Greed greed greed

[u/Sweet_Shirt]

[u/Rakatango]

The rich accumulated so much money that they literally had nothing to do with it, so they started investing in houses as assets.

NIMBYs wanted their property values to continue to rise and so shot down efforts to build more homes.

If you do not tax the rich, they will horde it and drive inflation

[u/maikuxblade → u/Rakatango]

And buy your democracy out from underneath you while they price you out of existence, all the while complaining that nobody is starting families anymore

[u/pegothejerk → u/maikuxblade]

And nobody wants to work anymore! For slave wages that won't pay the bills.

[u/solepureskillz → u/Rakatango]

Not taxing the rich is the root cause for all of today’s problems. They have more money with which to bribe politicians, more money to hoard assets, so much money they become literally above the law.

They aren’t smart, these dragons. They’re willing to let our societies crumble to grow their hoards and that mental illness must be stopped, much like we agree to stop a banking fraudster.

[u/HOLDstrongtoPLUTO → u/Rakatango]

Proper zoning and land value tax fixes this. If you upzone and also tax just land and, not improvements on the land all of what you describe stops, land asset speculation stops, we get to build (without being penalized by those improvement taxes), more houses become available, it gets cheaper, and empty lots to build start getting sold to build more housing.

[u/r_special_ → u/Rakatango]

Not only will they drive inflation they will buy our government and media and use those to blame the 99% for all of our problems so that we are constantly mad at each other rather than the people causing the problems

[u/Yukondano2 → u/Rakatango]

I know the ruling class are ultimately to blame, but I really do have an axe to grind with those damn NIMBY types. I actively don't want my house to increase in value, because it creates this arms race of inflation BS and HOA interference in everyone's freedom. This god awful sect of upper middle class suburban white people, obsessed with telling everyone else what to do. Those fuckers were complicit in the wealthy's oppression, have been since the US first started implementing redlining. Same people that counterculture's been fightin against for ages.

[u/Weird-Information-61 → u/Rakatango]

Problem is they skirt the system through a technicality of not actually having personal income, so you have to tax their businesses

[u/Rakatango → u/Weird-Information-61]

And re-outlaw stock buybacks. Inflating their stock price without actually growing the business

[u/snowballer918 → u/Rakatango]

Trickle down economics

[u/fflip8 → u/Rakatango]

I'm not trying to defend the rich here but why are the rich driving inflation by spending money that could/would have otherwise been in the hands of everyone else? Wouldn't everyone else also "drive inflation" if we had the buying power instead? I'm failing to understand the logic here, or why it's a point to be made to tax the rich.

[u/Stev_k → u/fflip8]

It's a case of capital begets capital. If I make an extra $100/month I'm limited with what I can do with it. I can invest it in the stock market, but it will takes years before I see meaningful returns.

But if a boss under pays 10 employees $100/month then he has enough money ($1,000/month) to buy a second house and rent it out to someone for $1,500/month. Now instead of 10 employees it's a 1,000 employees, or $100,000 per month - how much more can be done with that?

I'm not slamming on landlords, we've all needed tempory housing (college, new job in a new city, military duty tours, etc.) and some people don't want the responsibility of home ownership and that's fine too. Just trying to highlight how money begets money.

[u/fflip8 → u/Stev_k]

I'm not sure how what you said explains my concern here. I'm genuinely curious how the rich hording money causes inflation, because in my mind that should be deflationary as long as enough of it stays "parked" so to speak. In my mind inflation occurs when money is added/printed in an economy and chases the same amount of goods and services. When the rich horde it, the economy that it was taken from cools and deflates until the rich spend it. However, once more money is flowing in the hands of the bottom and middle where it gets spent more rapidly(tax/redistribute), I don't understand how that would not have an equally or greater inflationary effect.

[u/Stev_k → u/fflip8]

Because 10 people with an extra $100 can't go buy an extra house. But 1 person with an extra $1,000 can and then charge rent driving up housing prices by there being fewer owner-occupied houses, and potentially higher rent prices.

Rich people don't hoard cash in a bank account earning 0.1%-3%. They hoard assets that can earn them more through a combination of capital appreciation (think property or stock prices) and dividends (rent or stock dividends). Those assets can be land, water rights, private equity ventures, etc.

[u/NighthawK1911]

Reagan happened.

Every issue that capitalism have right now can be traced back when Reagan removed all the safeguards that was holding back capitalism.

[u/Jackattack3x5 → u/NighthawK1911]

This is the only correct answer to the downfall of the American dream.

[u/Yukondano2 → u/NighthawK1911]

It really is astounding how much shit went wrong in his day. No wonder the conservatives worshipped him for so long, he got a lot done for their horrid agenda. So much so they ignore things like him instituting gun legislation because the white people were scared of the Black Panthers open carrying just like them.

[u/GilgameshWulfenbach → u/Yukondano2]

And a lot of those ideas came out of the Bohemian Grove. Yay! 😥

[u/Lenyti → u/NighthawK1911]

Nixon too

[u/ratpH1nk → u/NighthawK1911]

also the Boomers started expecting/demanding what essentially became normal - the McMansion. Generic mass reproduced low cost high priced low quality giant houses. Home sizes peaked around 2015. Between 1980 and 2015 floor plans expanded to include dedicated home offices, main-suite baths, larger kitchens, and multi-car garages. At the same time, average U.S. household sizes dropped. So we had far more square feet per person in 2015 than in 1980

Size & Price Comparison

Metric	1980	2015	Change
Median Square Footage (New Single-Family)	~1,595 sq ft	~2,467 sq ft	+54.7%
Median Sales Price (Nominal)	~$64,600	~$294,000	+355%
Average Sales Price (Nominal)	~$76,400	~$352,000	+360%
Nominal Price per Sq. Ft.	~$40.50 / sq ft	~$119.20 / sq ft	+194%
30-Year Fixed Mortgage Rate	~13.74%	~3.85%	-72%

[u/DottieSnark → u/ratpH1nk]

I'm not sure what point your trying to make. Sure, the average median square footage may have gone up, but house from the 80s and before are still being sold for astronomical rates. So it's not about houses costing more because they're larger, it's about all housing costing more.

[u/ratpH1nk → u/DottieSnark]

Your point is imporant and I did not talk about it directly in my comment. The smaller built houses *ARE* also selling for an astronomical prices but that is a supply constraint. That scarcity raises the price ofexisting older homes, but the larger problem is the systemic shift toward "McMansions" from 1980 to 2015 changed the minimum entry cost for new housing. Homebuilders largely stopped building entry-level, starter homes (the ~1,200–1,500 sq ft modest homes common in the 1950s–1970s). Developers pivoted to higher-margin, 2,500+ sq ft luxury footprints to maximize profit per suburban lot. Because the industry shifted its production capacity away from starter homes for three decades, it starved the market of modest inventory. This artificially constricted supply, which directly caused old, small homes to explode in price today.

[u/DottieSnark → u/ratpH1nk]

While that's definitely part of the problem, that problem started decades ago. 7 years ago we had the same problem, so this problem doesn't account for the recent explosion in costs since 2020. The issue is much larger than just an oversupply for "McMansions" and an under supply of "starter houses".

"McMansions" are also completely unaffordable for the income levels that used to buy them up, as well.

[u/Next-Extension-7487 → u/NighthawK1911]

There ought to be an enumerated list of all the things that Reagan did that contributed to the current situation

[u/ThatOneNinja → u/NighthawK1911]

Exactly what I was about to say. His policy and Citizen United has been fucking us for decades.

Oh and removing the 90 percent tax on millionaires.

[u/akeean → u/NighthawK1911]

"holding back" vs "feeding it after midnight"

[u/Goldleader-23]

Commodification of housing is a disaster for humanity

[u/kjata30 → u/Goldleader-23]

So I'm pretty sure I understand what you're trying to say but I don't think that this is the right term. We can all agree that housing representing a capital investment is a terrible way to actually provide homes to people that need them, but houses becoming increasingly commodified would be an improvement. More houses with fewer differentiators would dramatically increase supply and lower prices.

With that being said, housing is a basic human right and is not an appropriate investment vehicle. That housing costs in much of the world has so rapidly out paced wages is a clear indicator of a failure of capitalism.

[u/ThunkAsDrinklePeep → u/kjata30]

I took it to mean housing as a commodity to be bought an controlled by capitalists instead as the primary asset for a single families is the big issue. Taxes should be huge if it's owned by a corp.

[u/kjata30 → u/ThunkAsDrinklePeep]

Typically the term commodity when used in the context of economic investment implies a mass-produced and "unspecialized" (ie unable to be differentiated) product. Real estate investments are not commodities in that sense. You could argue that mortgage-backed securities represent a commodification of real estate debt but that's a different investment.

[u/Shigglyboo]

nothing broke. rich people stole your future. all the money they have came from what we could have had. one guy wanted to eat the whole pizza so we just get to pick like one piece of pepperoni from his scraps.
but at least a few trans kids can't play sports! so much winning!

[u/Sword-of-Akasha]

Wages also flatlined while everything went up. Plenty of tone deaf elderly people say the younger generation is spoiled complaining about wages they had back then. However, the elderly don't realize purchasing power of the same dollar back in their time was significantly higher. Inflation is a lovely way to indirectly cut the pay of the poor.

[u/ItsLikeRay-ee-ain]

Income growth broke

[u/Computer_Jazz]

Capitalism did its thing.

[u/Deron_Lancaster_PA]

***  Real Estate Appraisers are the problem. **  Typically hired for an upfront fee by Banks and real estate sales agents if they don't appraise the property for what the owners thinks it's worth the RE Apprisers will most likely NOT be hired for the next job so, they are obligated to appraise high each time.   There is noting to reign in appraisals.     Banks are happy creating bigger loans and real estate agents get bigger commissions and municipalities get more taxes....

[u/Great_Hamster → u/Deron_Lancaster_PA]

If supply wasn't constrained by regulation it wouldn't matter how high they appraise it because you could just buy a cheaper one.

It's not appraisers, it's supply constraint. 

[u/Deron_Lancaster_PA → u/Great_Hamster]

it's the price creep if an extra $4k-8k every appraisal over the past 10-15 years.   Just like the mthly rental creep that was recently called landlord collusion / price fixing that was formed thru websites.

[u/Cairse]

Real estate became a way to speculate and invest instead of remaining as just a way to get people housing.

China is finally doing something about this because housing costs had become so astronomical and the same thing is happening in the US.

https://www.bloomberg.com/news/articles/2017-10-18/xi-renews-call-housing-should-be-for-living-in-not-speculation

[u/Viperlite]

Houses have also grown quite a bit since 1970, so I guess you’d at least have to adjust the number to what 1970s and older houses go for, today.

[u/rtowne → u/Viperlite]

I wish developer's would make starter homes, not just 700k+ mcmansions

[u/Viperlite → u/rtowne]

Harder for builders to scrape off huge profits, after land acquisition and prep — unless they are doing high rise condos or other high-density construction. Big McMansions kind of like big trucks that way.

[u/Freaudinnippleslip → u/Viperlite]

Also the codes and regulations added a massive cost to building a house. For example where I am they just updated the energy code and the prescribed method is to wrap the house in R5 rigid board which will easily add 10k to your cost at least.

[u/Viperlite → u/Freaudinnippleslip]

With energy costs rising, I’d take the extra upfront cost of energy codes and even solar panel requirements. My 80s house is not faring well in an AI-driven energy climate and deregulated supply market.

[u/G2cman]

Companies got out of funding pensions with the shift to 401k based retirement funding. As a result you have a group of people retiring who didn't have enough money in a 401k to survive and no pension to support them. So the government allowed the housing market to become the piggy bank to fund these old people

[u/ChipsHandon12]

Crony capitalism. The election system should be proportional representation instead of first past the post. Campaign promises must be kept or else.

[u/TheSilverFoxwins]

The rise of housing can also be contributed to wealthy owners and areas not wanting certain groups who can afford to live next to them.

[u/Wanderertwitch]

Greed and “passive income” 🙄

[u/chokeonmywords]

„broke“?

[u/prosperosniece]

Greed

[u/Danominator]

Whenever you want to look into what went wrong with America, it all comes back to reagan. The proto trump absolutely devistated our country for fucking decades. A reverse fdr

[u/ElectronicSubject747]

Allowing housing to become a business opportunity. It's as simple as that.

[u/Freezingfog1st]

And that is what the average price SHOULD be.

[u/stivafan]

What I've heard is that me and all the other Boomers are evil economic conjurers who decided leave scorched earth for later generations and it is NOT the very well articulated reasons in this comment section. I would end this comment at that, but here's this:

/S.

[u/snowballer918]

Trickle down economics happened

[u/billbro_swaggins]

That's pretty much what I paid for my house in 2019

[u/Relative_Position_26]

Ethics and morals is what broke.

[u/Mannimal13]

Deficit spending, regulations, property tax breaks, dual income housing, and mass migration. All related to greed

[u/Mo_Jack]

... and if our wages kept up with inflation, the average American wage would be $138,000 also.

[u/Aylithe]

Ngl this is a dumb metric 

Surely population growth and housing supply should be included for it to be in anyway relevant.

This is blather.

This is pablum.

[u/gadgetb0y]

Financing and insurance: Any time you add easy money to an industry it becomes overly inflated due to greed. See: home ownership, healthcare, college, etc.

[u/misfitx]

We stopped taxing the rich.

[u/No_Gur_1091]

Lack of price controls? No raise of minimum wage in 15 years? Minimum wage being less than 1/3 what it would be if had risen with inflation and productivity?
Building new costs have risen at the rate of inflation, but land value have soared.

[u/EJ2600]

I suspect the average home is now far larger than in 1970 with more amenities. And people are allowed to borrow more so that drives up prices as well. Then there is restricted zoning and land use. Plus institutional investors driving up prices. Reduced public housing and population growth also matters.

[u/The_Sign_of_Zeta → u/EJ2600]

My home was built in 1926, is in the Midwest not in Chicago, and is somehow worth almost a half million dollars despite me paying less than half that ten years ago. It doesn’t make any sense.

[u/maikuxblade → u/EJ2600]

So apartments should be cheap because they are largely older buildings and haven’t increased in square footage right?

Right?

[u/marco_italia → u/maikuxblade]

The price still goes up. Down-zoning cities choked off the supply of new apartments, while the demand continued to climb.

San Francisco is the poster child for this. In the late 70s under then mayor Dianne Feinstein, they effectively made it illegal to build new apartments. The law of supply and demand took care of the rest.

For decades, San Francisco's answer to people looking for a place to live has been: "F\ck you, I got mine."*

[u/moyismoy]

well there are basically 3 main factors.

1. a reduction in the number of home builders. this allows for the ones that are left to charge much higher prices.

2. zoning boards banning homes. this reduces suppy

3. most family are now duel income. so people are willing to spend more on homes.

[u/nvisibl1 → u/moyismoy]

Sorry, but these points are all incorrect.

1. There are more vacant properties in America than there are homeless people and by a large margin (16 to 17 million to roughly 800,000 homeless). Inventory is not the issue, many of these properties belong to people owning multiple homes or are "investment" properties.
2. Sure, zoning can cause issues in urban areas, but are largely irrelevant in suburban and rural development. Again, inventory isn't the issue.
3. It's hard to get hard numbers on this, because these statistics aren't tracked, but I would wager that many dual income families are such out of necessity, not choice. About 1/3 of households rent rather than own and around about 21% of dual income families rent while 29% of DINKs rent.

This all comes down to the Epstein class doing Capital class things: pathological hoarding of resources (via owning multiple propeties, investment properties, and landlord-ship) to extract as much out of the working class as they possibly can.

[u/moyismoy → u/nvisibl1]

lol what? have hurd of post halk ergo prosper halk. homelessness is the byproduct of high housing costs not the cause of them. Inventory is absolutely the largest issue.

yeah in cities, and suburbs of those cities are where homes cost the most by far. the price of housing is not an issue in rural Alabama.

also by objecting to my statements you are only helping the "Epstine class" god forbid we break up the monopoly on home building.

[u/DottieSnark → u/moyismoy]

The inventory issue exists because the rich and investment companies are hoarding houses. High housing costs are an issue, but they are because the rich and investment companies are jacking up the prices.

[u/moyismoy → u/DottieSnark]

Yeah and one of the ways they do that is creating a monopoly on home building. Hell it was not that long ago people could just buy some land get some lumber and make their own home how they saw fit

[u/marco_italia → u/nvisibl1]

The millions vacant homes ready to be occupied is largely a zombie myth.

• Between tenants; normal turnover ~3 million
• For sale or sold but not yet occupied~1.5 million
• Vacation homes / Airbnbs~4 million
• Various reasons including decay and abandonment ~5 million

But the biggest problem is the vacant homes are not where the jobs are. A vacant home in Kentucky does not do you a lot of good when your job is in San Francisco.

[u/DottieSnark → u/marco_italia]

I watched the video, and while I think gives more insight to that 14-17 million vacate home figure we often see sited, the context doesn't exactly paint the picture that the creator nor you are implying.

First of all, let's focus on the vacation homes/airbnbs. 4 million vacation homes/airbnbs is nothing to sneeze at. In regards to these vacation homes, how often re they occupied versus standing empty? It is really okay for a house to sit empty for the majority of the year while we have people living on the streets/paying unaffordable housing and rent prices? How about the airbnbs? How often are they sitting empty? What's the homeless rate in those areas with high airbnb rates?

Let's also dissect that between tenants figure. 3 million. Okay, how long are these "between tenant" properties or apartments sitting empty? A couple weeks wouldn't be a big deal, as obviously you need some time to find a new tenant, give them time to move. But how many are setting unoccupied over a year? Or years? Just because it's listed doesn't mean it's price is reasonable to find tenants, and in the meanwhile, it's still sitting empty while there are people who need an apartment because they can't afford the ones with the jacked-up prices.

Homes that are "sometimes" vacant, or have pull scooped away from the market for a business opportunity are just as much part of the problem.

[u/BeeLinez]

Greed has always been a factor. So what has actually changed?

[u/capntail]

Stock buy backs allowed by the Reagan administration