[rndmize]

No, lack of building _is_ the main problem. It doesn't matter if the demand for homes is "artificial" or not - the easiest solution is to build more.

> Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause?

This is something I've wondered, and I'm of the opinion there's two reasons that are rarely discussed. One is the great recession/sub-prime crisis, which, at least in the US, caused a collapse in housing construction - I'm not sure how much this is true for other countries. The other is the coming of age of millennials, leading to a "bump" of people in their 20-30s trying to get their first home - I'd expect this to apply to most of the countries listed.

[mattgibson]

You really need to provide data to make that assertion. Shortages of buildings are not the only reason that property prices can be high.

Properties are made up of a building and a plot of land that it's attached to. Whilst we can nake more buildings, we can't make more land, so the land in a given location is by definition going to be in a permanent state of shortage. If more poeple want to live in that location OR (the main driver of this crisis) if more money is chasing the same fixed supply, then the prices rise. The land component is the part that has become more expensive recently, not the buildings.

[rndmize]

> Shortages of buildings are not the only reason that property prices can be high.

It pretty much is - everything else is window dressing. Pretty much every single city in China is 3-10x more dense than any area in the US, so lack of land is a reason I find continually uncompelling. Our lack of density, zoning practices, NIMBY attitudes and car dependency all contribute to this, with the result being a lack of construction.

Tokyo has been and continues to be affordable for anyone who wants to live there by building: https://www.nytimes.com/2023/09/11/opinion/editorials/tokyo-...

Here's a grad student on tiktok who does good, well-sourced analysis on this front (he has an entire playlist on the issue of vacancy rates given how frequently it comes up): https://www.tiktok.com/@divasunglasses?lang=en

Article on zoning law changes in CA and how municipalities have put out estimates for how much they should build and then consistently, for decades, not even come close to meeting them: https://darrellowens.substack.com/p/ca-cities-to-lose-all-zo...

There's endless amounts of info on this front - look up strongtowns, YIMBY, parking minimums and associated issues (https://www.youtube.com/watch?v=OUNXFHpUhu8), japanese vs. american zoning policy (https://urbankchoze.blogspot.com/2014/04/japanese-zoning.htm...)...

[bobthepanda]

Land price is inherently tied to buildings though, in the sense that the cap of value one can realize from land is the maximum square footage you can build by zoning.

Land that you can develop into multifamily that still has capacity is getting ever rarer. If you poll Americans the preference split is 60-40 suburbia for suburbs vs dense walkability, and yet in metropolitan regions the residential land allocation looks more like 93-7. This shows up in square footage prices, where dense walkability is priced much higher per square foot.

[h12nz]

It’s a shortage of floor space that is the issue. The problem is the Anglo countries have mostly made it illegal to supply it, in both dimensions. Auckland clearly showed this when it upzoned.

https://workresearch.aut.ac.nz/__data/assets/pdf_file/0010/5...

[geraldhh]

> It doesn't matter if the demand for homes is "artificial" or not - the easiest solution is to build more.

crafting a "i owe you a house" and giving it to the investor while squatting the real estate seems much more efficient

[cma]

Doesn't the US already have something like the most sq footage of housing per capita in the world amongst major countries?

We have lots of secondary and tertiary homes, parked empty RVs, vacant investment properties, and lots of floor space per occupant, empty spare bedrooms, dedicated social entertainment rooms that are only used for parties, etc.

[bane]

> No, lack of building _is_ the main problem.

This might be one of those things where the obvious bit (built more!) is both true, and reductively incomplete. We do have a sense that just building more housing in the presence of lots of liquid capital and easy credit seems to create a speculator market -- even down to retail investors. (e.g. The China real estate bubble bursting seems to be strong evidence that this can happen.)

We also have some evidence that building a single type of housing leads to another kind of speculator bubble (e.g. the subprime mortgage crisis of the early 2000s was proceeded by a massive wave of construction of primarily giant single family homes for example). Even if somebody was interesting in buying something smaller at that time, there wasn't inventory anyways - yet those smaller housing units were not where prices increased the most (note: I'm aware I'm not providing specific evidence of this, but if memory serves it's basically correct) yet they often saw large increases in rental prices.

So from those two examples we can likely say that a market that:

1. Speculation causes housing prices to rise, even when millions of units are being built.

2. Lack of diversity in housing construction can lead to both high prices for some types of stock and lack of availability for others.

So how can we solve this beyond the trivial "build more"?

I'm starting to believe a few things are needed for a healthier housing market:

* We need to limit housing speculation, or at least make it less interesting as an investment option. In South Korea, they've introduced various taxation schemes that limit the appeal of owning multiple properties after decades of housing speculation. The idea there is that housing does exist, but occupancy rates are lower than desired. The result seems to have been an explosion in new housing starts with entire districts in Seoul being razed and rebuilt.

* We also need to find ways to ensure diversity in housing. Now that interest rates have gone up and single family homes seemed to have softened as a market, it seems that developers are concentrating on building "luxury" units of various other types. It's a good start, but if these units are still outpricing need, then they'll sit empty or end up speculated on. Many areas have dealt with this by mandating a certain amount of "affordable" housing, but that has turned into a joke in these areas.

There needs to be other ways for developers to build lower budget units, perhaps tax incentives, or changing zoning to allow for more types of housing.

Here's an example of the problem: The D.C. Metro recently added an entire new line to the system intended to connect the major international airport into the city. The areas around the new stations along the line have all been subject of new rezoning plans, higher density, urban fabric, etc. However, the construction that's happening along that line, while adding tens of thousands of new housing units, is almost all "luxury" (e.g. high price). One of the areas along the line is among the largest reurbanization projects on the planet (Tysons), and Reston/Herndon could grow into a contiguous "city" as large as many other "name recognized" cities in the U.S. like Providence, or Salt Lake City. Average housing unit prices in that area have been rising double digit percent per year (quarter over quarter) with the average home price (not just single family, but condos, town homes, etc.) is at around $700k USD. People who bought in this region even just a few years ago would be unable to afford their own homes today given pricing and interest rates.

So we see another example of "build more" and even "build more types" but aren't being met with "limit speculation" and "build more diversity" - and even in the presence of harder to get credit, the prices are spiraling.

[ethbr1]

I'd love to see a progressive rate purchase tax on properties. Proceeds to fund transit capital expansion.

Above the median, buyers (and therefore developers building) start incurring increasing transaction costs.

Part of the issue is that builders can dump luxury properties into the market, then wash their hands of future responsibility as soon as it's sold.

[int_19h]

Why not just have a progressive property tax, and use that money to fund local infrastructure as needed?

Or better yet just tax land heavily.

[ethbr1]

Because property taxes are one step removed from builder incentives. Better to directly adjust builder housing price choices, at least for intents of building less luxury housing.

[lo_zamoyski]

> developers are concentrating on building "luxury" units

And many of those "luxury" units don't cater to families, but single people. You'll find 1 or 2 bedroom units with bedrooms where you can barely fit a queen sized bed. So these are units that are not only more expensive than, say prewar or midcentury units, but more expensive per unit area than those units.

[CrispyKerosene]

I think you might be missing the point of the poster. While building more might in the reduce housing stress in the next few decades, rapid building for the sake of feeding the investor market is pouring gas on the fire.

This is where discussing the housing problem becomes challenging. Half of us want to burn the whole system down and take housing back to the basic human need it is, while the other half want to work with the system we have.

Its tough