Comment by whatever1
1 day ago
Housing crisis is just a result of increasing income inequality and the resulting real estate investment craze. The population of America (real demand) did not suddenly double at any state/city.
Rich have become so much richer that can afford bidding wars at unattainable prices. They can buy investment homes and be cashflow negative for decades in anticipation of the increased market bidding prices. Of course they oppose any sort of legislation that would increase competition.
The population of a place doesn't have to double, or even change at all, for prices to go up. All that is necessary is for more people to want to live in a place. Those with the $ to satisfy that desire will outbid those who don't and you can easily double/triple/10x prices with no change in population.
How come more people want to live in the entire US if the population is relatively flat? Prices are up everywhere.
The only answer is that the increased observed demand is a result of the increased investment demand (rather than native demand)
Your factual statements are wrong. The US population isn't flat over time, and housing (supply) decays over time. Prices aren't up everywhere, just the places people actually want to live.
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This seems like it contributes to the problem, but doesn't feel like the root cause at all. Every homeowner, not just the ultra wealthy, has an incentive to oppose new housing. (Though in many metros any homeowner is automatically wealthy by some definition). The lack of supply seems like the core issue here.
What if the housing crisis is what's causing wealth inequality? Piketty's data pointed to this.
Definitely is a negative feedback loop. So I expect the trend to accelerate as long as foreign investment keeps flowing into the US in the same rates
Other than people claiming it, what actual evidence have you seen that foreign investment would be a problem if we weren't restricting housing supply?
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> The population of America (real demand) did not suddenly double at any state/city.
The population has literally doubled multiple times, and housing supply has not increased. There used to be significantly more units per capita.
A lot of the time it's not rich people bidding over a home, it's people in a game of chicken to see who will put themselves in the worse financial position.