Why have housing costs rose so much in the past decades?
In: Economics
Adding on to the main issues of low interest rates (for US at least). Places like CA have a lot of similar building restrictions/regulations which inhibit a lot of new housing development, especially in cities, that carpenter from Canada mentioned in this post. In the San Francisco Bay Area there has been an odd coupling of poor/rich interest groups thwarting new development. Rich don’t want new buildings because they are property owners and no housing surplus means prices only go up. Poor don’t want new buildings because they’re usually building in lower income areas where development = gentrification = rising rent/evictions.
Second thing I have noticed, and this is not something based on research, so entirely an opinion on my end and nothing more… With the boom of VRBO, Airbnb, and other services that make short term rentals easier, there has been a big growth in people buying homes to just rent them out. Kind of like a long term investment. There has also been a surge in property purchases from buyers abroad. Got so bad Vancouver had to ban it, same with New Zealand from what I’ve heard.
Anyway, both points above are related to the idea of supply/demand. Many things keeping supply low so demand only grows (especially in/around major cities) and prices rise higher every year.
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