| Why can they sell for a future profit? Because there prices are going up faster than inflation? What does this mean? Demand grows faster than supply. What does this mean? Not enough units are being built. ... it's microeconomics. It's real estate. One of the most liquid of markets, one of the most well studied of economic fields. One of the most common example in microecon. Literally econ 101, no oversimplification, no simplification. Sure, we can add other aspects, like vacancy. (Just as there's a natural rate of unemployment, there's a natural rate of vacancy. And if property taxes are too low, then this rate is too high.) Also it's possible to tax vacant units. As some cities in Canada do. > This guy I told you about, he can sit on these empty properties for 5, 10, 20 years if he chooses to, because he doesn't need the money. What's the problem with that? He basically subsidized the construction. That's equivalent to a direct zero interest loan to the developers. ----------- Yes, we all know that since the market has a tendency to remain irrational longer than one anticipates it's rarely a good idea to bet against very visible trends. Especially if those trends directly emerge from very visibly bad politics. In this sense I think buying real estate and letting it sit empty is questionable. But, like I said, it's still funding development. High prices still incentivize development. We know how these things go. We know how irrational people are. (How we regularly fail to elect competent governments.) At some point it's impossible to paper over this. Like you said, basic housing should be provided, not something to fight tooth and nail for. But for some reason it's not happening. (And it's not like we don't know how. Soviet high-rise blocs are all over Europe and they are pretty okay, yet somehow the 'projects' in the US failed spectacularly. [And of course we know why they failed.]) And it's hard [but not impossible!] to hold people accountable for looking out for themselves in this crazy world (by using their existing capital to invest into housing). |