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For what it’s worth, I fully agree with the author that the trends we see in housing availability and affordability are driven largely by perverse economic factors, and that the result is destructive. However, “creating new wealth” is kind of a weird way to judge the validity of investments - many companies we invest in are not profitable due to wealth creation, they’re vehicles for growing wealth because of speculation, and for a lack of better options. A lot of this boils down to inflation and the need to keep debt prices low to fuel growth. Countries can’t really unwind the ball of noodles that neoliberalism has cooked up, the transition from a moderate growth economy to a high growth, low risk environment necessitated low interest rates and low inflation, and the rest of the market has followed suit. In light of all of that, it’s still true that unless the world’s government change course to disincentivize real estate speculation, owning your own house will create wealth by the basic fact that they allow you to lock in a fixed cost essentially forever while everything else gets more expensive. I will pay the same amount on my mortgage for many years while salaries gradually increase, to the point where 40 years from now my $2000/mo payment will look to us like the $200/month payment of 1980. In the past few years, I’ve seen several friends go from paying $700/month for rent to well over $1000, with some renting smaller places for prices that massively exceed my mortgage. At some point, something will have to change - whether that means new development in smaller communities, rent regulation, negative speculation incentives, or something else. As a homeowner, I personally don’t care, because I bought my house to live in, and trust that whatever happens, it will first need to affect flippers and speculators over people who actually utilize their real estate. |