This is exactly what I mean-- I think also the whole housing affordability is just another side of this coin: Buying a home grew more expensive (in terms of median income) for decades, and that alone is a huge problem in my view, with no realistic solution that I can see (=> except demand implosion from a shrinking population, which would probably create twice the amount of problems that it solves...)
Housing costs in the western world is the root cause of everything. Housing costs on a monthly basis increase to take all income, because the demand for housing is higher than the supply.
You can't simply reduce your consumption, because you are reliant on everyone doing the same thing.
Rent controls don't help because that means housing simply has to be rationed in another way which is typically worse.
The solution is to increase housing supply in high demand areas.
Has anywhere tried rent taxes to fund new construction?
It'd need to be strictly tied with a viable building method, to limit NIMBY problems, but would accomplish the goal.
If rent for class Y housing is $A, and the target price is a lesser $B, then tax the $A-$B difference at a high rate, with 100% of the tax proceeds being used to directly fund new class Y housing creation.
If there's demand, companies will fund new construction. The problem is that planning, zoning, nimby restrictions means you can't
The invisible hand of the market certainly isn't all powerful, just like chickens aren't spherical and travel in a vaccuum, but when you stick it in a plaster cast as we do with housing, it becomes useless.
If you tax rental, what about owners? They won't care, they don't pay the tax.
> If there's demand, companies will fund new construction.
Not necessarily. Companies will fund new construction that gives them the best returns.
Because there are rarely luxury limits on what can be built on land, this results in the most square footage, luxurious house that the market will bear.
> If you tax rental, what about owners? They won't care, they don't pay the tax.
