It facilitates offloading overpriced assets to younger bag holders with insufficient buying power due to stagnant wages and lack of economic potential.
So, unfortunately not.
(increasing supply would take targeted capital cost reduction, monopoly busting around new home builders and their land acquisition partners, and rapidly increasing the trades labor supply by hundreds of thousands of workers in the near term without immigration; none of this is likely to happen within the next three years)
> It facilitates offloading overpriced assets to younger bag holders with insufficient buying power due to stagnant wages and lack of economic potential.
As someone who holds excess capital this makes me so hard.
China has built enough housing for everyone who will ever live in China, because they overbuilt during their housing frenzy [1] and they’ve reached the decline of the population curve where more people are dying every year versus those being born. Japan has more housing than people because their population has also reached the population curve decline [2], and will continue to decline forever (creating surplus housing supply). We need enough housing to cover peak population in each country [3], but also a system to lock out investment from front running humans for the ownership. Otherwise, Capital will consume housing while also trying to destroy jobs with offshoring, AI, and automation. To those who say, “just build more,” well, let me know when you’re going to show up to pour a foundation and start framing, because the evidence is robust in the US we’re having a heck of a time building more supply. You have to build more (which includes supply chains for affordable materials and a constant supply of tradespeople), and what you do build, ensure that supply gets into the hands of folks who need affordable housing (instead of housing anyone under 40 cannot afford, or entire built to order subdivisions by investors that are going to be rented out). The political will is lacking, because strong policy intervention will be required.
If immigration in flows to the US have mostly stopped due to this administration’s policies, ~2M+ people a year 55+ die every year, and ~3M people turn 18 every year, assuming a continuing declining total fertility rate (currently 1.6 and continuing to fall) and smaller family formation (couples and families with only 1-2 children, if any, versus families >4), what is the target build rate and the delta to get there? You can either build more, destroy demand, or some combination of both.
I’ve seen various reports that the housing shortage is anywhere between 2M-8M units, but I think Fannie Mae’s estimate of ~4M is likely the most accurate [4]. I’m a big fan of the Vienna public housing model [5], but again, political appetite is lacking to implement.
Buffalo NY used to have twice as much housing as it does today because it had twice as many people, but housing doesn’t just persist if it isn’t needed and used, it decays quickly and disappears. If everyone wants to live in a few hot cities in China, it doesn’t matter if Kangbashi in Ordos Inner Mongolia has a bunch of vacant apartments.
Even if the US builds more, how many more people can we fit in Seattle, San Francisco, New York City? We have to build in Buffalo, Toledo, Shreveport also, but getting people to live in those cities rather than bid up housing in the former is impossible without some sort of residency control (like Chinese hukou which no longer works well there either).
We know what happens when population begins to decrease, you get some affordability in Tokyo and even more in places where people are moving to Tokyo from. Could that work here? Maybe.
I think it’s almost impossible to build enough housing so everyone can live exactly where they want (unless something drastic happens with regards to policy, capital, construction, etc, think New Deal but targeting housing), but also think it’s entirely possible to have enough housing stock so we don’t have hundreds of thousands of people homeless. I cannot predict what the next few decades look like unfortunately, and how long it will take for demographics to ease housing pressure.
(I cannot speak to Buffalo, but I donate to A Tiny Home For Good, which provides housing for the disadvantaged in Syracuse; I strongly believe their model would scale given appropriate resources, as it relates to homelessness)
We really screwed the pooch on remote work, which would have made it less important to live in “the hot city” and would have let people live in Toledo or Buffalo if they wanted.
There are multiple categories of homeless people, with some (the most visible ones) choosing what cities they are unhoused in. Seattle (where I live) is never going to be able to house all of them: the more money we throw at the problem (and we spend a lot!), the worse it gets for obvious reasons. It is much easier to solve homeless problems in a city that isn’t a destination due to climate, social services spending, or drug availability. We do lots of tiny home villages here also, they cost around $100k/year/unit to run, which doesn’t make sense, but that’s what the non profits are charging and what the city/county are paying.
> We really screwed the pooch on remote work, which would have made it less important to live in “the hot city” and would have let people live in Toledo or Buffalo if they wanted.
> This paper studies the significance of migration in evaluating the welfare impacts of remote work. By analyzing individual location history data, we first document an increase in net migration towards suburbs and smaller cities in the US since 2020. We demonstrate that the migration wave has been disproportionately fueled by high-income individuals, who were more likely to move due to remote work. Consequently, regions with substantial in-migration observed the greatest rise in housing expenses. This also led to changes in local demand for services and associated employment. Employing a stylized welfare accounting framework, we show that migration mitigated the increase in housing cost burdens for both high- and low-income groups, with the advantages being greater for low-income individuals. Conversely, dispersed job growth, as a result of migration away from major urban centers, curtailed the increase in job accessibility, especially for high-income groups. Factoring in the spatial impacts of migration on housing costs and job accessibility, the welfare inequality surge related to remote work is considerably tempered.
