This is circular reasoning because homes are rising in value due to lack of supply. With enough supply it would not make sense to sit on an empty home as it would not make a good investment.
Why do people sit on empty homes then, in the face of rising supply of luxury homes? The demand side of the equation is unable to finance a purchase. The wealthy can wait until they get the gains they want. There's nothing circular about it.
They're sitting on empty homes because there's not enough supply. Without solving the supply issue the wealthy will keep using residential real estate for investment purposes.
The wealthy aren't waiting around to buy/sell houses per se, they're trying to get a maximum return on investment. Adding enough supply so that housing isn't an investment vehicle removes those incentives.
The wealthy will not solve the supply issue of luxury apartments as they do not want to flood the market, the parent I responded to initially mentions this.
Who will add luxury apartments or affordable apartments except for the already wealthy? Who has the incentive to build enough luxury apartments, to stop housing behaving as an investment vehicle?
"The wealthy" are only partially contributing to the housing crunch. The majority of home purchases are not made strictly for investment purposes even if it does happen. All types of housing stock is needed, not just luxury — The reason luxury is what's getting built is because those are the projects that "pencil out" due to high costs.
There are many many factors that are contributing to high costs like euclidean zoning that took off when the US had less than half of its current population. It's literally illegal to build multifamily housing in vast swaths of the US.
It's very clear that some sort of housing reform is going to be needed, as overly restrictive zoning, suburban sprawl, and it's associated housing costs have become unsustainable.
This isn't some fantasy either, Japan has very reasonable zoning and housing is generally not an investment vehicle there. Sure there's other contributing factors like a declining population, but it all leads back to supply and demand!
The point I've made, is that demand is not just people wanting houses, it's also their ability to pay. There's some magical thinking out there that if investors build 'enough' luxury homes the poor will be able to afford homes. This is a falsehood.
I can't speak to Japan, however I don't think it ever accepted the level of homelessness that the west takes for granted. I would wager that the Japanese government builds more housing projects for the poor than the west.
