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There's a simpler solution: let people build. Relax zoning restrictions. If you don't constrain the housing supply, real estate will cease being a good investme

There's a simpler solution: let people build. Relax zoning restrictions. If you don't constrain the housing supply, real estate will cease being a good investment. Houses should depreciate in value in time, just like cars. When this happens investors will not elbow out anyone, because there will be no investors, just like there are no investors in cars.

zeroonetwothree 4y ago
Land will appreciate because, as they say, they don’t make more of it. As long as population keeps growing, demand for land will increase.
- ddulaney 4y ago
  Yes, for sure. But if you can easily build 20 or 10 or even just 2 stories on top of it, land value decouples from housing value (not all the way, but substantially). And for most people, housing value is what really matters; land value is secondary.
  - larsiusprime 4y ago
    Land value is actually enormously important in the economy -- it's 1/3 of the value of all real assets and probably represents a similar amount of bank loans (real estate itself is 2/3 or real assets and about 2/3 of bank loans). http://gameofrent.com/content/is-land-a-big-deal#is-land-a-really-big-deal http://gameofrent.com/content/is-land-a-big-deal#is-land-a-r... Relaxing zoning laws and allowing for significantly more supply IS very important -- but it's not sufficient by itself. (For the record, neither are Land Value Taxes sufficient). The true solution is to enact both: https://progressandpoverty.substack.com/p/land-and-the-liberty-to-build-on https://progressandpoverty.substack.com/p/land-and-the-liber... If you want to be able to consistently decouple housing value from land value, you'll need both of these policies.
    - credit_guy 4y ago
      > Land value is actually enormously important in the economy -- it's 1/3 of the value of all real assets and probably represents a similar amount of bank loans (real estate itself is 2/3 or real assets and about 2/3 of bank loans). That's just consequences of the artificial scarcity of real estate. Real estate should be a much smaller fraction of the economy, and land value too. Once real estate stops being an investment, mortgage debt will be just like car loans, an important segment of the credit markets, but by no means the gargantuan size that it is today. And once land value drops from 1/3 to 1/10 of the real estate assets, then the difference between Georgism, Marxism and Neoclassicism will become academic (as it should be).

zeroonetwothree 4y ago

Land will appreciate because, as they say, they don’t make more of it. As long as population keeps growing, demand for land will increase.

ddulaney 4y ago
Yes, for sure. But if you can easily build 20 or 10 or even just 2 stories on top of it, land value decouples from housing value (not all the way, but substantially). And for most people, housing value is what really matters; land value is secondary.
- larsiusprime 4y ago
  Land value is actually enormously important in the economy -- it's 1/3 of the value of all real assets and probably represents a similar amount of bank loans (real estate itself is 2/3 or real assets and about 2/3 of bank loans). http://gameofrent.com/content/is-land-a-big-deal#is-land-a-really-big-deal http://gameofrent.com/content/is-land-a-big-deal#is-land-a-r... Relaxing zoning laws and allowing for significantly more supply IS very important -- but it's not sufficient by itself. (For the record, neither are Land Value Taxes sufficient). The true solution is to enact both: https://progressandpoverty.substack.com/p/land-and-the-liberty-to-build-on https://progressandpoverty.substack.com/p/land-and-the-liber... If you want to be able to consistently decouple housing value from land value, you'll need both of these policies.
  - credit_guy 4y ago
    > Land value is actually enormously important in the economy -- it's 1/3 of the value of all real assets and probably represents a similar amount of bank loans (real estate itself is 2/3 or real assets and about 2/3 of bank loans). That's just consequences of the artificial scarcity of real estate. Real estate should be a much smaller fraction of the economy, and land value too. Once real estate stops being an investment, mortgage debt will be just like car loans, an important segment of the credit markets, but by no means the gargantuan size that it is today. And once land value drops from 1/3 to 1/10 of the real estate assets, then the difference between Georgism, Marxism and Neoclassicism will become academic (as it should be).