[ecshafer]

Housing can not be a viable asset class, or it will continue to rise in prices. Step 1 is Land Value Taxes. Step 2 is remove/greatly reduce zoning, allow construction and streamline the process. If you allow density, building up, and incentivize it, then it will be built. Developers spend tens of thousands of dollars in permits and interest payments before they can put a shovel in the ground. Being a landlord isn't really an issue, morally, ethically, or with regards to people buying houses. The issue is when there are limited number of units, and people turn them into investments.

[tokioyoyo]

I’ve been part of housing-related online discussions for a decade now, and everything reads like a wish-list.

- Majority of people own their homes. So it’s in their best interest for the housing prices at the very least not go down.

- Less, but still, some amount of people are buying houses with sky high prices. After a huge purchase, they will also do their best to ensure prices don’t go down.

- Another good chunk of people are waiting out to inherit homes from their parents.

All these people, in one way or another, will protect asset prices (e.g. voting for certain people to ensure nothing gets built). The only ways I can see it being resolved is:

- China-style benevolent dictatoresque commitment to surgical detachment of housing prices from the general economy (they’re trying, a lot of people are unhappy, but some progress is visible)

- Population collapse, to reduce the demand. But looking at Japan, metro areas will keep skyrocketing, because people will flock to the main cities even more

Any of the options will make a lot of people unhappy. A huge political no-go zone.

All the talks about allowing construction and streamlining the process have been circulated for a decade+ at this point. But incentives for people aren’t there. “I got mine, don’t care about you” is the general attitude of majority of people.

[big_toast]

I've thought about that for a while and agree that's a big problem. I wonder if people unwilling to 'exit' bear some responsibility too?

I agree most owners are incentivized to have their leveraged ROIC be high. So they put pretty strong pressure against supply increases.

Defectors (other neighborhoods, cities, regions, states) and other living options might tank actual long term ROIC of supply constrained places. The economics eventually stop working in the supply constrained place as the real cost of housing production is significantly lower elsewhere.

[HaZeust]

I've always wondered if UBI can replace the category of "viable asset class" that homes are now, wherein UBI offers upward mobility now AND generational wealthy in the future - the same way owning a house does. Wouldn't that be a valid populist play, an actual policy rooted in pragmatic, and all-around a winning strategy?

[tokioyoyo]

UBI is also another topic that has been discussed intensively for the past couple of decades. I don’t see it being implemented almost for the same reasons as cheap housing. On top of it, we experienced UBI-lite during pandemic, and saw the inflationary result. “But it wasn’t perfect UBI” argument won’t really fly either in the current political world.

People are generally selfish and will want the best for themselves and their loved ones.

[HaZeust]

>"On top of it, we experienced UBI-lite during pandemic, and saw the inflationary result."

I sympathize with this take because it's the one I had, until I saw the data. On top of genuinely appealing to the fact it wasn't perfect UBI - which doesn't make it an invalid take just because you pre-emptively pointed it out - our inflation during COVID-era relief was overwhelmingly from abuse of PPP loan applications and payouts, disaster relief funds - and a healthy chunk to the federal subsidizing of state/local governments [1]:

"Congress has obligated approximately $5 trillion in response to the COVID pandemic although significant portions of this money remain unspent. For reference, in fiscal 2020, the total state spending for all 50 states was $2.28 trillion, or less than half of the pandemic relief spending. Of the obligated relief funds, approximately $1.8 trillion went to individuals and families through $844 billion in stimulus check payments and $666 billion in enhanced unemployment compensation.

Additionally, businesses received approximately $1.7 trillion, much of which came from the $835 billion Paycheck Protection Program (PPP) and $349 billion Economic Injury Disaster Loan (EIDL) Program. State and local governments received $745 billion, the health care industry received approximately $482 billion, and other remaining industries received approximately $288 billion."

To add, there's also the case that one of the industries most hurt from COVID, which was automobile sales, was impacted by the stimulus checks - but by less than 20% [2]:

"Despite this substantial demand response, fiscal transfers account for less than 20% of the surge in auto prices"

1 - https://www.taf.org/covid-19-relief-funds-two-years-later-wh...

2 - https://www.nber.org/papers/w34954

[smallmancontrov]

Also, the Federal Reserve bought $2 trillion of mortgage backed securities, pumping the housing market massively.

[mchusma]

The issue is not investment at all, we want more investment into housing.

But you are absolutely correct you cannot both want housing to be a good investment (increase in value faster than inflation) and an affordable (drop in price lower than inflation).

Don’t subsidize demand. Allow more supply. Private homeowners, big developers, all of the above. Build.

[jgeada]

And stop allowing people who view their house(s) as an investment from being able to veto any and all building. While that incentive is present, there will be massive hurdles to being able to build the amount of housing that is necessary.

[ziofill]

The problem will keep persisting as long as the politicians who have the power to change the rules of the game have the opposite incentive to do so.

[ecshafer]

To be more specific, I dont think owning a sfh to rent out should be good. But building an apartment complex should be a good investment. Unrestrict building, and tax underutilized land.

[jimberlage]

I think the problem with getting this done in the US is the lack of public transit and the dysfunction in public schools.

If you could avoid a $700 car payment and still get to school/job/grocery store on time, a lot of Americans would.

But if you can't, and you are paying $700 anyways, why not at least use the fact that you're paying $700/month to travel anywhere and get a bigger parcel of land all to yourself? There's a big incentive to have single-family homes for rent as long as that math is true.

And if you can live in a dense area and get around OK, but paying $700/month saves you from $800/month in private school payments, then the math might still make renting SFH better even if the transit is there.

[cpburns2009]

No body is forced to have a $700 car payment. That's a luxury financing $30k+ on a brand new or nearly new car.

[jimberlage]

True (I certainly don't!) but I chose it because I had to do some research a while back and that was close to the average for Americans.

[1]: https://qz.com/average-car-payment-by-state#average-car-paym... [2]: https://www.lendingtree.com/auto/debt-statistics/

[cpburns2009]

That's actually shocking. I've been in tech for 15+ years and have a good income. I've only recently purchased a new car instead of used, and with a monthly payment right by my state's average. Prior to this I never had a payment more than $250/mo.

[curious_curios]

Though with gas, maintenance, insurance on top of the car payment, that $700 is probably the floor of car ownership.

[cpburns2009]

Those will vary vastly depending on where you live. Gas and insurance are high where I live, and even though the environment is harsh on cars (winters with salt), maintenance has never been much.

[jmyeet]

This is just wrong. Western economies have largely been hollowed out from productive output in favor of hoarding land and property because there is inelastic demand and increasing prices has become a political goal.

It should be super expensive to own more than one house. This by the way is what China did where Xi Jinping famous said "houses are for living, not for speculation" [1] as he quietly popped the real estate bubble a decade ago.

Increasing house prices are just enriching the already rich and stealing from the next generation. Nothing more. Houses should depreciate in value. They should not be an asset class.

[1]: https://en.wikipedia.org/wiki/Houses_are_for_living,_not_for...

[WD-42]

Investment certainly feels like a problem. The amount of completely empty homes in my area (coastal ca) is disgusting. There are entire real estate brokers that specialize specifically in investment - these people aren’t even pretending that their clients will use the house, they may never even step foot in it.

Meanwhile economic stratification continues and the other side finds it increasingly difficult to make the down payment.

[vablings]

The issue is that housing should not be an investment but due to rising labor and materials costs and also more restrictive code, they are now an investment.

[bombcar]

Housing should be an investment; you should be encouraged to invest in where you live and improve both your property and the area around you.

It should not be a good investment - it should, over time, boil down to below inflation once you take maintenance and taxes into consideration.

[em-bee]

housing should be an investment the same way that planting trees is an investment. it should not be a financial tool to make you money by selling it.

[jameshart]

Housing - more generally real estate property - can absolutely be a legitimate asset class, sustaining speculation and global investment; that is how we get capital invested in building out housing infrastructure.

But you shouldn’t have to make a leveraged loan-backed investment in a single asset class in order to afford shelter.

The problem isn’t ’housing is an investment’, it’s that people are long not on ‘housing’ but on their own single specific house. That’s a horrendously undiversified portfolio.

[FloatArtifact]

Get rid of property tax or somebody below a certain income.

[itake]

I really don't feel great how people in high density housing subsidize home ownership costs for the people in the burbs.

[FloatArtifact]

> I really don't feel great how people in high density housing subsidize home ownership costs for the people in the burbs.

That's a good point, and it's why I qualified my statement by saying under a certain income. You say high density as if it's a bad thing.

[itake]

Pros and Cons. I currently have an upstairs neighbor that plays piano at 4am.

As a high density resident, I would like to capture all of the pros of having a smaller foot print, since there is nothing insulating me from the negatives.

My neighbor in Seattle only needed 5 homes to convince the gas company to dig up our road and install a gas line down our street. There is no way the gas company had the money for that purely on the revenue they may collect from those 5 homes...

[all2]

Property tax is theft.

By applying a tax to a _thing_ that someone owns, you are saying 'actually, this thing you have is mine, and if you don't pay me for the privilege of having it, I will take it away from you'.

[jandrewrogers]

Property tax pays for maintaining the utilities and services connected to the property. If you buy land that is completely unconnected from public services, you will find that the corresponding property taxes are extremely low.

I've had annual property taxes as low as $1/acre.

[FloatArtifact]

For context, mine are close to 3 grand a year. For plot, just big enough to fit the home and a little yard in town

[itake]

Maybe I'm beating a dead horse, but who pays for the roads to houses in the suburbs and why is it the people living in apartments that don't use many roads?

[all2]

I'm not saying taxes are bad. I'm saying specifically that taxing property itself is bad. If someone 'owns' a thing, why would they pay rent to some landlord (the state)?

I acknowledge that I'm indulging in equivocation by saying 'assessing taxes from property is essentially paying rent to the state'. I assert that the equivocation is valid because the outcomes of not paying rent and not paying property taxes is the same: you get evicted.

[pandaman]

This depends on what you mean by "own". We have property rights, which are colloquially referenced as "ownership" but, by definition, these are rights and don't exist outside the state, which enforces them. So yes, your rights are given to you by the state and you don't really have any without the state enforcing them. If you could naively own your property then you could just tell the tax collectors to fuck off, what are they going to do with your property if it had been truly yours?

[nisegami]

Land ownership is theft. Why should people have a right in perpetuity to the land that we all share?

[itake]

In the UK, a leaseholders get screwed if they forget to renew their lease before the 80 year mark.

The cost to develop the land needs to justify the development. If I spent $500k to build a house on the land, I would like to be able to use that house for as long as the house exists (or I sell it to re-coop the investment).

Many people are really bad at saving properly, but they will pay their mortgage. Landownership enables at least some old people to have a cushion in retirement.

[Giefo6ah]

You're mixing a house as personal property with the much broader claim of private property on land.

It is possible to protect those two uses you mentioned, and other reasonable uses of land, without at the same time spending state resources in enforcing perpetual, absolute, hereditary, exclusive titles on plots of land.

[FunHearing3443]

We may live in the same country or planet but that does not mean we inherently have any share of the land.

[marcusverus]

Motte: We all share the land!

Bailey: The state owns all land!

[BrenBarn]

Sounds fine to me! I mean, it depends on how much the person owns. But I'm fine just saying "you own too much, you don't get to own that much anymore".

[mrguyorama]

And when "Just build more" doesn't work because private builders have no incentive to build a million dirt cheap starter homes for a mediocre profit and instead focus on building a few mcmansions?

We have a lot of building going on where I am. It's all for $500k homes. Nobody builds cheap one or two bedroom homes on tiny plots of land because the target consumer is more constrained and therefore far less profitable.

So much of the problems in the US right now is that capitalism optimizes for maximum profit, not any profit. It isn't sufficient in the US business culture to run a business that merely employs a bunch of people and produces things, because in the US, the "business" exists to be an asset class for the extremely wealthy.

So if the free market has no interest in serving people with less money than god, what do we do then?

I don't know why people believe there is a regulatory impediment to building a home outside of a city core. My dad is a contractor and he serves pretty much exclusively rich (gay) tech bros who fled california to increase our cost of living here in maine because nobody else can pay what they pay. His clients that don't fit that mold all inherited a good mid sized business or are well connected families. He does this instead of the plan he had a decade ago to refurbish or build about 10 new homes on a specific plot because it's literally twice as profitable at 1/100th the effort. Instead of working himself into an early grave, he can work 25 hours a week and live as upper middle class with his $100k pickup truck that is owned by his business.

[jmyeet]

We shouldn't allow people to hoard housing and land. That’s the core problem here. It should be super expensive to own more than one property. I refer people to the Housing Theory of Everything [1].

I disagree with the Ultra-YIMBYs who believe in removing all zoning and regulation. If you do that, you get Houston. Because that's what Houston is. What we need is to prioritize living over investment returns in housing. Part of this (IMHO) is to have expansive social housing like Vienna to compete private land use "honest". Also, we should really not allow rich enclaves. There should be social housing in every ZIP code.

[1]: https://worksinprogress.co/issue/the-housing-theory-of-every...

[em-bee]

There should be social housing in every ZIP code

exactly. it has been shown elsewhere that one problem that makes it difficult for people to escape poverty is that everyone around them is poor too. as long as you live there there is an invisible ceiling in how much you can improve your life as an individual/family. people who were able to move to a better neighborhood found it much easier to improve. mixed housing avoids that poor neighborhood trap.

the same btw, is true for the integration of immigrants.

[pibaker]

I don't know why people say Houston is unregulated. Minimum parking requirement is a huge factor in any kind of housing development and Houston has one.

[anon291]

People say things like this, and yet housing has -- for most of history -- been a viable asset class, including in the times that people idolize as the great boom times of America.

The main issue is mismanaged regulation, as always. Real estate is probably one of the best examples of that. For example, in my city of Portland, OR, it's easier to keep an existing structure and not build new housing than to build new housing (because then you can do things by right). To build new housing, you have to hire a company called 'faster permits' (seriously, that's what it is called, look it up) which promises to 'expedite' the process of having things approved. If you, like me, are skeptical of engaging in investments in which you have to bribe your government to approve housing, then you won't put your money into building housing. Portland is probably not alone in these sketchy arrangements, which is why real estate developers often seem sleezy -- due to how the government manages itself, only the sleeziest people are willing to engage at all.

[anal_reactor]

I've posted it already, but at least in my country (Netherlands) it seems like the problem isn't the lack of housing, but lack of marriages. If people ages 30-60 married each other at the rate they used to in 60's, then there would be no housing crisis.

The statistic that doesn't compute for me is how is it possible that we're having a housing crisis while at the same time we have historically low average number of people per house.

[pixl97]

>we have historically low average number of people per house.

I'd like to see the actual statistics method used to calculate that. Saying it's marriages alone just doesn't past the smell test for me. Just because people aren't married doesn't mean they don't live together and the number of unmarried people living together is higher than ever. What makes far more sense is the number of children people have has fallen off a cliff which drastically drops the number of live at home adult children.

[anal_reactor]

https://www.cbs.nl/nl-nl/nieuws/2024/36/1-op-de-5-mensen-woo...

It's basically this graph. In 60's almost nobody was living alone (less than 400k people). In 2024 about 3,3 million people live alone. When you look at the infographic, ages 30-60 add up to like 1,2 million people.

https://www.volkshuisvestingnederland.nl/onderwerpen/aanpak-...

Here we have an estimation that the country is missing like 400k houses. So if two-thirds of those 1,2 million married each other and started living together, they would nicely plug the housing crisis by freeing 400k houses.

Either way, we have a huge societal change that lots of people live alone, which did not use to be the case.

[autoexec]

> In 60's almost nobody was living alone (less than 400k people).

In the US, back in the 1960s you could own a home, a car, and support a family all on a single income. If we got back to that home ownership would skyrocket.

[therealdrag0]

People living together out of necessity (roommates) still has the optics of a housing crisis of those people wish they didn’t live together. This is the opposite for couples who want to live together.

[jorgen123]

Is that true, though? When my parents got married in the 60's in the Netherlands, they had to move in with my grandparents because there was no housing available and eligibility was restricted. It took a few years and a 2nd child before they were eligible to rent an apartment. Perhaps that does not show up in the statistics?

[pfisherman]

I think land value tax is misguided. Issue is what happens to retirees on a fixed income when value of their property increases? Are they forced from their home to lower priced area? Regardless of how one might feel about the morality of that it is also worth asking whether this might create perverse incentives to become landlords?

[lemoncucumber]

> Issue is what happens to retirees on a fixed income when value of their property increases?

That’s not specific to a land value tax, the same thing can happen with traditional property taxes when the property is re-assessed.

California tried to “solve” exactly that scenario with Prop 13 limiting how much the assessed value of property can increase without a change in ownership and it’s been a disaster (and a contributing factor to the housing crisis, albeit far from the only one).

[profdevloper]

Why is immigration always absent from these discussions on HN? the US has absorbed millions of people through immigration (both legal and illegal) which puts pressure on housing supply which drives up prices since supply is relatively inelastic. Enforcement of immigration policy would increase housing supply without needing to build more capacity in the short term and would lower prices.

[MiscCompFacts]

It was pointed out to me recently that immigration crackdown has maybe already started to affect housing prices in DFW since H1B crackdown. https://www.bloomberg.com/features/2026-dallas-h1b-housing-m...

[HDThoreaun]

We need immigration because there’s a construction worker shortage. No immigrants = even more expensive to build new homes

[AngryData]

The only shortage is in pay. I and many other people left trades becauses wages were crap for jobs that take 20 years of your life away. Despite the memes about trades, the majority of trade workers are not making bank unless they have an unusual specialty and a union. 1 plumber in Manhatten doing making bank doesn't make the plumbers all across the rest of the nation wealthy.

[HDThoreaun]

Ok? If you want natives to take these jobs construction prices will go up. So we need immigrants to affordably build things. If all construction workers are native going forward the vast majority of people will never be able to afford a home other than inheriting one.

[AngryData]

Labor is a fraction of the cost of trade work. The highest expensive is in most cases the bulk construction materials, next is the cost of management and bureaucracy. The excuses of labor costing more here is just that, an excuse, most often used by large corporations to try and excuse them offshoring everything and hollowed out the organization for short term gains.

[siriusastrebe]

Why can't we train our own citizens to become construction workers?

If you claim that people "don't want to work" for those wages, then isn't immigration keeping our wages down?

Wouldn't business owners pay more for labor if there wasn't a stead supply of under the table illegal immigrants doing it for less?

[HDThoreaun]

Immigration is keeping wages down for jobs natives dont want. I dont see the issue.

> Wouldn't business owners pay more for labor if there wasn't a stead supply of under the table illegal immigrants doing it for less?

Maybe, or maybe they just employ less people and less things get built.

[marcusverus]

There's no such thing as "jobs natives don't want", only "wages natives don't want".

> Maybe, or maybe they just employ less people and less things get built.

The foreign born population residing in the US fell from ~15% to ~5% from 1920-1970. It was one of the most prosperous and productive periods in human history.

[HDThoreaun]

US was prosperous post war because the industrial capacity of the rest of the world was destroyed. Comparing that time period to any other doesnt make sense.

We can only employ natives if we want, we just have to accept that prices of things that are currently run on immigrant labor will go up, and a lot less of it will be produced. Personally I am unwilling to make that tradeoff but obviously you dont have to agree. US labor market suffers seriously from baumol's cost disease, only solution to that is immigration with the understanding that immigrants will take unwanted jobs in exchange for a better life for their kids.

[loudmax]

We also need immigration because it grows the GDP, makes for a dynamic and resilient economy, increases scientific and technological output and raises the standard of living.

Immigration is what made America great.

[profdevloper]

I think immigration from developing nations does raise the standard of living for the immigrant (e.g. India), but not for the host nation -- it's called "regression to the mean". As far as GDP goes, I always think of this:

> Two economists are walking in a forest when they Come across a pile of shit.

> The first economist says to the other "Ill pay you $100 to eat that pile of shit." The second economist takes the $100 and eats the pile of shit.

> They continue walking until they come across a second pile of shit. The second economist turns to the first and says "l pay you $100 to eat that pile of shit." The first economist takes the $100 and eats a pile of shit.

> Walking a little more, the first economist looks at the second and says, "You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. can't help but feel like we both just ate shit for nothing." "That's not true", responded the second economist. "We increased the GDP by $200!"

[rawgabbit]

That’s funny. Here’s one.

Lawyer: “Can a foreign citizen donate to a U.S. campaign?”

Judge: “No.”

Lawyer: “What if we put millions of them into a multinational corporation first?”

Judge: “Now you’re speaking constitutional law.”

[profdevloper]

If there is reduced demand for new housing due to increased inventory, there's less of a demand on construction for new housing. The expenses involved in new builds is both labor and building codes/restrictions - construction firms undercut Americans by hiring foreign labor that they can pay under the table.

I would much prefer Americans pay a premium for skilled American labor and choose to live in more modestly-sized homes.