When there is sufficiently supply, the price of a house / apartment goes down over time as it gets older (thus less attractive) and needs repairs. Eventually you have to tear it down and rebuild. Just like a factory. Or a car.
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I hear people saying "new housing is getting bought up as an investment vehicle, building more just helps the rich". Of course this is factually incorrect, but even more importantly, *in a world where enough housing gets built, housing is a depreciating asset, not an investment*.https://twitter.com/fchollet/status/1437566790565957632 …
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The price of housing only goes up because of artificial constraints that prevent supply from meeting demand. Housing works as an investment because we don't build fast enough / dense enough.
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Artificial restrictions on housing development are a regressive tax on the poor and a gift to the rich, period. It's wealth transfer from renters to owners.
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Imagine applying the "gentrification" narrative to any other asset, like cars. "Producing high-end cars is pricing the working class out of the market, they can't buy second-hand Toyotas anymore, we need to stop making high-end cars". It sounds insane.
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You know what actually increases the cost of cars? That's right, the microchip shortage. Because it introduces constraints that reduce the rate of production of new supply. Guess what? Housing works the same, but NIMBYs are the microchip shortage.
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I dont know about where you live, but here in Brazil, in most places there is more houses than people and even then prices only goes up, both for buying or renting, renting is even worse cause it is updated based on general inflation rate...
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That is why we have a lot of favelas...
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Also for the record Wall Street investors CITE the shortage of housing as one of the main reasons they continue speculating on real estate. They’re buying a scare every product because they know we refuse to build more. Building more housing will fix this.https://twitter.com/yimbyaction/status/1436345481861423129 …
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Home owners are in on it. For most it is their largest investment, they want its value to appreciate so zoning is designed to protect it.
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But is there enough available space to house everyone in big cities? One thing that needs to be changed is zoning laws. A lot of districts and cities have way to many zones that just allow single family homes.
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