There are two very simple policy strategies for ensuring housing is affordable:
(1) make it easier to build high density housing
(2) make housing an unattractive financial asset
Many have already talked about (1) but few understand (2) and what types of policies would promote it. This would include
- heavily taxing capital gains owning land (not taxing the improvements)
- limiting ownership to a very long lease (e.g. 99 yrs) similar to what they do in Singapore.
Both would be highly politically unpopular for the majority of Americans and therefore they do not get implemented. What people don't realize is that fixing the housing problem actually requires certain people to GIVE UP something:
- giving up the quality of your nice neighbourhood because a giant complex was built next door
- giving up much of the capital appreciation in your house because it appreciated
Both would be be highly unpopular for the majority of existing home owners. As a result everyone complains but politicians don't actually do anything and nothing changes. There is no such thing as additional affordable housing without any cost. There is a price to be paid. Most are not willing to pay it.
(1) make it easier to build high density housing
(2) make housing an unattractive financial asset
Many have already talked about (1) but few understand (2) and what types of policies would promote it. This would include
- heavily taxing capital gains owning land (not taxing the improvements)
- limiting ownership to a very long lease (e.g. 99 yrs) similar to what they do in Singapore.
Both would be highly politically unpopular for the majority of Americans and therefore they do not get implemented. What people don't realize is that fixing the housing problem actually requires certain people to GIVE UP something:
- giving up the quality of your nice neighbourhood because a giant complex was built next door
- giving up much of the capital appreciation in your house because it appreciated
Both would be be highly unpopular for the majority of existing home owners. As a result everyone complains but politicians don't actually do anything and nothing changes. There is no such thing as additional affordable housing without any cost. There is a price to be paid. Most are not willing to pay it.