Step 2 just isn't happening, at nowhere near the levels necessary.
Instead people are investing in housing as a "store of value" against inflation, maybe not even renting it out and just hoping it appreciates. This is driving prices sky-high.
Meanwhile local politicians and boomers support NIMBYism and oppose all housing developments, leading to a massive shortage in housing. Landlords love this as it increases the value of their properties, and developers don't care as they can sell the fewer houses they build for greater profit.
Whilst at the same time national leaders support mass immigration leading to a huge increase in demand.
Overall this rewards property owners and hurts working people and the economy (when people can't easily move to economically active areas, and have less disposable income). Ultimately harming social mobility and destroying faith in capitalism and private property as a whole (it becomes to resemble feudalism, destroying the idea that you can work hard and have a good life).
I am a landlord, I specifically bought a property that is zoned for more units so I can build more housing when I have money again in the future. My dad is a landlord, he is actively building. More units mean more money. You can support a larger population. As a former renter I want more units too. I hated paying 38k / year for a mediocre apartment in SF Bay.
>Meanwhile local politicians and boomers support NIMBYism and oppose all housing developments
This is 100% the issue. Build more housing. Allow smaller units and efficiencies for lower income residents. Get rid of some of the bureaucracy around building, so much of it is just implicit NIMBYism.
> Meanwhile local politicians and boomers support NIMBYism and oppose all housing developments
This is the problem - artificially constrained supply. Fix this and the lower prices will follow. Fix other things and you’ll just create further distortions and frustrations later on
Making more houses won't solve the problem - there will just be more houses to rent out at vastly inflated prices.
Renting houses simply shouldn't be such a profitable endeavor. There have been stories posted where hotels snap up apartment units for AirBNB because those make more money than hotel rooms. That should never be the case.
In the world of 20 years ago, I would agree with you. Renting simply wasn't profitable enough to be a problem back then.
However, in today's world where AirBNB is unbelievably profitable, more houses than ever can be put up for rent at extreme prices. It heavily restricts the housing supply in a way that wasn't possible before AirBNB came around.
AirBnB does throw a spanner in the works of the rental market.
But I don’t think there’s either an infinite pool of AirBnB demand or that every landlord is willing to put up with running an AirBnB regardless of profit (doing AirBnB is more a business than a passive investment).
Maybe limiting AirBnB in residential zones will contribute to the solution, but neither limiting the capital flow into housing nor limiting the number of new units built will ever work.
Instead people are investing in housing as a "store of value" against inflation, maybe not even renting it out and just hoping it appreciates. This is driving prices sky-high.
Meanwhile local politicians and boomers support NIMBYism and oppose all housing developments, leading to a massive shortage in housing. Landlords love this as it increases the value of their properties, and developers don't care as they can sell the fewer houses they build for greater profit.
Whilst at the same time national leaders support mass immigration leading to a huge increase in demand.
Overall this rewards property owners and hurts working people and the economy (when people can't easily move to economically active areas, and have less disposable income). Ultimately harming social mobility and destroying faith in capitalism and private property as a whole (it becomes to resemble feudalism, destroying the idea that you can work hard and have a good life).