Land is scarce, but we are making residential floor space far more scarce than it needs to be through restrictive planning laws. Simplifying it a little but, say all 20M people in the greater New York area want to live in Manhattan, which has a population of about 1.7M. That means that people will bid up the price of housing until only the top 1.7/20=8.5% of people can afford it. We can pack manhattan full of sky scrapers and get a lot more people in there.
On affordable housing: there’s no such thing. There are enough millionaires around that will live in a 600sqft apartment if it gives them the lifestyle they want.
In fact, it might blow your mind to know that building luxury accommodation actually lowers house prices as well as affordable housing, because wealthy people have to live somewhere, and if all that’s available is mid-range housing then they’ll live in that. That will push the middle into the lower income housing, pushing the lower income people out of the city.
Additionally, if you only build cheap housing to make it affordable, you end up with a city of cheap housing. If you build a ton of luxury housing, then in a few decades you have a ton of older high quality housing coming into the more affordable range as “luxury” buyers follow the new luxury construction around.
On affordable housing: there’s no such thing. There are enough millionaires around that will live in a 600sqft apartment if it gives them the lifestyle they want.
In fact, it might blow your mind to know that building luxury accommodation actually lowers house prices as well as affordable housing, because wealthy people have to live somewhere, and if all that’s available is mid-range housing then they’ll live in that. That will push the middle into the lower income housing, pushing the lower income people out of the city.
Additionally, if you only build cheap housing to make it affordable, you end up with a city of cheap housing. If you build a ton of luxury housing, then in a few decades you have a ton of older high quality housing coming into the more affordable range as “luxury” buyers follow the new luxury construction around.