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Because it doesn't actually work. It helps a tiny little bit, in the places that are actually somewhat constrained (like SF/BayArea specifically). But it's not

Because it doesn't actually work. It helps a tiny little bit, in the places that are actually somewhat constrained (like SF/BayArea specifically). But it's not any kind of significant fix. Housing is an investment asset for stock market folks, it doesn't follow a Econ-101 understanding of "supply" and "demand" in any meaningful way. The Midwest and the South are both way ahead of California on the whole "just build more housing" thing, for example, and have been for many years. And yeah, it makes us somewhat cheaper than a coastal city if you have California dollars to burn. But our Price-to-Income-Ratio's are still in the high 5-7+ range too, just like everywhere else. We have basically zero population growth, and every single stray piece of land is getting built on right now (record high construction, record high new housing starts, for the past three years straight) and housing prices still rise 10% to 15% every single year like clockwork, with no end in sight. "Just build more" sounds really pretty, but that alone will never get housing prices back down to a real-world-affordable figure for most people.

marvin 5y ago
Are you saying that if the housing market has 10 million homes and 7 million people live there, prices will continue to appreciate to stratospheric levels because someone will magically appear to buy the excess 3 million properties and leave them without tenants? That's what it sounds like to me.
- newaccount2021 5y ago
  there will never be a market with 1/3 of homes empty and surplus - where do the builders get the capital to pay for land and construction?
- BirdieNZ 5y ago
  That does actually happen; see China, for example.
taurath 5y ago
We don’t build enough - density levels are extremely low compared to much of the world. Most US cities have a small downtown dense area and are surrounded by single family homes. Even the Bay Area is something like 80% single family zoned. NYC on the other hand is a good example of what you’re talking about - it’s expensive to live there and pretty dense already. But Tokyo for example had 150k housing starts on a recent year, which is more than LA, NYC, Boston, and Houston combined (source: https://www.google.com/amp/s/www.wsj.com/amp/articles/what-housing-crisis-in-japan-home-prices-stay-flat-11554210002 https://www.google.com/amp/s/www.wsj.com/amp/articles/what-h...) - amp link to get around paywall. I think there’s tons of evidence that we just don’t build enough myself. In bangkok, another market, they’re throwing up more new tall buildings every year than almost the entire USA does.
resonantjacket5 5y ago
> Housing is an investment asset for stock market folks, it doesn't follow a Econ-101 understanding of "supply" and "demand" in any meaningful way. You are partially right that Econ-101 doesn't explain it well, but if you take Econ-201 it does explain how housing supply/demand works. Why it doesn't work as easy as 101 is that the location matters for the 'good' unlike say cars which can be shipped in from anywhere. And also zoning artificially constrains land from being used for housing.

marvin 5y ago

Are you saying that if the housing market has 10 million homes and 7 million people live there, prices will continue to appreciate to stratospheric levels because someone will magically appear to buy the excess 3 million properties and leave them without tenants? That's what it sounds like to me.

newaccount2021 5y ago
there will never be a market with 1/3 of homes empty and surplus - where do the builders get the capital to pay for land and construction?
BirdieNZ 5y ago
That does actually happen; see China, for example.

taurath 5y ago

We don’t build enough - density levels are extremely low compared to much of the world. Most US cities have a small downtown dense area and are surrounded by single family homes. Even the Bay Area is something like 80% single family zoned. NYC on the other hand is a good example of what you’re talking about - it’s expensive to live there and pretty dense already. But Tokyo for example had 150k housing starts on a recent year, which is more than LA, NYC, Boston, and Houston combined (source: https://www.google.com/amp/s/www.wsj.com/amp/articles/what-housing-crisis-in-japan-home-prices-stay-flat-11554210002 https://www.google.com/amp/s/www.wsj.com/amp/articles/what-h...) - amp link to get around paywall. I think there’s tons of evidence that we just don’t build enough myself. In bangkok, another market, they’re throwing up more new tall buildings every year than almost the entire USA does.

resonantjacket5 5y ago

> Housing is an investment asset for stock market folks, it doesn't follow a Econ-101 understanding of "supply" and "demand" in any meaningful way. You are partially right that Econ-101 doesn't explain it well, but if you take Econ-201 it does explain how housing supply/demand works. Why it doesn't work as easy as 101 is that the location matters for the 'good' unlike say cars which can be shipped in from anywhere. And also zoning artificially constrains land from being used for housing.