What happens when housing prices go down?

> Where have we seen anything close to 'build more'? Regulations in many major cities have prevented building more for decades and I haven't seen any loosening of these regulations (they were only increased during the Biden administration).

Housing prices are high everywhere, not just major cities.

Interestingly, in my state we have a lot of land for building houses if you drive to nearby cities. Some people uproot themselves and move 30-45 minutes away so they can have a much bigger, nicer, newer house. Most often when they start a family.

If you’re willing to move an hour away you can even get these big new houses for very affordable prices.

Many people don’t want that, though. They want to live in the city. So these big new houses remain cheap, while housing in the city remains expensive.

It seems like an easy solution would be to start knocking down houses in the city and building tall, dense buildings. Except that is happening, and the same people don’t want those either. Even condo complexes are having a hard time selling units.

What people here continue to want is the one thing that cannot be scaled: Full houses of their own that are in the city. No amount of demolishing buildings and building density will fix that, because it’s not what they want.

I was completely wrong in guessing that COVID and remote work would help housing prices by allowing people to move anywhere. Most of the people I knew who relocated due to remote work took the opportunity to move toward cities where their friends lived, not to cheaper areas.

I think we must continue to build, though. Eventually new cities and interesting locations will be bootstrapped. I think housing prices in popular areas will remain stubbornly high, though.

The problem can not be solved by trying to manage supply or demand. We must ban the concept of the landlord entirely.

https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-...

A landlord gets a loan from a bank to develop a residential property. That loan is paid by the tenants who live in that property. At the end of the day, the landlord owns the property. This is fundamentally unjust. If the tenant paid off the mortgage, they should own the property, or their portion of it.

Can you imagine this for anything else? Imagine I got a loan to buy a television. The television is yours in every sense but in the legal sense. It is in your home. You are the only person that uses it. Over time you pay me back the cost of the TV, and some extra for interest. Yet, even after you have paid me back, you have to keep paying. It’s still my TV, and will be forever. If any month you don’t pay, I can come and take the TV away.

Another way of looking at it is that a residential development in a high demand area is basically a guaranteed money-fountain. Banks buy them and gift them to whoever they choose. They always choose people who are already wealthy and low-risk, causing an increase in wealth inequality. A bank could choose a homeless person instead for such a low risk project.

Another idea is to only allow renting when it is rent-to-own. A developer may build a large development, but over time that development will eventually become a co-op.

Remove profit motive from housing entirely. When the only interest someone has in a home is living in it, prices will make sense.

You know what always happens when the status quo everyone is depending on to get money changes? People freak out and they overreact. Everyone loves it when they can keep doing the same thing and make money and they hate it when it looks like that is going to change. You what what always happens a bit later? They adjust to the new normal and make money slightly differently and then get used to that and don't want that to change.

The sky is not falling. Let's keep moving towards what will benefit everyone and not get distracted by the totally predictable reactionary market signals.

We all know it’s just a big game of lies and charades in which the winners keep winning and control the message and the policies.

Without renters there would be no housing Ponzi scheme, so gotta keep the renters renting.

Obviously the landlord offers something of value or the tenant would just do what the landlord did.

Your analogy is also somewhat unfortunate since people did, in the past, rent TVs! Now that supply is far greater than demand, a quality TV can be purchased for very little money.