So there’s a ton of countries that I’ve heard have had truly unaffordable housing for decades, like:
- The UK
- Ireland
- The Netherlands
And I’ve heard of a ton of countries where the cost of houses was until recently quite affordable where it’s also started getting worse:
- Germany
- Poland
- Czechia
- Hungary
- The US
- Australia
- Canada
- And I’m sure plenty others
- It seems to be a pan-Western bloc thing. Is the cause in all these countries the same?
- We’ve heard of success stories in cities like Vienna where much of the housing stock is municipally owned – but those cities have had it that way for decades. Would their system alleviate the current crisis if established in the aforementioned countries?
- What specific policies should I be demanding of our politicians to make housing affordable again? Is there any silver bullet? Has any country demonstrably managed to reverse this crisis yet?
Finland only has approximately 1000 willfully homeless people. I’d call that solving the crisis.
As a Finn, please stop talking about us as some kind of utopia. We haven’t solved shit and our government is infested with fascists. I’m preeetty sure there are a lot more than that out there, unless a quarter of those 1000 happen to be around my morning commute.
They also have a relatively small monocultural population and really cold winters.
True, but they could just decide to ignore homeless people like most of the US and other capitalist countries have, but they didn’t.
one of the main reasons people are against state housing is because people with the wrong skin color might get it
What specific policies should I be demanding of our politicians to make housing affordable again?
- Ban corporate ownership and excessive individual ownership (ex: > 10) of homes.
- Remove most barriers to building lots of new and higher density housing (ex: four-story multi-unit buildings) except legitimate safety and ecological concerns.
In my own Portugal, which is a very turistic country and also towards the bottom of the GDP-per-capita scale in the EU, things that would likely work very well would also be:
- Crack down on AirBnB
- Forbid ownership for non-residents.
Portugal currently has a massive house inflation problem (extra massive, because of how low average incomes are here) and a lot of it has to do with residential housing being removed from the housing market and turned into short term turist lets (for example, over 10% of housing in Lisbon has been turned into AirBnB lets) and foreign investors (not just big companies but also individuals, such as well off pensioneers from places like France) pulling prices up by being far less price sensitive than the locals as they’re buying residential housing as investments having far more money available than the average Portuguese.
Having lived in both Britain and Portugal during housing bubbles, what I’ve observed was that the politicians themselves purposefully inflate those bubbles, partly because they themselves are part of the upper middle class or even above (especially in the UK) who can afford to and have Realestate “investments” and hence stand to gain personally (as do their mates) from Realestate prices going up and partly because the way Official GDP (which is supposedly the Real GDP, which has Inflation effects removed) is calculated nowadays means that house price inflation appears as GDP “growth” since the effects of house price increases come in via the “inputted rent” mechanism but the Inflation Indexes used to create that GDP do not include house price inflation, so by sacrificing the lives of many if not most people in the country (especially the young, for example the average age for them to leave their parent’s home in Portugal is now above 34 years old and at this point half of all University graduates leave the country as soon as they graduate) they both enrich themselves and can harp in the news all about how they made the GDP go up.
All this has knock on effects on the rest of the Economy, from the braindrain as highly educated young adults leave and the even faster population aging as people can’t afford to have kids, to shops closing because most people have less money left over after paying rent or mortgage so spend less, plus the commercial realestate market is also in a bubble so shops too suffer from higher rents. However all this is slow to fully manifest itself plus those who bought their houses before when they were cheaper don’t feel directly like the rest, and they generally don’t really mentally link the more visible effects (such as more and more empty storefronts) to realestate inflation, much less do more complex analysis of predictable effects, such as how the braindrain and fall in birthrates will impact their pensions in a decade or two.
Crack down on AirBnB Forbid ownership for non-residents.
Ah, yes, I forgot to mention AirBnB! Those are both good calls.
The AirBnb issue is a little complicated because I’ve seen some good arguments that it can help people afford to keep their homes. But I think that could easily be addressed by a single, simple rule: you are only allowed to rent your primary residence as determined by tax records.
that it can help people afford to keep their homes
This is actually a good argument but I believe it’s only valid when people sub-let empty rooms, and don’t buy whole new houses to rent out as is now more commonly the case.
I see, yes I definitely agree that AirBnB is part of the problem (it’s happening too here in Prague), although I think it can’t be the main cause because the price rise is also being felt in other parts of the country where there are practically no tourists…
Whilst I would be wary of saying AirBnB is the main cause (more likely it’s a big one but not the only one), keep in mind that when realestate prices go up in major cities, that pushes out people who go to cheaper places, pushing prices up in those places which in turn might push some out from those places and into even cheaper places.
So housing bubbles centered in main cities do naturally spread out from there to places were the original causes of the bubble are not present.
Oh, I agree if you’re talking about addressing homelessness. That makes sense. If you’re advocating free social housing for every single person in the country, I’m not sure how that could be done or if it’s ever been done anywhere ever? I would be curious to hear about possible solutions though.
Massachusetts has a regional transit system, and just used that to mandate transit oriented development for all towns and cities served. It requires they zone higher density housing “as of right” within half a mile of transit. I have high hopes for that, but it will take decades and we’re starting at such a high cost of living.
However we also have the problem of a stagnant population and very little room for new development. It’s infill and replacement housing so will be even slower
I think money should be invested into investigating ways to retrofit the current urban sprawl neigborhoods to make them higher density.
The problem is everything with buildings is slow. Who can afford to replace functional buildings, and buildings remain useful for decades or more? There’s only so much you can do with infill. The only other option I can think of is to change zoning radically enough that it becomes profitable to bulldoze functional buildings. Of course that has additional environmental costs but over time should be fine
I’m personally not a fan of higher density buildings by themselves. That’s just a recipe for annoying people enough that you hope they demand better before they give up and move away. Higher density buildings needs to have some thought put into walkability, personal mobility, and transit
Ban corporate ownership and excessive individual ownership (ex: > 10) of homes.
This is also what my knee jerk reaction would be. Do you know if it’s actually been done in any country, and whether it worked?
I don’t know, and based on a quick search, it doesn’t appear that it’s been done. California is currently working on a law to limit corporate ownership to 1,000 homes, lol.
Lol. At least a step in the right direction I guess. They should make it decrease by 100 each year
Austria has, with widespread high quality public housing. https://www.theguardian.com/lifeandstyle/2024/jan/10/the-social-housing-secret-how-vienna-became-the-worlds-most-livable-city?CMP=Share_iOSApp_Other
the increased housing supply has kept private rents very affordable too.
This is very good.
Do you know if Austria had an Ireland-style house price problem before they did this (ie. would it halt the crisis in Ireland now), or is it more that it just prevented the crisis we see in surrounding countries from happening in Austria in the first place?
They’ve been building big public housing since the 1920s. I live next to a lot of it and it’s quite high quality and really pleasant.
Lots of cities/countries has massive public housing (the UK being a great example post WW2) but Vienna is more of an exception in that they didn’t follow the trend in the 70s-90s of privatization and stopping investment (although it did slow down at one point).
They were the same way about their tram system, where they kept it rather than ripping it out like most places. Now everyone else wishes they so had a tram network or is trying to rebuild one.
That being said, rents are rising here too, but they are much more reasonable to begin with. I was living in London previously, and now we spend about 30-40% less for a place over twice the size and in a nicer location. Plus finding a place was muuuuuch easier, since it’s noticeably less competitive.
Just adding to this, some history if anyone is curious: https://en.wikipedia.org/wiki/Red_Vienna
“before they did this” for Vienna is around WW1, which was a very different time :/
I am not very familiar with housing crises in other countries. I have lived in Vienna my whole life and now live in an apartment I own. This was possible to afford for me (a single man then in his mid-20s working as a software engineer) with a bank loan and some financial support from my family; I am not sure if it would still be possible nowadays.
I see. Yeah, I live across the border in Czechia and the way you did it used to be standard too until 5-10 years ago. Then the prices started rising (especially here in Prague) and it started to be a problem. It used to all be state owned obvs (not sure about einfamillienhauses though) but it was sold to the residents after 1990, and our levels of municipal housing haven’t risen much since then either. I don’t think we had the housing cooperative movement that you guys had in the interwar period.
Vienna has 50% public housing and as a result basically no homeless population.
What specific policies should I be demanding of our politicians to make housing affordable again?
The answer is Georgism combined with no zoning, but people aren’t ready to hear about that yet.
By Georgism I mean a very high tax (80+%) on the unimproved value of land. It prevents land speculation and returns the value of the land to the public. Houses would be incredibly cheap, because you couldn’t make money by merely owning land. The only reason to own a house would be to live in it, or to provide a true service for people who would actually prefer to rent.
