Land prices rise with income but housing constraints mean each family needs more land. Just look at the rental market in austin collapsing 20% while incomes continue to rise to empirically falsify your working paper.
I don't think you understand LVT based on this "not to mention the political debates/decisions over what constitutes "fully utilized"."
LVT doesn't require any such determination.
Anyway, I'm not opposed to the solution you mention as well. We should subsidize supply of housing, and supply at any price will serve the same purpose of driving prices down, so yes I agree we should build public housing for higher price points.
i no longer buy the YIMBY argument as the sole reason we have a housing crisis. it's a very convenient narrative if you work in/around real estate and a lot of smart people have been duped by it. we had no problem in the past building housing with current regulations: https://fred.stlouisfed.org/series/HOUST
to be clear, regulations is part of the problem in some markets but not everywhere. how are local regulations causing a housing crisis everywhere? this problem is happening everywhere, and local municipalities across the country didn't coordinate to cause this.
they stopped building after GFC bc it was too risky. market dynamics, the profit incentive, and now the cost for labor + material + borrowing costs is the problem.
Public housing is very good, but I want to encourage a mindset shift. There are many plausible housing policies, and they are not in competition with each other. We should have public housing and we should follow the neoliberal abundance agenda and we should implement a LVT and we should do many other things. None of these policies somehow makes it difficult to implement the others. There's no tension. If anything they work in harmony. A LVT can be used to fund public housing, and neoliberal deregulations will also assist in making public housing cheaper for the taxpayer in terms of land use efficiency. If we care about housing, we need to get over these factional battles that only serve the landowning class.
If loads of housing is built and the price of housing starts dropping, firms won't want to invest in housing because they'll lose money. Unfortunately, a lot of politically active home owners also want to keep the price of housing from dropping so this is a harder thing for local governments to put into practice.
Same reason anything else keeps getting built when the price drops. Builders are not investors. As the price drops the cost of acquiring new land to build on also drops. As long as a builder has a margin between land + construction cost, they will build.
A huge part of the cost of building a house right now is the excessive regulation. By deregulating we will be able to build houses for less money and so builders will be able to sell them for less money. In addition apartments and especially larger apartment buildings are straight up illegal in many areas even though demand is high. Legalizing these units which are much cheaper than SFHs would allow all housing prices to decrease as some of the people competing for SFHs instead buy a condo.
Because if you get zoning out of the way, we can keep building, and keep building, and keep building.
Let them keep buying. But if we build enough, they won't be able to rent it all out. Are they going to keep buying to control the rent-able supply forever? No, they'll run out of money before we run out of buildable land. (Maybe not before we run out of wood, shingles, and labor though...)
And then you're left with huge ghost towns, like that one place in Seattle. This seems like a terrible solution, although it might work. And let's not even talk about the environmental impact, it seems to be a taboo nowadays.
Why not just prevent private companies from buying homes they don't use, and force them to sell the ones they are currently holding?
Right, ghost towns owned by private equity. So I'm not crying. I agree about the environmental impact, though.
"Prevent private companies from buying homes they don't use" is going to be a really hard sell legally. (Though, to be fair, changing zoning laws seems also to be a really hard sell...)
You're fixated on price. Look at rent instead. Private equity cannot create new tenants. The number of tenants is fixed. That's why rental inflation is significantly better in Texas compared to California. Private equity is not a relevant variable here.
When houses become an investment, that's when you start screwing young people! And it stops being an asset if you just simply build more