Comment by thelastgallon
1 day ago
Because the western world (and rest of the world following western world) has one rule (the only rule): make the super rich richer, everything else is just marketing to accomplish that.
Home prices are completely out of reach for most people in UK, Canada, New Zealand, Australia (coming soon to a country near you!). You're overpaying to live like a 1920's postman: https://www.youtube.com/shorts/tGPHcteG9dY
Create artificial scarcity (by zoning, monopolies, regulatory capture), buy assets (never have to improve any assets because there is no competition, no functional market of competitors producing better housing), extract wealth forever by maximizing rents and asset prices.
Housing shortages aren't a result of some nefarious plot to make the super rich richer.
It's more complex than that. We need to build more housing, and there are various reasons why that isn't happening. Many of them are well-intentioned and even good (high safety standards dramatically increase the cost of new buildings).
In practice, it turns out not to be true. I am speaking for the US which I know better.
Many environment protections are farcical. (SJ earthworm fiasco). Many building regulations are intentionally difficult with little added safety (2 fire exits). Avenues for litigation and local activism increase delays and costs. Widespread demarcation of cities as historic (despite being run of the mill post war builds) makes redevelopment impossible.
I don't particularly care about intentions. I'm sure Mao thought he was doing the right thing by shooting down sparrows.
The outcomes matter, and the outcomes mean supply crunch, cost inflation and massive weather transfer to home owners (old and rich) from home buyers (middle class and young).
Ah, the classic "good intentions" argument. Picture this: a well-meaning monkey sees a fish struggling in the water. Wanting to help, it pulls the fish out and lays it in the sun to dry. Proud of its good deed, the monkey beams with satisfaction—proof of its altruism! In the monkey world, it's now a hero, basking in praise for its selfless act. Monkey does a TED talk how we can save billions of fish, signs book deals, influencer deals, shills for scams, and so on.
On the 'high' standards: It is all wooden sticks and drywall, completed by 2 minimum wage unskilled labor with a nailgun. None of the homes in US withstand anything, insurance keeps going up. If standards are high, why is insurance going up significantly?
The main reason for high prices is not shortages, its low interest rates.
Interest rates have gone up and housing prices haven't changed much. The average monthly mortgage payment for 20% down 30 year fixed mortgages have shot up though. Something makes me feel like it's not just interest rates.
It's remarkable to see how intuitive supply and demand laws are for many individuals until it comes to one particular market: housing.
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It's both.