It isn’t a free market in real estate that has caused the rise in housing prices and the drastic shortage of houses. It’s government policy that distorts the market and restricts development...
I agree with most of what you're saying but let me give you a counter factual. I am looking to increase the housing supply by converting some garages that I own to units. As I analyze the math, it doesn't seem to be worth it. I can get better returns on capital in other areas with less risk. I don't know what the solution is, but we need to make it less expensive to build.
I don't know about every country, but in South Africa we could lower construction costs by first redirecting law enforcement resources away from petty and costly visible policing initiatives, and into professional investigation and syndicate-breaking. This must be coupled with removing laws that enable land invasions like the PIE Act, and localisation laws that enable Construction Mafias to threaten developers, driving up construction costs.
If we crush the Construction Mafia, then the cost of construction will drop already.
Then, we need to encourage more people to enter the construction industry, raising the supply of workers which will cause wage competition and drop the cost of labour. This can be done by breaking the domineering hold that so many unions have over the government, and deregulating the labour market.
I think those two policy changes alone would drop costs substantially in South Africa.
I agree with most of what you're saying but let me give you a counter factual. I am looking to increase the housing supply by converting some garages that I own to units. As I analyze the math, it doesn't seem to be worth it. I can get better returns on capital in other areas with less risk. I don't know what the solution is, but we need to make it less expensive to build.
I don't know about every country, but in South Africa we could lower construction costs by first redirecting law enforcement resources away from petty and costly visible policing initiatives, and into professional investigation and syndicate-breaking. This must be coupled with removing laws that enable land invasions like the PIE Act, and localisation laws that enable Construction Mafias to threaten developers, driving up construction costs.
If we crush the Construction Mafia, then the cost of construction will drop already.
Then, we need to encourage more people to enter the construction industry, raising the supply of workers which will cause wage competition and drop the cost of labour. This can be done by breaking the domineering hold that so many unions have over the government, and deregulating the labour market.
I think those two policy changes alone would drop costs substantially in South Africa.
agree. Check it out: https://exploringhumans.substack.com/p/do-you-hear-the-scream