Yes, if you have 500 000 people in town, you need to produce food for 500 000 people all the time. While if you have 500 000 people in town, you only need to build houses for 500 000 once.
But the logic of “there is a shortage of X, therefore the proper solution is to ban the production of X and hope that the problem will magically go away” is insane either way.
Yes, if you have 500 000 people in town, you need to produce food for 500 000 people all the time. While if you have 500 000 people in town, you only need to build houses for 500 000 once.
Unless, of course, some people who already have a house or people who do not even live in your town can buy houses in your town in order to use them as investment and/or to rent them to people living in your town. Thankfully, this is a completely ridiculous counterfactual and noone ever does that...
But the logic of “there is a shortage of X, therefore the proper solution is to ban the production of X and hope that the problem will magically go away” is insane either way.
For some things this logic is valid. See induced demand and attempts to solve traffic jams by building even larger roads. Now housing isn’t exactly like that, but neither its like food. This kind of appeals to simplified heuristics and resulting referent class tennis is non-productive.
The people outside the town who buy houses here either expect to rent them expensively, or to use them as an investment because they expect the costs of housing to grow. (Or a combination of both.)
Refusing to build more houses means doing exactly the thing they want—it keeps the rents high, and it keeps the costs growing.
If you have 500 000 people in the town, and 100 000 houses are owned by people outside the town, you should build more houses until there are 600 000 of them (i.e. not only 500 000). Then the people outside the town will find it difficult to rent their houses expensively, and may start worrying that the costs will not grow sufficiently to justify their investments.
Thankfully rising land prices due to agglomeration effect is not a thing and the number of people in town is constant...
Don’t get me wrong, building more housing is good, actually. But it’s going to be only marginal improvement, without addressing the systemic issues with land capturing a huge share of economic gains, renting economy and real-estate speculators. These issues are not solvable without a substantial Land Value Tax.
Food gets used up quickly, but it takes a long while to use up housing, so banning new housing really isn’t comparable to banning making food.
Yes, if you have 500 000 people in town, you need to produce food for 500 000 people all the time. While if you have 500 000 people in town, you only need to build houses for 500 000 once.
But the logic of “there is a shortage of X, therefore the proper solution is to ban the production of X and hope that the problem will magically go away” is insane either way.
Unless, of course, some people who already have a house or people who do not even live in your town can buy houses in your town in order to use them as investment and/or to rent them to people living in your town. Thankfully, this is a completely ridiculous counterfactual and noone ever does that...
For some things this logic is valid. See induced demand and attempts to solve traffic jams by building even larger roads. Now housing isn’t exactly like that, but neither its like food. This kind of appeals to simplified heuristics and resulting referent class tennis is non-productive.
The people outside the town who buy houses here either expect to rent them expensively, or to use them as an investment because they expect the costs of housing to grow. (Or a combination of both.)
Refusing to build more houses means doing exactly the thing they want—it keeps the rents high, and it keeps the costs growing.
If you have 500 000 people in the town, and 100 000 houses are owned by people outside the town, you should build more houses until there are 600 000 of them (i.e. not only 500 000). Then the people outside the town will find it difficult to rent their houses expensively, and may start worrying that the costs will not grow sufficiently to justify their investments.
Thankfully rising land prices due to agglomeration effect is not a thing and the number of people in town is constant...
Don’t get me wrong, building more housing is good, actually. But it’s going to be only marginal improvement, without addressing the systemic issues with land capturing a huge share of economic gains, renting economy and real-estate speculators. These issues are not solvable without a substantial Land Value Tax.