The author is right that treating housing as an investment is a mistake, but doesn't take their analysis far enough. In the case where no new houses are built and their house appreciates significantly, after they sell their house _they still need a place to live._ Their next house will cost just as much, regardless of if they rent or buy, effectively eliminating all the gains they made selling the first house. The only real ways out of this are to move somewhere else with lower housing costs, or die. And really, it's worse than this, because their children will need housing too unless they're ok with them living at home forever.
The mentality that housing is an investment good has created a lot of perverse incentives (buy as much house as you can, you'll make more money!), that we really need to curb so that we can lower the cost of housing for everyone. Housing needs to be a consumptive good, where much like cars there's incentives to drive prices down and keep overall spending on the sector low.
I think you'll find it really tricky to remove the idea of land as an investment.
And that's what we're really talking about when we talk about housing as an investment (the land is appreciating, the house is a pile of goods that's slowly rotting)
There are lots of houses (and lots of land) that no one wants and is dirt cheap.
There is lots of land that is very attractive because of the investment made in it (structural improvements, clearings, landscaping)
There is also lots of land that is very attractive because of the investment made in the areas surrounding it (hospitals, entertainment, jobs, infrastructure).
The problem is that at some point, people actually invested time/money/resources/energy/etc into making those areas "attractive". So now those areas are in high demand and the number of dollars seeking them out is far in excess of the amount of the space available, so prices rise.
As a side note - if people can't make land an investment through housing, it absolutely does not guarantee that folks will lower the price of houses in those areas. It may well mean that they remove the housing and make the investment something else (industrial/agricultural/power).
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So really - to remove the idea that land is an investment, you have to remove the population growth in an area. Otherwise it's unavoidable. There is a limited amount of land, and more people competing for it.
When people say things like "Housing isn't an investment in [area]" most times they really mean population is decreasing in that market (japan is a perfect example).
The mentality that housing is an investment good has created a lot of perverse incentives (buy as much house as you can, you'll make more money!), that we really need to curb so that we can lower the cost of housing for everyone. Housing needs to be a consumptive good, where much like cars there's incentives to drive prices down and keep overall spending on the sector low.