I've come to the conclusion that high housing prices are pretty much the root of most of our problems and is probably the biggest factor in increasing wealth inequality. I came across the housing theory of everything recently [1][2]. Disappearing third spaces, out-of-control inflation. homelessness, etc can all be traced back to housing affordability being the primary factor.

I tend to abhor buying vs rent calculators. I always have. Why? Because of inelastic demand. You can't opt out of the housing market. Well you can. It's called being homeless. If you rent, you have in effect taken a short position on the housing market. If house prices go down, rents tend to follow and you're better off than those that bought. If house prices go up, you're worse off. That's a short position.

So, by buying a house, all you're doing is closing out a short position. You might argue "but you still win or lose depending on the housing market's movement" but that's not actually true. Why? Because if all houses double in value, you still own 1 housing unit's worth of wealth. You're actually no better off. Who is? Corporate landlords and those that own swathes of houses. But your "investment" in tdhe housing market is used to buy your vote. You have a tendency to become a NIMBY. You tend to think of rising house prices as "good" despite the ultimately destructive effect on society.

Once again, China has been proven to be correct. Xi Jinping said back in the 2010s "houses are for living, not for speculation" [3]. Remember the trillion-dollar Evergrande default? Have you seen Western coverage of Chinese "ghost cities" or how the Chinese real estate market has been in turmoil like it's a bad thing?

All that happened was that Xi quietly popped the real estate bubble and made it more difficult and expensive to own more than one home. Prior to Xi's reforms, property speculation was rampant. It's going to take years for that correction to work itself out but it is ultimately a good for China as a whole.

Oh and one nitpick about the "costs" of home ownership from this post. A lot of the things like the repairs are cash outlays but they also tend to improve the value so that's more of an ivnestment than an expense.

[1]: https://worksinprogress.co/issue/the-housing-theory-of-every...

[2]: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6571818

[3]: https://en.wikipedia.org/wiki/Houses_are_for_living,_not_for...