[yummyfajitas]

The total housing inventory available in all these cities is just not high enough to satisfy the demand of investors.

But why is the inventory not high enough? Certainly we could easily build more.

Oh yeah, exclusionary zoning in NYC and SF. FAR limits of 1.33 in Mumbai. Mumbai and Delhi have half the density of Brooklyn, Vancouver about a third - there's plenty of room for more inventory. Even in Manhattan we could fit a lot more inventory in.

We don't do this because the middle class don't want it.

[YZF]

It's mostly single family homes that investors are after in Vancouver and that have appreciated the most in value. Vancouver is landlocked between mountains, sea, and river. You can't build many more single family homes in Vancouver. I imagine with most other cities building more would be either more sprawl or more density both of which can create problems.

Canada isn't densely populated so why should the Vancouver people need to squeeze into apartments while houses are sitting empty? So you're right. The middle class doesn't want it.

It's true that not everyone can have the "American Dream" house/garage/car any more but at the same time having a bunch of expensive houses sit empty is worse than them having someone live in them.

I think part of the solution might be building new cities, something that doesn't seem to be happening.

[kspaans]

Yeah, it's like regulatory capture. The owners in the cities want to keep what they have, and vote for it. I'm sure some of it has to to with propping up house prices, but I don't think all of it does either! It's an interesting problem when it comes into conflict with a city's growth.