the builders are the ones who provide housing and collectively they make nowhere close to the amount the houses they make sell for
this post was submitted on 17 May 2026
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And that goes double for the actual carpenters, plumbers, and electricians that do the actual building.
No matter how much builders make, if there is no limitation on the use of housing as speculative investment assets there will never be enough houses because speculative investors don't buy houses for people to live in, they buy houses to ride the price bubble and sell later for a profit.
Just look at what has been going on in London (UK) for more than a decade - certain buildings made for sale to investors are almost empty of residents even though all the units were bought: the buyers simply don't live there and don't even want to rent because they don't want the hassle of tenants or the loss in value from the apartment actually getting used (this is more so in the Luxury segment were there's probably more units than people living in London who can and are willing to pay luxury rents)
With speculative investment the Demand side of the housing market is not limited to "how many people need a house", it's limited by that PLUS "how much money do speculative investors have to invest in housing", so that's basically how much money all high net worth individuals combined are willing to put in it plus how much money can banks lend against real-estate as collateral, and in this new Era of High Inequality the first number is huge and given that banking nowadays operates on Fractional Reserve Banking rules (basically banks can create from thin air up to 97% of their loans) that second number is even more larger.
Investor demand and cheap finance on the Demand side of housing are driving the realestate bubble way more than reduced construction is driving it on the Supply side.
It depends on where you live. Building in the Netherlands is a compliance hell hole and you end up with a very large portion of the cost being getting permits, doing environmental assessments etc.
In the UK you have to go through a local council that will refuse pretty much everything you want on top of the Netherlands issues.
This is pretty much the reason why builders are focusing on high value and luxury apartments since a bigger project benefits from scale on the permitting side.
Builders are doing pretty good. When you can ignore minimum standards and sell a house for a million that you spent a couple hundred thousand to build, you can rake in the cash.
A friend of mine who has some money mentioned maybe getting a rental property at some point. I told him I think that's immoral and he didn't understand. He insisted that he would charge below market rate. By his logic, the market rate is like a neutral point for morality and below market rate is morally good. But if you charged above market rate and got a renter...that's just the market rate now. There's no way for him to be immoral by his standards.
I told him I thought that a fair rate was the cost of property management. Basically the cost of maintenance and the administration of the property. It's arguable that the cost of property insurance should be included since a lot of maintenance will be through your insurance. He of course mentioned that wouldn't even cover his mortgage. I told him I don't believe people poorer than you should be buying you an asset. Why don't you get them to contribute to your 401k while your at it.
Friendly reminder that the USSR provided housing as a right, people accessed their housing through their workplace union ensuring fair distribution and proximity to the workplace, and housing costed on average 3% of monthly income, or 7-10% including utilities. Urban plans prioritized walkability and public transit, green areas, high density and availability of services. Homelessness was de facto abolished, people weren't segregated by income in rich or poor neighbourhoods, and literally everyone was entitled to a warm living space, at the minimum in a communal dorm.
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Exactly, i have no problem with homebuilders, we need new homes being built. The problem is using money you inherited from your ancestors to price people out of homes they need to start their own families and then renting them out for a profit.
excellent use of the godzilla 2 cover, the game rules too
"more than it's worth" yeah the solution is pricing necessities for human survival FAIRLY....
And city governments help them to raise prices and maintain their cartel
When the premise is to grow GDP, raising housing prices is good policy.
This is criticism of capitalism and GDPmaxxing, not an endorsement of landlordism.
GDP is such bs.
Our city council, and many city councils, work with big landlord corporations to maintain a certain amount of empty houses. A big component of this is YIMBYs in our city who would push their own children in front of a moving bus if it meant a big developer doesn't pay taxes to build "luxury" apartments in gentrified neighborhoods. Said apartments are required to offer a certain number of "affordable" units son the poors can have a taste of the good life, only $2500 per month for a family of 3 making up to 26k per year, on a single bare unit in a mid sized Midwest city, but don't try to use the front door or the gym.
You get what I'm saying? The affordable housing rules are what keeps these units empty, floating the value of the other units. When distributed city wide, it's a scheme to keep rents high, while the companies building the new buildings don't pay taxes for 25 years.
All the while, touting affordable options to families in need. A couple years ago our city received $14M from the state to provide affordable housing, and gave $11M of it back a year later. And all the while, the only housing people can afford, gets worse and worse.
Regulations differ between capitalist countries, results don't: housing is unaffordable everywhere and landlords are rich all over Europe and North America.
The problem is not with the specific legislation when 25 different legislations give the same result.
Rent seeking is something virtually any economist, left or right, agrees is a cancer on an economy.
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