The article is a bit strange. In my opinion it accurately describes a problem, but then totally fumbles on the reason and the solutions. The real reasons are d

The article is a bit strange. In my opinion it accurately describes a problem, but then totally fumbles on the reason and the solutions. The real reasons are described by narrator and kephra in this comment thread. They've got to do with how land is scarce and getting scarcer, and how banks leverage the demand almost without risk and in perpetuity. If you don't really get the economics of it, it comes down to this: property owners negotiate with you one (important) aspect of your life (where/how you live) for a percentage of all income you ever make. Imagine the scale of that nationally, it's really not surprising to learn that property is the largest share of income for capital. I've been thinking about this reason a lot since I've started reading Piketty and perhaps more so now I'm looking to buy a house in one of those super scarce places. An interesting point Piketty makes at some point that this form of capitalism is fundamentally un-American, or at least, against the idea of the U.S. in its forming years, but you'll have to read the book for that. I promise you he's not a socialist ;) The solution that came to me, even though it would screw me if it were implemented, is capping mortgages even stronger. In the Netherlands we are moving to a 100% home value cap in the coming few years, and gave them a max duration of 30 years, that fixes one side of it. But it should also enforce lower limits on mortgage relative to salary. Perhaps those values are already closer to what's right in The Netherlands than they are elsewhere. In Amsterdam you pay 220k for a small 2-bedroom apartment or small house on the edges, which costs you about 35% of your income (if you maxed out). Those regulations give way to another problem though, and that's rent. They definitely should be regulated the same way. At the moment that same apartment in Amsterdam rents for about 1300, almost twice to what a mortgage would cost. And I know for a fact that people who aren't allowed the mortgage do rent those places instead, that's just draining capital. Maybe some (amateur) economist can poke a hole in my plan (reduce mortgages and rents through regulations). I have a feeling there is a right level of regulation that will make mortgages comfortably profitable for banks without it squandering the publics spending power.