| "If rich people want to have a few extra houses, that's fine. Just keep building more, as long as they want to pay for it." Not really. You can't have them taking up land and services for houses rather sit empty. If they aren't used, they aren't helping to alleviate the constraints. Just like all the vacant rental units. "Most taxes on houses should drop, if their value drops. Eg that's the case for property taxes." Yes and no. The municipality and schools have costs they need to cover. They can only drop so much, especially when we're talking about the top 10-20% houses. "Utilities don't drop automatically, yes. But you can eg not run the heated pool, or you can retrofit insulation etc." The retrofits are major capital expenses that my mention later on. They get more expensive the bigger the house is. You still have larger costs on things like a new roof or flooring since there's simply more of it. Yes, they themselves generally wouldn't become a limiting cost. But neither would the property cost nothing. There are multiple problems - corporate owned vacancy, building sizes, and even distribution are factors. The root problem is not lack of building new homes, as you claim. It is a distribution and utilization problem at its core. About 10% of the housing stock in the nation is vacant. If you more evenly distributed population and didn't hold units off the market, you'd fix the issue. It would be better for the nation to increase investment (jobs and infrastructure) in moderate or smaller sized cities in depressed areas with higher vacancies. Otherwise you end up with a vicious cycle consolidating people in a dozen or so major cities with people paying exorbitant amounts of money. One often overlooked aspect is that people have preferences towards single family homes. Simply allowing more density isn't going to fix that preference. |
They wouldn't be paying exorbitant amounts of money to stay in NYC or SF. They haven't in the past, before America stopped building. The distribution of rents used to be fairly 'flat', without the crazy spikes in productive cities we see today. See eg https://kevinerdmann.substack.com/p/the-consumption-basket-w...
Yes, many people have a preference for single family homes. If the people who are ok with density were legally allowed to enjoy that density, then there would be more space (even relatively close to city centres), left over for the people who prefer single family homes on large plots.
That also applies for your concerns about rich people taking up land: legalise density and building taller.
> The retrofits are major capital expenses that my mention later on. They get more expensive the bigger the house is. You still have larger costs on things like a new roof or flooring since there's simply more of it. Yes, they themselves generally wouldn't become a limiting cost. But neither would the property cost nothing.
Maybe, but you'd expect homes meant for rich people to have nicer than average roofs and flooring already. So your concern is a bit weird.
The vacancy rate doesn't seem particularly outside of historic norms: https://tradingeconomics.com/united-states/rental-vacancy-ra... So I'm not quite sure what you are on about?
In any case, even with your much higher estimate of 10% it's not a big deal. Even if you magically went from 10% to 0% vacancies overnight, you'd still only increased the effective housing supply by about 11%. The shortfall in building is much larger than that.
Again, please have a look at https://kevinerdmann.substack.com/p/the-housing-shortage-is-... and perhaps https://kevinerdmann.substack.com/p/random-notes or https://www.amazon.com/Shut-Out-Shortage-Recession-Universit... for a book length treatment.