this post was submitted on 11 Nov 2023
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It should.
It doesn't in the U.S. At least, for the past decade or so
That’s because zoning laws are keeping new houses from being built and causing there to be not enough supply of housing.
Then how do you explain the fact that when you count up the single family, and multi family homes that have sat empty for at least 12 months, you end up with a number that is 72:1 times higher than the homeless population of the US?
We only build luxury housing, and that gets snapped up by investors, and left to sit empty and rot. Meanwhile we have about 1.5 million people that sleep outside, and get harassed by practically everyone.
Yes, this is another issue, with corporations and investors buying up properties as an incestmen. It needs to be stopped as well
How much supply is needed to bring the price down then?
While I agree that in general there is a problem with zoning laws making it all but illegal to build anything other than single family homes, markets work in such a way that the price is based on what people are "willing" to pay. Where a home is a fundamental necessity, this is already problematic. Nevermind the huge increase in access to money (the advent of mortgages and all of the policy surrounding them) driving up the demand side of the equation.
So when the options are: Homelessness (kind of illegal) Renting (very expensive) Buying (even more expensive)
Foregoing any participation in the housing market isn't really an option.
As a side note: the simple supply/demand model is from econ 101, and I really think it's unwise to make decisions based on first year university textbooks.
Of course, the supply of housing is not the only factor. Another is the investors buying up property which you mentioned, and the fact that people selling houses just know that they can get away with high pricing. Both of these need to be fixed, in addition to the low supply of housing.