected from major changes by various rules and laws, and very expensive without exception. So where new stuff can be built is relatively remote. But then young folks complain how far that is from city center and their jobs, that they don't want to spend their lives commuting. Construction is certainly allowed, I haven't heard about single country banning it in any way, but folks want those central places for peanuts. Almost everybody wants them, still for peanuts. The fact is that even in proper communism stuff that was important, scarce and everybody wanted it was a prized treasure with hard competition and few winners.

Thats one of the things I see is changing with new generations - wanting it all right now, never happy, not much humility or hard work to get to some desired place. Then hard disappointment when reality ain't some fabulated tiktok feed. Ie I am working on setting up my = my family modest wealth and even after moving to Switzerland with pretty good job it will take me till 60 at least, even with my wife being a doctor. Young consider this a failure, maybe my kids will do so too but I don't care. Then folks vote for trump since he keeps saying how everything is shit, thats so easy to identify with. But for every unhappy western kid there are 10 or 100 ones coming from rest of the world working hard, not complaining, with laser focus on their goals. A bit of discipline and focus can get one pretty far, especially with such competition.

> Construction is certainly allowed

> what is there is often so old its protected from major changes by various rules and laws

Construction being allowed on a field three hours outside of the city is irrelevant. The problem is that there are laws that de facto or de jure prohibit the replacement of most existing buildings with taller buildings that provide more housing.

AirBnB and the boom of private tourism rental is transforming city centers in the former. New housing is constructed, just on the outskirts of these cities and push people off the city. This is bad for the dymamic of the city, this is bad for the environment when people pushed outside of city centers usually have to resort to drive to go to work...where they used to live, this is bad for kids and becomes a health issue when kids can't walk to school anynore and this is even ultimately bad for tourism itself as these places lose their soul and every single restaurant becomes a shitty tourist trap where no effort is needed or made in term of quality and service.

There are plenty of places where the old city is not all that vibrant or interesting (and where a family is so rare the question is how to get the few kids to a lively district every morning) and I don't have a fiddle small enough for the owner's opportunity loss.

Why not both?

The solution is known: significant land value tax and looser regulations to actually use the land. This will not happen though because of lobbying of property and land owners who enjoy their rent seeking. They will always manage to find another scape goat. One day it's flippers, next day it's Airbnb. Anything but land owners being forced to pay taxes to fund the area they own land on.

You've got cause and effect backwards here. The population hasn't grown because the housing hasn't been built for them. The city population would have grown if more housing were available, but instead what happened is that the limited supply drive rents up and kept some people out.

Separately, there's also too few hotels in the city to accommodate tourists, so some housing was converted to that more profitable use. It all can be traced back to not building enough to satisfy increasing demand.

Average household size has declined due to changing social dynamics (longer times before marriage, fewer kids, etc.) so even if population is static you need more units. Spain went from 3 in 1990 to 2.5, which is a pretty drastic change.