Housing shortfall, costs and affordability

[danbrotherston]

It used to work really well in the past. Home ownership was affordable to many and renting as an alternative to ownership was also affordable. House prices and rents pretty much rose at the rate of inflation. The concept of real estate as an investment ruined this. I came up during a time when your house was not an investment but a place to live. You were also able to save for retirement in safe places that paid a decent return on those investments.

I think there’s a compelling case that owning was only affordable in the past because it was subsidized by offloading all its infrastructure costs onto the future via debt.

(And because we basically created the idea of an accessible and affordable mortgage after the Great Depression, owning property before that point was very unusual)

I don’t see how ownership can ever become ”cheap” again, unless we are willing to sacrifice a LOT more rural land for land prices well below what they are today.

I feel like North America has finally caught up to most of the rest of the world and has run out of cheap land. When land is expensive, renting is normal. I don’t see how it could ever be cheap again in Canada + the US. It’s a finite commodity…

The problem is now we have a significant portion of people (myself included) who own an asset that future generations simply can’t own in the same way. How do we possibly get past that inequity and resentment generator? I think it’s a major mistake to look at the 50s, 60s, and 70s and say that this is some sort of default we need to “get back” to. What if it was just an unusual historical blip that can never be repeated because it was never sustainable?

I don't think this is true. The Netherlands does not have cheap land (never has) but owning is quite common here. I don't think financialisation and ownership are the same thing.