[crooked-v]

Housing prices keep going up in the US because, fundamentally, there's not enough housing and hasn't been enough housing built for decades [1]. In most big cities, this is a self-inflicted problem caused by bad zoning and by planning and permitting processes that can take years and add huge amounts to home prices. (This is a big part of the reason there's so much "luxury" housing; adding a superficial high-end gloss is one of the few ways to disguise the additional bureaucratic markup.)

Unfortunately, a huge number of people like to blame this entirely on evil developers and evil corporations and think that merely adding more regulation on those will make the problem magically go away.

[1]: https://www.cnn.com/2023/03/08/homes/housing-shortage/index....

[bink]

Housing prices are rising dramatically even where populations are declining and land is abundant. It's not as simple as saying there's a housing shortage due to zoning.

[kevinventullo]

Are you sure? Housing prices in my small Midwest hometown have risen by something like 1%/yr on average for the last 30 years.

[bumby]

Just curious, what's the population growth been like? If it's been declining, why would we expect housing prices to go up at all?

[twelve40]

it's almost never a simple function of population. One example: between 2010 and 2020 population of Latvia dropped by about 10% while the house prices have doubled.

[thfuran]

If it used to be that two or three generations of a family lived in a house and now everyone wants their own, housing demand could increase while population drops. If marriage rates or number of children per household decrease, housing demand per capita probably increases.

[kevinventullo]

Right, population has been steady or even slightly declining, and there has been plenty of housing development, so it’s not a surprise that existing housing prices haven’t gone up. But even that directly contradicts the OP’s first sentence.

[traverseda]

General inflation?

[nprateem]

House prices go up because they're now investments. Bring in land value tax and you'll quickly see a reversal.

[pjmorris]

I just went and looked up 'San Francisco empty residences'... it's somewhere between 40,000 and 60,000 depending on where you look. I then looked up 'San Francisco homeless population'... somewhere around 8,000.

I am not convinced of the narrative that there isn't enough housing.

[rilindo]

Those 40,000 - 60,000 "residences" are not necessarily available or even occupy-able. And the number of homeless is very like an under-estimate[0].

[0]https://www.youtube.com/watch?v=3xZXdXxYBGU

[jimbob45]

I wish this narrative would die. It's probably true that there's not enough housing but it's also true that AirBNB is sucking up many of the vacancies and apartment ownership consolidation is allowing owners to endure vacancies longer than they should be able to. You're simply never going to convince everyone that building more is the answer when there's such low-hanging fruit in front of everyone's eyes that you refuse to acknowledge.

[midwesternerer]

I don't understand why you are suggesting Airbnb isn't "fair" demand on the housing stock.

Also it is really hard to believe that Airbnb is a meaningful impact on housing prices outside of certain touristy locales. My suburban neighborhood has had 5+ offers on every house that has come for sale in the last year and there are no Airbnbs in the neighborhood and only two within a five mile radius.

The only real answer is to build more--not depend on the government to artificially constrict supply by regulating vacation rentals.

[bumby]

>The only real answer is to build more

I don't think this kind of dichotomous thinking generally holds with complicated real-world problems. They are almost always a confluence of multiple "answers".

E.g., yes, housing supply is probably part of the solution. But so may be integrating policies that disincentivize viewing something necessary (like housing) as an investment asset.

[midwesternerer]

I'm not sure what you are arguing with here. Housing is an attractive investment because the supply is constrained which drives up the price.

[bumby]

I'm not 'arguing', I'm trying to add some nuance.

I'm saying housing is a unique form of 'investment' for a variety of reasons. For one, it's an 'investment' that most people can't exit from because you have to live somewhere. It's also an investment that is relatively illiquid. It's also an investment where the majority of Americans wealth (about 70%, I believe) is tied up in, from which they borrow against. It's also a necessity.

These all combine to create an incentive for a bunch of wonky policies that can have negative societal consequences, like artificially inflating the price of housing. So, yes, the fact that it is considered a good financial investment is also part of the reason it creates societal problems.

It would be like artificially constraining the production of food so that those who have 'investments' in food companies can make more profit. Obviously good for the investors, probably less so with society as a whole. Now add a bunch of constraints like the friction of buying/selling those assets etc. and the problem gets worse.