Prop 13 untaxed land. Untaxed land combined wealth inequality, combined with a dearth of other investment opportunities after 2008, combined with very lax regulations of international capital flows led to property hoarding on an enormous scale.
Rich investors want to hoard the kind of properties they would want to live in. Hence luxury apartments and houses that take up way too much prime inner city land - not just in Los Angeles, but Singapore, Vancouver, London, Hong Kong and many, many more.
Hoarding obviously takes supply off the market and rents are obviously driven by supply, so rents have gone up.
>Even if the incentives to build luxury apartments are gone, the codes still don't make other apartments all of a sudden economical.
If land became a lax liability rather than an asset that gives you the license to tax others, the incentives to build high rises to put ordinary people in would be much stronger.
Of course, without doing something about wealth inequality all of that money would still flee into other asset classes. Bitcoin would probably do well :)
