A big problem that divides us is property renters versus owners: owners have spent the last several decades restricting access to property, and that's now raised the cost of the most productive metro areas to unacceptable levels: https://www.theatlantic.com/business/archive/2012/03/the-ren... Many millions of people, especially but not exclusively the young, have in effect been gated out of prosperity.
Is it fair if people can be restricted from competing in the property markets by people who faced no such restrictions themselves when acquiring that land capital. Zoning licensing, etc.
The elephant in the room is that for most people the majority of their net worth is tied up in housing (property) and as interest rates drop the nominal value of this property increases way faster than the nominal wages of labor. This property can then be used to create information insensitive debt that ignores any notion of liquidity at an artificially higher nominal value. This debt is then used to pay wage-labor who increasingly cannot acquire property themselves. At the end of the day, only real property is wealth (land, ip rights, equity, collectibles, and machinery) and labor is denied the opportunity to earn a larger share of property themselves. Any solution is politically difficult.
I agree that there is an issue with housing being so inaccessible to labor. In my city, even with a six figure salary, it's hard to buy something alone. You increasingly need two six figure plus salaries to make it work. IMO, part of the problem is that everyone views housing as an investment. People trade real estate like trading cards. We forget that homes have a more fundamental purpose (to house people).
If you can't afford a home, as a way to get your foot in the door, you can buy ETFs on the stock market. You can also buy REITs as a way to invest in real estate. There are even diversified REIT ETFs. It's like being a landlord, you get paid dividends, but you don't have to lift a finger. If someone has some money on the side but can't yet afford property, this is a relatively safe way to get into investing and the real estate market IMO.
The unfortunate difference though is that mortgage rates are subsidized by the government, interest rates are kept artificially low. If you get a mortgage to buy a property, it's effectively leveraged investing. You pay a small downpayment (as low as 10% nowadays) and you're basically investing with someone else's money. You can't do that with REITs. Nobody will lend you 10X your downpayment at 2% interest to buy ETFs. If you can't afford to own property, you are denied this leveraged investing opportunity.
Personally, as a condo owner, I would be OK with condo prices not going up. As prices increases, so do my taxes. I can just invest in the stock market. I don't need my home to be an investment, I just need it to be a comfortable place to live.
You would think this would be front and center in any election, next to the destruction of quality jobs that prevented the same young people from getting on a good career path. And yet, the two gigantic elephants remain entirely unobserved.
This same problem does not exist in many places where urbanization is much further along than it is here, which would lead me to question whether it was the primary factor at work.
The issue isn't low standards of living in dense US cities but the lack of affordable housing. If you want an international example of providing affordable housing in an area with very high property values, Singapore accomplishes this with the government-run HDB apartments.
If I want a fancy beer from Holy Mountain, I need to live close to it, or make big travel plans to get there. The same applies for each thing I might want to do. Living nearby lots of other people minimizes my distance to each of those things, so I avoid wasting money and time on travel.
It would be cool if Georgism or at least Land Value taxes made a bigger come back. My hopes are low after seeing Prop 15 fail in California though. I think we're sadly not even close to the breaking point. It will probably require the proportion of renters:owners to increase among older people.
it is free market at work. private property rights is the cornerstone of capitalism and free market. if you want land for all, then its no longer capitalism.
land/property ownership is not a right. access to housing for those who cant afford it should be provided by the govt. many countries do this. at least in california, high property values is favoured by the govt because it is a sure source of property taxes.
a lot of issues can be sorted if high rise affordable housing can be built outside expensive zipcodes and create a good public transport network.* instead, (here in ca), they are building 'affordable housing' inside the most expensive zipcodes and increasing toll roads and hiking tolls...and not improving public transport systems. looks like this is what the govt wants.
That is an incorrect framing of the problem. People do not want land, they want residential units. Strong demand can be handled by building up. Making it possible to build up where land values are high would solve a lot of problems.
California high speed rail is a different, specific, and complex system to evaluate. Just to throw out one major issue there is increasing demand for travel between LA and SF but capacity of existing roads, air corridors, railways, and ferries is already approaching fundamental limits. Space for roads is limited so the only other real option is more airports everywhere which might end up being necessary either way.
People want to own residential units. Ownership is and should be more expensive than occupancy.
A residential unit also needs power, sewer, water, schools, fire dept, police dept, parks and recreation, sanitation and other services, transportation, commerce, infrastructure and roads. And staff to run all this. Building up vertically on a x30 multiplier doesn’t mean that city can provide all the services and access resources to service the multiplier effect of said parcel of land. This is why high density cities end up being unaffordable.
If high density cities are built up to accommodate more affordable homes and below market value homes, the residents effectively pay negative taxes by benefitting more from the city than they pay in as taxes. The math doesn’t work out. If it did, we would have more townships with high density as well as affordability..and cost of living going down. But in my observation,such things never happen. At least from the data I had collated from Bay Area cities. I would love to be proved wrong.
The only way..as I see it..high density home ownership can be feasible is if we have clustered communities between 150-300 households and each of the homes comes with assured employment. It’s closer to ‘company towns’ or military townships.
> Building up vertically on a x30 multiplier doesn’t mean that city can provide all the services and access resources to service the multiplier effect of said parcel of land.
You're right, all the services are more expensive per square foot of land. But, it's more efficient per person, and per square foot of property, to provide those services in a smaller area. Cities are more expensive because of simple supply and demand: a lot of people want to live there, and there's a limited amount of property.
US capitalism is based on the government taking land away from people that aren't developing, and giving it to new owners though.
That's the argument people give for why it's ok for the US to have taken land from the indigenous peoples at least. I think it's reasonable for the government to seize any property that has only been used for collecting rents within some timespan, and reallocate it to somebody who wants to make actual use of the land
Matt Yglesias's new book One Billion Americans has a good discussion of the issue: https://nymag.com/intelligencer/2020/08/one-billion-american..., even if you don't buy his population-based premise.
Until we can free our land markets, we're going to have a lot of political problems caused by people who (correctly) feel they can't afford to live.