After decades of Federal policy to encourage investment in housing, the consequences are getting harder and harder to ignore, yet the blind faith in these sorts of paternalistic policies remains unabated.
The many tax breaks and loopholes for real-estate investors resulted in overbuild in many parts of the country... these were the parts that were hit hardest in the crash of 2008.
Not only was this a big misallocation of capital which robbed other industries of investment for decades, but the response to the crash was to prop up real-estate prices through other drastic measures.
These massively inflated prices enriched many of the landlords in urban areas, greatly increasing their political clout and ability to push for regulations that protect their incomes and harm the public.
Meanwhile, transit systems and roadways declined, further increasing the value of urban real-estate because of the great inefficiency of getting to and from a city if one lives outside of the city.
So now, real-estate-fueled urban price inflation has altered mobility patterns creating further economic distortion. Software engineers in SF make high salaries but live a lower standard of living than those in other cities:
The many tax breaks and loopholes for real-estate investors resulted in overbuild in many parts of the country... these were the parts that were hit hardest in the crash of 2008.
Not only was this a big misallocation of capital which robbed other industries of investment for decades, but the response to the crash was to prop up real-estate prices through other drastic measures.
These massively inflated prices enriched many of the landlords in urban areas, greatly increasing their political clout and ability to push for regulations that protect their incomes and harm the public.
Meanwhile, transit systems and roadways declined, further increasing the value of urban real-estate because of the great inefficiency of getting to and from a city if one lives outside of the city.
So now, real-estate-fueled urban price inflation has altered mobility patterns creating further economic distortion. Software engineers in SF make high salaries but live a lower standard of living than those in other cities:
https://www.codementor.io/blog/best-cities-software-engineer...
Who is benefitting from all of this? The landlord class, builders, and construction companies.
When you see a politician wearing a hard hat chances are that politician is helping enrich those interest groups at the expense of everyone else.