"It's a complex topic, even details are left out in this long form article"
Some summary and factors...
Commenters have blamed:
- Vetocracy and NIMBYism reducing supply
- Federal reserve ownership of banks
- "housing cannot be both affordable in perpetuity and a good investment": the myth of a limited resource
- "Why is every new house a McMansion?" (Because a bigger thing has fatter margins, so it's beneficial to reduce the supply of smaller things. See cars and computers.)
Why fix it?
- So I can get a better home (my $300K is not enough for $1.2M houses)
- To get homeless people off the street (roughly 0.2% of people)
- To get more poor and middle-class people off renting into homes
- To reduce the incentives for the wealthy to manipulate the market
Correct driving factors:
- Mediterranean climate is rare
- "Values go up because of density changes related to location desirability"
- "You're making a bet that worker productivity will improve near you"
Additional amplifying factors:
- Home loans are recourse-free: if you go underwater, the bank loses, not you.
- Difference in market power between investors and owner-occupiers
- Owner-occupiers are forced into a location, and have to buy something
(or rent)
- The home has to appreciate at a rate higher than the after-tax cost of property taxes
- The Republican's recent cap on property-tax deductions made this equation worse
- For nice homes, the property taxes alone can be half the median rent
- Renting and buying are not perfect substitutes
- Most rentals are small, and not in good school districts
- Most houses are large, so rents are only sensible for large families or wealthy
- Most jurisdictions exempt single-family homes from most restrictions on rentals