| > Those price increases incentivize builders to increase the housing stock (which subsequently lowers prices). Capping prices prevents the price mechanism from working, leaving a shortage of housing. The issue, empirically, is that (a) we don't see the right housing being built, and (b) we don't see quality housing being built. We see a lot of high-end luxury units being built, but what we need are more 1- and 2-bedroom units within 20 minutes (preferably, by affordable public transit) of where people work. We also see a lot of large (and therefore expensive) but cheaply built McMansions that'll be falling down in 20-40 years, so the long-term picture of the housing stock is not improved. What we need is for the government to step in and build affordable housing as a floor at a controlled price ("commie blocks"). No one will be forced to live in one, of course, but they'll be an option; the rich can still buy property on the market if they're so inclined. > My landlord takes all the risk of owning the property (prices don’t always go up after all). If you own your house and control your geography (i.e., you'll never be forced to move due to economic inopportunity) then you have the truly risk-free position. Renters are at much higher risk (log transform, Kelly Criterion) than landlords, because real estate costs are such a high percentage of their
budgets. The problem, of course, is that owning a house, while it gives you a zero beta to the housing market in theory, still does have the risks you described. For one thing, other people can do things that damage your house's value--both its subjective value as a place to live, and its objective market price--such as building highways and obstructing sun/view. The other issue is that, in today's hypercompetitive world where in decent employment every job search is national (and possibly international) it's impossible to control your geography... you could be laid off and forced to relocate to get your next position. So, you're not wrong in general. I think it's a wise financial decision for a young person to keep renting one's place--as opposed to renting money to buy a place--but I also think it's inaccurate to imply that landlords are taking more risks than they really are. It really gets on my nerves when rich people and employers talk about how they're "taking all the risk" and therefore deserve more, when the truth is that the poor (involuntarily) take all the risk, because each $100 means so much more to them. |