Comment by sorcerer-mar 3 days ago
Supply constraints don't explain housing prices: https://www.nber.org/papers/w33576
Land prices rise with income. Through all places in all points of history.
The solution is a land value tax.
upvoted then realized you are promoting LVT. this is why i think LVT is a terrible idea: https://news.ycombinator.com/item?id=44532444
land value is only a small part of housing costs.
I don't think you understand LVT based on this "not to mention the political debates/decisions over what constitutes "fully utilized"."
LVT doesn't require any such determination.
Anyway, I'm not opposed to the solution you mention as well. We should subsidize supply of housing, and supply at any price will serve the same purpose of driving prices down, so yes I agree we should build public housing for higher price points.
Land prices rise with income but housing constraints mean each family needs more land. Just look at the rental market in austin collapsing 20% while incomes continue to rise to empirically falsify your working paper.