> All current home owners take on debt so they can remodel their houses and become landlords
Not all of them, just whoever wants to. It becomes a natural balancing act, as rent swings higher, so do the incentives to replace a single family home with a duplex (or heaven forbid, a 3-unit or 4-unit home, which I may add all use single family construction techniques and have similar costs per sqft to construct). I mean, that's how free market economics is SUPPOSED to work, if a commodity is overvalued then more people enter the market to sell and bid the price back down. What we have now is some abomination where there's a limited quantity of housing with a growing number of elite bidding it up and up and up.
> seems like an insane proposition relative to the government just building housing and charging rent pegged to their wages, no?
I mean, that sounds great to you, and it also sounds great to me, but in the united states atleast I'm sure a large percentage of the population would view this as blasphemy.
To be specific, this is politically infeasible in most or all of the country. Most places can't even agree that "building housing" should be legal at all, much less building done by and managed by the government and all the policy implications built around financing that operation.
Furthermore, in the places where this is needed most, cost of construction is already high (part of the reason why rent is so high, see my section on supply and demand), which means a municipal government could only afford to build a very few number of units. So either way the first step is to lower the costs of housing, both by making it legal to utilize land more efficiently and by streamlining regulations that hamper construction.
Not all of them, just whoever wants to. It becomes a natural balancing act, as rent swings higher, so do the incentives to replace a single family home with a duplex (or heaven forbid, a 3-unit or 4-unit home, which I may add all use single family construction techniques and have similar costs per sqft to construct). I mean, that's how free market economics is SUPPOSED to work, if a commodity is overvalued then more people enter the market to sell and bid the price back down. What we have now is some abomination where there's a limited quantity of housing with a growing number of elite bidding it up and up and up.
> seems like an insane proposition relative to the government just building housing and charging rent pegged to their wages, no?
I mean, that sounds great to you, and it also sounds great to me, but in the united states atleast I'm sure a large percentage of the population would view this as blasphemy.
To be specific, this is politically infeasible in most or all of the country. Most places can't even agree that "building housing" should be legal at all, much less building done by and managed by the government and all the policy implications built around financing that operation.
Furthermore, in the places where this is needed most, cost of construction is already high (part of the reason why rent is so high, see my section on supply and demand), which means a municipal government could only afford to build a very few number of units. So either way the first step is to lower the costs of housing, both by making it legal to utilize land more efficiently and by streamlining regulations that hamper construction.