Most of you probably know the memes about homes not being affordable to younger generations. It is true, that they are, at least, less affordable as illustrated by Figure 4-1. The reasons for that however aren’t evil Landlords, who want to leech as much as possible. It is more a combination of several factors:
Years of Bad Politics™️ has led to too few houses being built and now there is a shortage. As any highschooler, after paying attention in economics for 30min, can tell you: low supply + high demand = bad for consumers
Following that, most young people want to live in big cities, preferably the few biggest ones. That puts additional strain on these local markets.
Another big contributor to this problem is that Homeowners want to keep the value of their homes up. Anyone wants their assets to rise in value. But since they are the ones who vote in local elections, they vote to keep houses expensive. That means weird zoning, no new Homes etc.
In defense of renting
Renting apartments or even Houses is a good concept. I pay some entity to keep my housing repaired, up to code etc. As a consequence I don’t risk most of my net-worth being deleted by a storm or similar. Renting is more expensive than owning on average, but renters have none of the risk that owning implies.
I personally like fixing and modifying stuff. That includes Computers furniture and Houses. However I also know a lot of people who don’t. They don’t trust themselves to drill a hole in a wall. For those people shifting the responsibility of fixing smaller things to a landlord can be beneficial.
It also frees people up to move around, when their job/life requires it.
Solutions
Build more houses.
Its that simple. Cities need to rezone and remove houses in favor of multi-family buildings or even skyscrapers. Houses in a city make no sense. You want to be in a city to have a lot of people in a small area. Why would you spread out everyone in suburban wastelands.
If you want a house yourself, go to rural areas. I know you nerds are spending your entire social life on the Internet. It’s probably way cheaper to get a fiber connection into the middle of nowhere than paying for city houses. “Mimimi, but there are no queer communities” Then start one. Imagine how powerful all you queer furries will be if you take your tech jobs remote and save like 70% of your housing expenses. Just don’t spend the extra cash on more porn.
I know that when I’m done with my degrees I’ll be building my lair where no ethics boards will find me. My machines will be efficient and my fungi growing fast.
If I have convinced you to embrace the hermit life, come join me. I am always in need of more minions.
so, sorry about wall of text, but nothing is a black and white in reality like that perspective on the marked. Love the hermit life tho! would join - currently living in a collective in a city myself.
So the economic problem of landlords is that they accumulate whealth - that they use to purchase up new housing before it’s buildt - this also ensures that the housing prices goes up; and as a requirement for return on investment - the rent goes up, even if you’re just renting the shitty apartment they’ve had for years.
building housing is a solution yes, but it’s obstructed by a lot (depending on your state/country) Like safety regulations; that usually are there to protect the inhabitants and the workers building it.
there is also the construction sectors economic motivations. There are no financial motivations to finish a project (usually), and instead the motive to actually finish the job would be on ensuring that you get new contracts. As long as the marked is that way for construction firms it will ensure that they take longer to build it, thereby increasing their profits, and actually have a job (as they are in essense work for hire)
and the stock marked: (forgive me, details lacking here as my knowledge is unuanced and especially lacking in the stock marked field.) the stock marked is tied to housing, construction firms, and land. And as the stock marked wants a line to go up as they also take out dividends off that, they invest money into it with the assumption that it will be profitable - this not only ensures that housing will get more expensive; but with the amounts of money invested the government also has a incentive to keep that housing marked expensive; as a crash would ruin the finances of not only quite a few individuals i would also ruing investment firms - and the companies that they invested in. Ie a housing marked collapse, like has happened in several countries the past few decades.
this is not an exhaustive list, but at least adds a few more reasons to housing expensive beyond they don’t build enough.
and yes, renting is in concept not a bad thing, but in reality the renter ends up with the risk of the owner not actually holding the house up to code. At least in my country - the only time the house is checked is when it’s sold; then there isn’t the incentive to actually keep the house in good shape; instead the incentive is to get cheap black marked labour to make it rentable to as many people as possible with using the least amount of money. which usually introduces risk most people would never accept in their own homes. like electrical fires (at least in my own experiences.)
(for note, I live in norway, so it’s not going to perfectly apply to all countries - though it should be somewhat similar)