It is kind of a bug, because otherwise how do you fix it?
Housing got set up as a pyramid scheme where the price keeps going up because supply is constrained, so younger people have to take out ever-bigger mortgages in order to have somewhere to live. Nobody wants the prices to be unaffordable until they buy a house, but once they do they're locked in to the high price they bought in at and want prices to go up even more. When you have a majority of people on the hellbound side of the line then you're locked into a death spiral that violently explodes once the prices get so high that the majority can no longer afford a home.
fixing it implies it is a problem in the first place. It isn't a problem.
There is no right to ownership of a property (despite it being called the american dream). As long as rental vacancy is sufficient to not cause mass homelessness, it isnt a problem. And if does become a problem, the issue becomes one of production of supply and density (related to allowed zoning), and not the price and taxation (of land).
And it is through the fight to afford to buy property that productivity and innovation can be forged.
> fixing it implies it is a problem in the first place. It isn't a problem.
Isn't it?
80% of people own a home, so they vote for policies that increase housing costs. Then 70% of people can afford to own a home, so they vote for policies that increase housing costs.
Eventually only 45% of people can afford a home, so the now-majority of renters vote for different policies. The entire edifice built on ever-increasing home values collapses because policies to support their continued increase are no longer favored by the majority. Without the expectation of continued price increases, speculators divest. There is a massive housing crash and all the people who did own a home end up underwater on their mortgages, but they're no longer in the majority so the now-majority only cheers because housing costs have finally come down and they're no longer paying two thirds of their income in rent. The now-underwater homeowners hand the keys back to the bank, because why pay a $500,000 mortgage when you can now get a house for $250,000?
That's a pending disaster. Maybe we should consider policies that get housing prices down in a controlled way, instead of causing a giant recession?
> There is no right to ownership of a property (despite it being called the american dream). As long as rental vacancy is sufficient to not cause mass homelessness, it isnt a problem.
"As long as there isn't mass homelessness, having landlords milk workers for everything they have is fine"? You get "can't afford medicine" and "can't afford nutritious food" long before you get homelessness. You get "can't afford to start a business" long before even those things. That's bad. That's a problem.
> And if does become a problem, the issue becomes one of production of supply and density (related to allowed zoning), and not the price and taxation (of land).
Those things are related. If taxation is higher then investment in new construction goes down.
Land value tax also does something extra weird. Suppose the annual tax on a plot of land is a million dollars. Meanwhile the amortized construction cost of putting one house on it is $30k annually, a 10 unit complex is $400k and a 25 unit complex is $1.5M annually, because taller buildings cost more per unit. Then the annual cost per unit with the LVT is $1.03M for the house, $140k for the 10 unit complex and $100k for the 25 unit complex. Even though the 25 unit complex costs twice as much per unit than the house to build, and 50% more per unit than the 10 unit complex, and even though the local population density may only require 5 housing units on each plot of land.
So the result is that you get a lot of 25+ unit condos/apartments, and then a lot of abandoned plots with nothing on them at all, because it's not cost effective to build on them unless you're going to build at least 25 units, but it's also not worth the construction cost of 25 units unless rents stay above $100k/year/unit. So you get enough towers to get rents down to the cost of the tower plus the LVT on the land under it and then construction stops because it both costs too much to build more towers (higher construction cost per unit) and costs too much to build smaller structures on the remaining land (LVT kills you with fewer units per plot).
> And it is through the fight to afford to buy property that productivity and innovation can be forged.
High rents cause poverty and crime, not productivity and innovation.
i'm up-chain from who you replied to. Thanks for typing that. You spent a lot more time contemplating this than I did; my comment was off-the-cuff. i find people tend to be blind to certain, "externalities". I am people, too, so sometimes i prod to get discussion going and learn something.
There are many other forms of government which are less subject to the influence of the people and their silly preferences.
If you don’t want to switch forms of government, formulating a holistic plan, addressing weaknesses in the plan, laying out how the transition will work, educating the people about it, and convincing them why your plan is better is what I’d recommend.
The general problem is the "democracy is two wolves and a sheep voting on what's for dinner" thing. If you can get at least 51% of people to vote for "I've got mine" then you've created a system of injustice. Which is nominally why we use a republic rather than a direct democracy.
But those checks and balances have been eroded over time, or weren't strong enough to begin with, so then the majority e.g. votes to constrain new construction because they value their own short-term financial gain over the greater harm they're causing to the minority.
And then the same dynamic plays out for some other issue, but this time you're in the minority and you take -50 damage instead of a +10 gain. So the problem is that it's in everyone's interest to stop this from happening in general, but only in the minority's interest to do it on any particular issue, and democracy in and of itself isn't structured to handle that.
Housing got set up as a pyramid scheme where the price keeps going up because supply is constrained, so younger people have to take out ever-bigger mortgages in order to have somewhere to live. Nobody wants the prices to be unaffordable until they buy a house, but once they do they're locked in to the high price they bought in at and want prices to go up even more. When you have a majority of people on the hellbound side of the line then you're locked into a death spiral that violently explodes once the prices get so high that the majority can no longer afford a home.