this post was submitted on 30 Sep 2024
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Exactly. This has nothing to do with MPs being landlords. Any government that crashes house values will never be reelected. That's why all measures taken to date have avoided doing that β for example the reintroduction of 30-year mortgages, undoing a change that was introduced to prevent house prices from growing too high. The only long-term solution is of course for prices to come down (which can only be achieved by massively increasing supply) but most homeowners don't want that and will vote against it.
Supply needs to increase, but it can literally never increase enough given its current structure of investors and profiteering.
As long as houses are bought by investors (anyone with two houses), then it means that normal people will be priced out as the investors push prices up higher than they should be. If house prices drop they'll invest in building less housing. This is compounded by most new housing being multi-unit buildings that a single person cannot build on their own. When we had urban sprawl, you could still buy cheap land on the outskirts and build your own house if investors stopped building new developments, but with (very necessary) greenbelt policies, it eliminates that release valve, putting the housing market basically entirely in control of investors who'll keep it inflated to profit themselves.
That release valve you speak of is unsustainable due to infrastructure and transportation costs. It only works up to some level of sprawl.
Correct, which is why it has to be public investment. We need massive multi unit buildouts funded by new public spending. All of it durable, cheap affordable housing. This will not only act on prices via increasing supply, it will also act by bidding prices down because the prices will not be maximizing profits. Whoever wants a place to live, should be able to afford one of thes units. Let the market sort out prices and availability of more premium options.
Completely agree. Greenbelt policies are necessary for environmental and infrastructure reasons, they just also cause problems from a housing affordability / market elasticity standpoint, which we haven't addressed at all.
I do generally agree with this approach, though I think that a) as long as units are up for private ownership, it will make sense for investors to buy them up and hold them, you do also need to pair this with both vacant property taxes and ban investors from buying government built housing.
And b) it also won't work if the government only builds out the bottom of the market. Like we're seeing right now with the condo market, if you just build shitty units that people don't actually want to live in, then people won't really consider them part of the same market and any effects their supply has won't spread widely. If the government actually builds out livable Habitat 67 style buildings and units that middle class people would want to live in then it will be most effective.
Oh yes units like this should be non-market or heavily insulated from the market / regulated, etc. Basically all the things you said.
As for the quality of units, when I say cheap I don't mean shitty to live in. For example the current luxury condo units being built are expensive to build but shitty to live in. Money is spent on using flashy materials, trims, ceiling to floor windows that are difficult to insulate and last less. Not on larger units that are comfortable to live in. You get a luxury shoebox. If you look at some buildings from the last century, you can see much simpler construction cheaper materials but 1400 sq ft units that you can raise a family in. I live in one built in the 70s and it's in perfect shape today. Many families with children live here. That's what I mean by cheap and durable construction. I guess I should have added the family-sized qualifier. π