[x5n1]

In Kazakhstan you would have to save for that housing. In developed countries banks loan you the money for the housing. Which essentially means that housing price is determined by how much money people make. The more money people make, the more the people selling the house demand because the banks are willing to loan them that money, based on their ability to pay the amount on their mortgage. So in essence housing always costs a significant portion of whatever you make. That then affects the pricing of land. Labor is also very expensive, at least legal labor. In California you have a lot of illegal Mexicans that you can use for cheap construction, but elsewhere labor to build housing is also very expensive because they expect to be able to function in the economy so they charge a premium for their services, unlike in the third world where construction workers are treated like crap. So to answer your question everything is expensive here and the cost is determined by how much money people make rather than some other value.

[branchless]

This guy gets it. And the corollary? No matter how efficient we get land will soak up all surplus wealth creation.

Land value tax.

[norea-armozel]

I use to be against LVT until I thought about the scenario where you have someone who buys a house cheap (probably a poor neighborhood) and renovates it. Under our current system of property tax, which depends on the assessed value of the property plus improvements, that inevitably prices home owners and renters in the neighborhood over time. Hence one of the reasons why gentrification pushes out the original residents from the neighborhood. And who gains? Those who do the improvements and those who bought the property before the up tick in valuation (and property taxes).

But under LVT, the tax stays the same whether or not you improve the property. Obviously, there may be some means to game the tax, but ultimately land speculation and gentrification wouldn't work out so well. Rents would still rise due to property improvements, but people would be able to justify those rents based solely on said improvements and not on some market bubble due to speculation. Plus, any improvements done by anyone (speculator or not) are not taxed any worse than those who can't afford or see no use for improvements. Ultimately, it's a more balanced approach to a real problem to be sure. Or at least it's one part of the solution.

[branchless]

It's a method that attributes reward to where the effort is put in, therefore you can be sure the rich hate it.