Housing is at the root of many of the rich world’s problems (2020) (opens in new tab)

And flipping to more and more expensive properties through 1031s requires more and more capital and only makes it cover less taxes. There's no tax benefits versus just keeping the first property and paying all the taxes and buying a separate property to depreciate.

If you sell a $500k property earning $40k/year where the depreciation covered 45% of your income, and you buy a $1 million property earning $80k/year, you get a new $500k to depreciate $18k/year. Then the depreciation only covers 22% of your income.

Depreciation is very fundamental to business tax law. I'm not sure how you'd "fix" that without penalizing non-rental companies for expanding.

The other stuff (depreciation, 1031 exchange) are very sensible accounting. Depreciation applies only to the improvements (buildings) on the land, not the value of the land itself. This reflects genuine loss of value over time (buildings wear out). And in the event that you sell the property at a profit down the road, you have to pay back all that tax savings at higher regular income rates (not lower capital gains rates). This is called "depreciation recapture." So depreciation can defer taxes, but not eliminate them.

Likewise, when you do a 1031 exchange, your new property ends up with a lower cost basis based on the previous property, so that when you later sell it you still have to pay all that capital gains tax and depreciation recapture. It defers but does not reduce or eliminate taxes.

Of course - if you die while holding these properties, then your heirs get the cost basis reset ("stepped up"), which does indeed eliminate all these taxes. This is what we need to fix.

Banks are also much more forgiving when it comes to down-payment, when they know it's going to be a rental, and you already have other rentals as collateral.

In essence, purchasing a rental unit with only 1%-5% down payment up-front, is kind of like purchasing stocks with 20x - 100x leverage. As long as you meet your mortgage payments, get steady rent, and don't get any crazy expenses - you're sitting on a goldmine.

Some of the guys I went to school with did just that. Bought a rental unit, while working. All their salary went toward down-payment of the next unit, and the banks were very forgiving when it came to new loans. After 10 years they had a nice portfolio of rentals, which they then sold to typical real-estate investment funds.

Then I sold for cash (a pretty big no-no in terms of real estate investing) because I didn't enjoy such a concentrated risk.

When I sold, there's something called depreciation recapture. If the 27.5 year depreciation thing was used to offset your income taxes, part of your gains gets taxed as ordinary income. The cost basis of property is also lowered so that the capital gains is higher.

There's also tax trick called cost segregation that lets you depreciate certain parts of your property at an accelerated rate.

Basically, as the OP says, keep doing the 1031 exchange until you're dead and your heirs don't have to worry about depreciation recapture.

And are losing value on the property, which is the point of depreciation.

>~30 years later, you've deprecated it down to an effective value of $0

An no one will now rent, since your building has an effective value of $0 since it has become crap.

All throughout your list you ignore all the costs involved in being a landlord. Have any friends that have tried it? (I do). Did they become silly rich? Or did they quit because it is a major problem to actually make it very profitable versus other uses of capital and time? I'm a decently saavy investor (in many things), and have watched multiple friends start up rental properties, only to stop once it became clear that tenants destroy things, costs to maintain properties are volatile and astronomical, the work required is significant, and so on.

I have done the math on real estate investing many times, and each time have decided the returns are not worth it.

>The net result is that rental properties generate a ton of income for the owners

If it were so profitable, then tons of capital currently being spent on other uses (tech, medical, finance) would instead go into buying up more housing. But the fact is that being a landlord is not very profitable, so capital doesn't flood into that market - it is still mostly elsewhere.

Historically, housing has performed quite similar to the stock market for returns - as it should be. If housing were a better investment, money would flow in until they balanced. If housing is too poor an investment by screwing with taxes, then money will flow out into other more productive places. And if money flows out, people wanting housing will then have to pay even higher prices for less stock.

Regarding the cost basis rest that is so people can upgrade their house without having to pay a tax bill. This is just deferring the tax not avoiding it. Without this it would be much harder to get a bigger house once you have kids. Most people would have a harder time moving and removing this would lower our quality of life.

I'm speaking as someone who put all his retirement savings into index funds year after year, but then married someone whose job is related to real estate. Real estate feels more concrete and understandable to her than finance, so that's where our money goes now.

It's not easy free money, and I don't know why you would think that any high-profile, low-barrier-to-entry investment would be easy free money. Half of my friends have either bought property or are constantly talking about it. My friends are part of a horde of first-timers who believe, like you, that it's easy free money, and their belief inflates prices.

And that's not just my amateur opinion: my wife and I sit in on a developer happy hour where experienced developers constantly bemoan that they haven't been able to work with certain types of property in years, because they get outbid by naive first-time buyers who don't have a plan for making money other than betting on the market going endlessly up. People who are looking for income rather than appreciation are not seeing opportunities at the current prices.

Thanks to my wife managing our properties herself and having a lot of applicable skills from her profession, we manage to make some money, but every hour she spends managing property is an hour less (or two, really) that she can bill her clients. I doubt that if we adjusted for that it would work out to be a wise use of time. It's work she enjoys and finds satisfying, so we don't look that closely at whether her time (or our money) would be more profitably invested elsewhere, but I'm certainly not quitting my software development job to double our commitment to real estate.

I'm in Austin, one of the hottest markets in the country, so in the end, it's possible that everyone regardless of how naive they are will be rewarded by continued appreciation. Income from real estate hasn't been a game-changing multiplier for us, but appreciation might be. Or not. That aspect of it is just a gamble.

Why aren't estates just taxed as income to the entity who it goes to? If my father croaks and leaves me $1m it should count as an additional $1m of income to me that year.

If you lower the taxes on rental income, more people will buy houses (and build new ones!) to take advantage of the reduction in taxes. However, they will still have to rent the apartments/houses out at market prices. The rental price will go down because now there is a greater supply of houses, and renting out an apartment at a lower rent is equally profitable as before (since you don't have to pay as much in taxes).

The cost of purchasing a house, however will increase, because there are more landlords competing to purchase the house with you.

Overall, the real problem is zoning single family homes everywhere, and rent control that disincentivizes building new housing.

In short, if I buy the rental property for $10. Deprecate it to $0 over 27.5 years. Then Sell it for $20. I then haft to pay taxes on the sale of the profitable asset.

###### Depreciation recapture is a tax provision that allows the IRS to collect taxes on any profitable sale of an asset that the taxpayer had used to previously offset taxable income ######

https://www.investopedia.com/terms/d/depreciationrecapture.a....

Firstly, why does the government deserve to tax these transactions at all? These landlords are already taxed on their income from their jobs, pay property taxes, pay taxes on all the products they buy. The government is extracting plenty of wealth from its citizens, why on earth would we demand more of people just for being successful in real estate? Will the government put their money to better use than these people spending it themselves on products and services? I think anyone who engages with public sector projects and services knows that the government does not efficiently spend money.

Let's imagine a world where 1031 exchanges are banned. What happens? Wealthy investors no longer sell properties at the same rate. What's the point? If my apartment building is cash flowing every year, and I'm stuck paying a huge capital gain tax on the sale, I'll just hold it for life and enjoy the cash flow. The rate of real estate transactions would collapse overnight, killing all of the jobs connected to it from appraisers, to brokers, to investment firms and wealth advisors. Now, not only does the government get less tax revenue because overall real estate transactions and taxable events are diminishing, but there is less incentive to build new projects.

The appetite of 1031 exchange buyers is one of the driving factors in development of new commercial real estate projects in the market! The profit motive spurs growth. Look at the Opportunity Zone legislation of 2017, a once in a lifetime chance to defer and eliminate capital gains as long as you are investing those gain dollars into real estate development in blighted areas. This tax incentive alone has generated hundreds of thousands of new residential units on the market that would never have been built without the tax incentive. Taxing real estate more would only slow growth, if we want people to take the time, effort and risk to build more housing units in the US, we need to incentivize them with less taxes.. not more.

The ridiculous thing is that, since the SALT deduction cap went into effect (and so narrowly avoided the axe this past week, ugh), people who live in states with high property taxes end up being able to deduct only a small amount of their property taxes on their primary home, but if they own investment property, they can typically still deduct all of it -- and I believe they can deduct on their state taxes as well, whereas the SALT deduction is only available at the federal level.

They now have the added buffer of rental/leasing agencies! Many of these are fly-by-night and skirt or outright ignore inconvenient laws like renter's rights.

Repairs? Cost sink, just don't renew complaintant's lease. Bonus you get to raise the rent again!

Want to get in touch with the owner? Most times you'll have to look up tax records and hope it's actually in the owner's name.

Makes rental properties probably 90/10 profit/cost.

I know people on both sides of the equation and it's more than a little insane the entitlement some landlords feel.

Imagine the alternative, where all the depreciation rules you describe above don’t exist, and landlords have to pay a bunch more tax. In that world, the government has some extra money in the coffers, but how does anyone else benefit? Rents will not go down because landlords have to pay more tax, in fact quite the opposite will happen.

Really, I get that you might have moral feelings of unfairness about it, but you are focusing on a minor aspect of the housing market that only has positive impact on rents by bringing them lower.

We should be doing the opposite.

if the government can print money, what's the point of collecting money through taxes?

EDIT: Lots of propaganda in these comments painting individual homeownership as the cure for our housing crisis. It's not. It's the cause.

I disagree. The federal government invests enormous resources into subsidizing home ownership. Everything from Fannie Mae guaranteeing mortgages to not taxing home owners on the imputed value of rent.

And I think that's all well and good, home ownership has many positive externalities. But there's zero point subsidizing demand for something when supply in inelastic. In those cases subsidies don't result in expanded supply, only increased prices. For example even if diamonds are good, it wouldn't make sense for the government to match first time diamond buyers payment, because the supply of diamonds is inherently limited. All it would do is drive up prices.

Modest proposal: the federal government should revoke all of its housing subsidies in any municipality that restricts the supply of housing. San Francisco would be more than free to continue to block development. But if it chooses to do so, then San Francisco home owners should no longer be eligible for Fannie/Freddie mortgages, no longer be able to tax deduct mortgage interest, and should have to pay income tax on the imputed rental value of their home.

People are not natural economists and will basically dig in to support the status quo until that status quo changes, at which point they'll support the new one. Americans, for example, buy new cars at an average new price of $40k and for most of my life accepted uncritically that the value of those cars would plummet the second they were driven off the lot. They did not lobby for supply restrictions that would prevent it. They didn't ask their politicians to prop up "car values." They didn't try to avoid it, at all. They just accepted it.

They would do the same with housing, if they weren't already conditioned not to.

This motivation is backwards. Getting zoning restrictions around your house removed multiplies the value of that house. NIMBYism comes from places where people live. YIMBYism maximizes property values, although there's an element of blockbusting because overbuilding and a change in neighborhood character can make a neighborhood so unpleasant to live in that holdouts will end up selling cheap.

I'm not sure a lot of NIMBYism comes from the notion of protecting home values.

If a home were to be upzoned for apartments the underlying land value would rise significantly, and this would be a significant financial windfall for the home owner. They should want to see their land be upzoned for apts but that's not what we see.

I think NIMBYism derives from the desire for exclusivity. When ones home and surrounding homes are ultra low density you are guaranteed to have few neighbours. This is what is eliminated when homes are rezoned for apartments.

surprise - this has already been signed in California; and amended, and further amended..

https://www.capradio.org/articles/2017/09/29/brown-brings-ho...

I don't know how this came to be such an obviously true common wisdom answer here at Hacker news. It's an extremely incomplete account of what causes NIMBYism. I'm sure at least some of it is purely a desire to maintain land value appreciation, but as others have already pointed out, in plenty of cases, conversion from single-family to multi-family zoning increases land value and the land owners still don't want that.

The basic cause of NIMBYism is these are people's homes you're talking about. They live there. They may have lived there for decades, possibly even for generations. They chose the place for the character and culture it had at the time of choosing, and they don't want that to change. If they enjoy a relatively quiet life with space, they don't want to see their home changed into a traffic jam with nowhere to park. They don't want to be perpetually surrounded by nonstop construction.

I'm not trying to say anyone who feels this way is inherently right. At some point, change is inevitable. I'm sure the original inhabitants didn't like it when European colonists spread strange diseases across the land and then wiped out the stragglers with superior firepower. I'm sure the ranchers of the west didn't like seeing their ranches turned into suburbs. And the suburbanites don't want to see multi-family housing in their once-quiet and relatively secluded homesteads.

Without making value judgments either way, though, I think you have to acknowledge there are far more basic instincts at play here than simple financial incentives. It's fair to say we at some point have no choice, and if the result is we can solve housing unavailability and especially homelessness, and the cost is a few or even a large number of people are left with the neighborhoods they grew up in changed drastically into places they no longer want to live, that may be worth it. But you should understand the full range of motivations for people who want stability in their homes and communities and not act like it's purely about financial gain and greed. Remember also that a fair number of communities in which concerns about gentrification are the greatest and people really oppose redevelopment are neighborhoods that these people were historically forced to live in because they were ostracized if not killed when they tried to live anywhere else. That community in its specific current form is what they see themselves as being a part of, far more than the larger city, state, or country that never wanted them in the first place. This is far more complex than you're making it sound.

Meanwhile no one blinks twice when home prices increase 20% over just a few years and put housing out or reach of even more families.

I started voting when I was 16 (my birth country allows that) and voted on every single election until I immigrated to the US - and then voted on every US election since becoming a citizen.

Do you think there's a correlation between having more leisure time (living from rent) and having more ability to do politics?

Do you think blaming the renters for not voting is the most constructive way of going forward, or does it reinforce the status quo?

At least where I live, the “bank of mom and dad” either use their home equity to help their kids buy OR the kids are banking on getting the family home when they die.

We’re in too deep now. We basically painted ourselves into a corner where the economic engine is so intertwined with rising home prices that nobody wants the gravy train to end.

My best guess is tenancy laws change to be more and more in favor of tenants (SF, NYC) securing near permanent housing for current renters and massively disincentivizing an increase in supply of new rental units., completely screwing over those that come later.

Basically kicking the can down the road another few decades.

At a certain point, if landlords strangle renters it can make hiring hard (workers can’t afford Cost of living if rents are too high), thus making the business environment uncompetitive.

Will the business community have more power than landlords?

I think so, eventually.

Homeowners and renters of course have the exact same politica power, one vote each.

If renters are for whatever reason choosing to not exercise that power, what can one do? They are free to vote, please do.

That said, I always vote and not once has there been anything on the ballot on whether to build more in my town, so it's not like it matters on that front.

That would be half of the 70-year average. 5 is the norm, and it never got below 4. And you opt for half of the lowest point ever?

Gradual rent control with a point system works just fine.

Personally I would like to see renting [gradually] changed into lease/buy. That I've paid the value of the house 3 times now (and the construction cost 7 times) could mean I own at least some of the house? Doesn't seem unreasonable.

We're in a weird place in the US where young people are unwilling to flex any political power to stop elder people from financially taking advantage of them.

Then their kids will have 4 kids, and you'll need 16x more units with respect to where you started.

Few generations after you have a much deeper problem that the one you started with. Now you live in a country with a population of over 1 billion, where protests cannot be controlled anymore and now you need a totalitarian regime with a massive surveillance and censorship apparatus to keep things under control.

The alternative is that everyone is stressed out and feels the pressure of a system that is over capacity.

Have you heard of Earth day? In 2022, it was April 22. It means that by April 22 we already consumed our environmental budget for the full year.

If we continue like this it's not going to be long until there's mandatory population control.

NOTE: this was edited

Trouble being, this most likely takes the form of steeply rising taxes, which are ever-unpopular, and needs careful design. I also suspect just about everybody aspires to “make it” and then stop striving; this is somewhat antithetical to that (although the leak would be tiny at regular-people levels of wealth)

I agree with your comment, but I enjoy the irony of it even more: https://en.wikipedia.org/wiki/Lizzie_Magie#The_Landlord's_Ga...

TL;DR Monopoly was based on The Lanlord's Game--a board game demonstrating the issues with land monopolism.

> In 1906, she moved to Chicago. That year, she and fellow Georgists formed the Economic Game Co. to self-publish her original edition of The Landlord's Game.

Real estate speculation is just such an utterly unproductive endeavor just on the face of it, it's incredible it got this bad.

4. Empty units isn't really a big problem. 4.5% of NYC apartments are vacant, the majority of those due to structural reasons such as tenants moving or repairs. The historical rate is around 3%, it's quite hard to get below that.

The solution is simple. Build more units. Relax zoning requirements, incentivize density where it makes sense.

We got into this hole by making it illegal to build. For example, it is illegal to build a building with 5 or more homes in 90% of San Francisco. (Buildings with 3 or more homes are illegal in 70%.)

I appreciate galaxy-brained legislation as much as the next policy wonk, but the solution in this case is simple. Making it legal to build homes → greater supply of homes. Greater supply → lower prices.

Ever notice that cars are not that expensive, even though many people absolutely need them and they're very complex machines with high safety standards? It helps that it's legal to build them.

Our current situation is like if we made it illegal to produce new cars. Cars would get really expensive, and you'd had a bunch of people saying maybe you shouldn't be able to write off your rental car depreciation, or own a car you aren't driving, and that producing more cars can't possibly be the solution because most new cars are "luxury cars" and how exactly does more luxury cars help the car affordability problem again?

Sorry, that got off the rails a bit. It's possible that some of your suggestions would be necessary too. But when you find yourself in a hole, your first step to getting out is to stop digging.

At least for residential R/E in the US - you cannot depreciate land from taxable income.

> Owners pay taxes on the claimed lease value, regardless of current occupancy. This would disincentivize owners from just sitting on dozens of properties refusing to lease because nobody wants to pay their unrealistic exorbitant rates.

You're misunderstanding the point.

From an accounting perspective, you can pretend unleased units have revenue - and that vacancy is an expense.

You can get loans on your revenues (imaginary money in the case of R/E).

R/E speculators want as much debt as possible - because they know that debt (especially leveraged) at interest rates typical of the last 12 years was the free money cheat code.

This incentives them to have empty units at 100% above market rates - because they can qualify for twice as much debt to buy more properties to do the same thing - to speculate further on leveraged appreciation.

It's also the reason you regularly see building with outrageous rents yet they're giving you 3+ months free. Why not just lower the rent by 25%? Because then you qualify for 25% less new debt (which in many cases they need new debt just to cover their deeply negative cash-flow).

Not really. Try using "vacancy" instead.

This would reduce the housing stock.

The way capitalism works is that some people have excess capital, and they invest it. Housing is one such investment. People don't need multiple houses to live in, so multi-property owners rent out their investments, which is great because there are many people that can only afford renting, not buying.

In the uk for instance, the exact same new house, exact same materials, can be 100k GBP less in a cheaper area. Or even half in extreme cases.

Interesting related graph: https://infogram.com/1pqdpn20vkmlelcq6qx7jzwz9pf00g9xnq5

Although we're currently in a frothy situation, scaled out a bit, it's not clear that housing prices are growing more than general inflation when adjusting for square footage. What _has_ happened is A) houses have gotten bigger and B) people per household has gotten smaller.

Here in the Netherlands, an ordinary home, which is not an apartment and not even necessarily a fully stand-alone home cost 400K EUR minimum. That's land, material, labor combined. And you'd have a hard time actually building it due to all the shortages in both labor and material.

A big part of that 400K is land cost. Land that is typically given out for development by the municipality. It's one of their main revenue streams. So that means you can't make land cheaper without it directly coming at the expense of local taxes. And they're already running deficits even with these high land costs.

We have a plan to build an additional 1 million homes in 10 years, but it can't be done due to shortages.

The other thing nobody seems to talk about is what happens during an economic downturn. In the aftermath of 2008, almost nothing new got build. After all, why would a commercial developer build something without a buyer? Meanwhile, the demand for housing is still there and growing (population growth), it's just that people are unwilling/unable to step in, temporarily.

This piled up backlog is the reason for the current drastic shortage. As is the case for construction workers. All laid off during the downturn, and didn't come back.

Guess what will happen during the next economic downturn? Yep.

My point: there will be no point of supply meeting demand or even over-supply.

Luxury is just a marketing term. Luxury apartments are the cheapest apartment that are legal to build. Stainless steel appliances and quartz countertops are a rounding error in construction costs.

An actual luxurious apartment does not have to call itself a luxury apartment, the price being multiple standard deviations above the mean speaks for itself.

Adding to this.

The government is always there, with its hands out looking to get a slice of the real-estate market.

- Property taxes

- Land transfer taxes

- Development fees

And once you buy your house, any attempt to improve it could trigger more government involvement. Building permits, inspection fees.

Your point is spot-on. I think a big part of it is "keeping up with the Joneses". Everyone wants that 3,000 square foot house, and naturally it has to be within walking distance from work.

Lastly - Location is a a major problem.

Here (Ontario) the common complaint is "i cant afford to live in Toronto" - Living in Toronto is NOT A RIGHT. No one owes you "affordable housing" in Toronto to avoid a commute. A Lot of people commute on the GO train daily..

It always has been and likely always will be an assert class - it can be sold later so it's an asset.

For well over 100 years the inflation adjusted price of new housing has been a quite similar rate per sq foot, despite the quality and safety having increased many fold over that time.

So clearly, the problem cannot simply be that housing is an asset.

Which is like 90% of US mortgages [0].

[0]: https://www.financialsamurai.com/adjustable-rate-mortgages-a....

If wages go up enough, then you keep the house you have with a low fixed 30 year mortgage (because the mortgage can’t be replaced), and buy another when you want to move.

Any new significant city will need billions if not tens of billions of dollars on transport links, water, sewer, etc, if there is even a way to bring a city sized amount of potable water.

And then you have to convince people to actually move their residences and jobs there. Most people don‘t like betting uprooting their whole family and social lives on a total unknown. History is littered of examples of new failed cities that in the best case scenario became really far bedroom communities, or in the worst case didn‘t get off the ground.

If we want new cities to be built, what is needed is high capacity rapid transit. For example, build a high speed rail line from Chicago to St. Louis, and watch as the small towns in between become cities.

"You will own nothing, and be happy."

However, it won't change how much you pay/month for the property as people will pay whatever they can afford to per month to live where they want to. It's just more of that payment will go to interest. So yes, the list price will crater but the actual cost to buy the place will be the same.

The only person it really benefits is cash buyers which most people aren't. This could actually make homes less accessible to most people as their mortgage bid will never beat a cash bid.

This unlocks the possibility for serendipitous connections. It is awesome when you can meet a founder, a leading engineer, an investor, a designer and a PR person in a coffee line, forming a new company before finishing your morning coffee.

Talents concentrated in one place gives significant boost to their productivity. This is called a "proximity bonus" in video games; building dependent factories in the nearby slots gives them the productivity boost. This is what US is missing by being nimbyistic.

I think we should return to the 1950s ideas of a futuristic cities and invest in building giant arcologies, where entire Earth population can move if they want to, and where the least paid McFastFood worker would afford to buy a minimum apartment.

Jobs weren't "concentrated" per se by any form of planning or centralized action, employers simply shifted to urban centers because the amount of skilled workers and other necessities (such as high speed Internet, universities, road and rail infrastructure) was vastly higher there than in dilapidated flyover-state villages. Additionally, rural areas got devastated by mechanization of agriculture following WW2 and later-on the closure of manufacturing plants and the mining industries [1], which led to a massive rural flight movement as everyone who could fled to the only place where employment was available - urban areas.

The fix to the housing crisis would be to invest in rural areas again - there is no limitation in the nature of the work at all that stuff like a callcenter or a bunch of programmers can't work from some rural town, but as long as there is no actual high speed Internet or no amenities (healthcare, education institutions for children, entertainment) worth their name employers won't establish shop there and employees won't move there. Would you, even for free rent, move to some small town where your children have no perspective?

[1] https://www.theatlantic.com/business/archive/2012/01/where-d...

In the UK, jobs used to be at local factories and offices. It was rare for people to move for university then move to another city for work.

My Grandad worked at a local electronics factory. My Dad worked at a local auto parts refurbishment factory. My mother in her early 20s worked as a secretary for the emergency services. Moving away for university and then again to another city for work was almost unheard of. You worked and lived close to your family. Of course the 80s came along and everything changed.

The reality is that housing is the main mechanism used by the older wealthy folk for their pensions, and subsequently transfers wealth up through the generations.

What we need is a way for all that unproductive capital used to directly fund the businesses of the young, growing the real economy (rather than the financial).

Alongside that, additional legislative arrangements to provide security for renters.

Pension pots should be a return on investment, not speculation.

There is a kind of home that can float anywhere though, I'm quite far long in my plans to move onto a sailing yacht. While my main motivation is a lifelong love of sailing and a desire for a nomadic lifestyle, I'd be lying if I said a small part of my motivation wasn't that shovelling money hand-over-fist into keeping a boat I own seaworthy is much more satisfying than shovelling money hand-over-fist into some random baby boomer's BTL portfolio every month!

Not really.

Let's set up a quick boundary condition. Since you mentioned most people, you're talking about the lower-middle and middle classes. Let's keep the discussion on them. The working poor have it bad almost everywhere, and I think we both agree that there's more that can be done in most countries to support them.

For someone with a median household income, it's still very much possible to finding housing that is less than 25-30% of their household income. This is true even in high cost of living (HCOL) areas. Now, there are some cities or sections of cities that are unaffordable for someone with a median income, but these are very much the exceptions.

To put it simply, if you have a median household income for your country, in almost all locations in almost all OECD countries, you earn enough to follow a household budget that allows you to save 15-20% of your take home pay. If you can't save a portion of your income and you're not living off of a below-average wage, it's very likely that you either made decisions that aren't conducive to saving (e.g., you're house poor, car poor, or your discretionary spending is too high).

> along with healthcare in the US

Quality health care is expensive in most countries. The US has its own set of issues that make health care more expensive than in most other countries (e.g., population density), but it's not orders of magnitude higher. It's also offset by the higher salaries that people in the US earn over, say, the average EU state.

So why are people in China paying hefty loans for apartments that haven’t even been constructed yet? And now due to the housing bubble popping, construction has halted in so many parts of China that there is an epidemic of Chinese people who are refusing to pay their mortgages, and banks are refusing to let go of people’s money because fractional-reserve banking. China sure do have a serious housing crisis that’s arguably worse than that of the west.

No it isn't. Mortgages are not the only kind of fractional reserve banking. The currency is also fiat, its backed by the market's belief in the strength of the US government and economy. Gold back currencies also had pricing shocks, inflation/deflation and a myriad of other weird issues.

You're parroting the least informed version of Austrian Economics.

The mid century boom in housing is almost certainly a direct product of the inflationary and easy credit economy that was created by loosening the gold standard.

Separately, GPU scalping is (was) only happening because of cryptocurrency booms which everyone knew were temporary. Not many people are naive enough to scream for AMD or NVIDIA to spend billions of dollars on new fabs because of a temporary trend. The housing supply issues, on the other hand, have been brewing for decades and are not temporary.

This is certainly untrue. Possibly housing has never been this particular problem in this particular place. Housing affordability plagued Germany of the early 20th century. Low quality housing of the type not possible to obtain in the US was widespread in US cities before the last 50-70 years.

>Population is the problem.

Misanthropic nonsense. Show us your 'math', if you're so sure of yourself. And better yet, state your underlying assumptions for all to see.

>This is because the 'rich' people countries are having a population explosion despite the native 'rich' people havong a negative birth rate.

Can you list these rich countries with 'population explosion[s]'? Population growth rate in the US is at its lowest since 1960 (start of the readily available data.) Considering the shift of the population toward the elderly in the rich welfare states like the US, we actually have a reckoning coming from too few working age people.