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Simple and it's already happening - stop buying homes to force prices down. Simple supply and demand with aggressive consumer withholding. Don't play the game, then the game has to be rewritten.
Why shouldn't the solution be to relax rules of what can be built? Why shouldn't lots be upzoned from single family to multifamily so the same space can house 4 families instead of 1, for example?
Let builders build more and prices will naturally come down.
I would agree with this approach, and much more of it is needed. The resistance here comes from existing homeowners and residents with a NIMBY attitude that higher density housing brings down existing home values and neighborhood appeal. This is something people are going to have to get over. Again, the consumer American Dream of the picket fence has to change.
You might find this post humorous, haha
It is funny, but also dated.
I literally have this already with my home bought in 2002. While I have a two-story, the neighbor behind me has the same. So their bedroom window looks down on my backyard the same way as this cartoon.
My house was bought for $290K in 2002. It now goes for $625K, with this density, simply because supply in the area is so pinched, no one is selling, and buyers are rabid trying to find something cheaper than further west in Los Angeles. Crazy times.
It was from a collection of documents between 2018 and 2026, so fairly recent.
NIMBYism is alive and well, especially in the single family neighborhoods of West LA
That's letting the market work it out. I thought that wasn't a realistic option.
I agree. It's a drastic approach. And it's one people will have to take when the market and government won't do anything to help because they are too interested in their short-term benefit versus long-term community stability (the other point I was making in my original post).
I agree the government won't do anything to help, but not for the reasons you state.
The government literally sustains itself on high real estate appraisals. It's long-, short-, and medium-term interests are to have real estate prices stay artificially high. To that end, they restrict the market from adding supply, which those greedy profit maximizers would be happy to do.
There's nothing special about the housing market that prevents normal market mechanisms from working, other than the peculiar mix of government regulations, taxes, and subsidies.
Not quite. Local government gets a big piece of the pie upfront with development fees before building can even start. Then they take property taxes after the fact, in addition to income tax and company tax on income from the businesses involved, as well as title transfer fees during recording. The appraisal is critical for a different reason; at least out west, by law on how much property tax can be charged, so the appraisal is the only way to raise the taxes higher since it's a locked percentage of property value. Yet that's not the impact to the buyer, it's the impact to who is already the property owner.
I'm talking about general public finance, not the what happens at the point of development. Property taxes typically make up the bulk of local government receipts, so they are incentivized to prevent market corrections to high real estate prices.
I'm not arguing that there would be no issues on a perfectly free housing market, just that we aren't currently operating in one and artificial scarcity is enforced by the state so we can't even observe what the market is trying to do. You can get a glimpse, though, by comparing the expensive highly regulated markets to the cheaper less regulated ones.
What do you propose to do? Whip people until they get less greedy?