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Let me give you an exercise in thought so you can see that just simplifying it into "dEmAnD vs SupPly pRobLem" is incredibly misleading. Imagine there is one p
by Valakas_ 5y ago
Let me give you an exercise in thought so you can see that just simplifying it into "dEmAnD vs SupPly pRobLem" is incredibly misleading.
Imagine there is one person that owns 99% of the worlds wealth. Now, is there demand for housing? You bet. That guy wants to buy all the houses he can. If they build more, he will buy them too. No matter how much supply you offer, the demand will be there. He will buy anything. Now replace wealthy guy by corporations, REITs and wealthy people (who would own not 99% but ~90% of the world's wealth) and entertain me how increasing supply fixes anything.
- harryh 5y agoYour thought exercise is interesting, but not in the way you think. Property owners do, in fact, conspire with each other to prevent the construction of new housing (via zoning laws). They do this, as you say, so that they can get richer. Allowing them to get away with it (by denying the fact that there is a supply problem) plays right into their hands. What we need to do is thwart their scheme and, through better government, legalize the construction of new housing so that wealthier people who own much of the existing property stop seeing artificial government created gains in the the value of their housing because they've conscripted the government into their cartel.