What we're witnessing isn't just an issue of localizing policy failure or even state policy failure but systemic failure. And we just need to look at China for how to do this correctly. China treats housing primarily as providing a place for people to live, not a speculative asset. In the West, housing is largely a speculative asset where everyone from investor companies to individual homeowners become incentivized to make housing scarcer and more expensive at every level. China, on the other hand, makes it more expensive and more difficult to own second and third homes. Now you might be tempted to object and point to things like the Evergrande bubble. And that's actually evidence of success not failure. Xi Jinping quietly changed China's policy, starting around 2014 to focus on living not investment, and Evergrande was essentially allowed to default because housing access is a priority over investors. You really see this plays out with trains. Chengdu has the 5th largest (by rail length) metro system in the world. It didn't exist before 2010 . China standardized rolling stock so there's no time-consuming and expensive procurement process and there are economies of scale. China has spent less than $1 trillion building ~50,000km of high speed rail. They initially bought high speed trains from Germany and Japan (IIRC) but now they make their own. To compare, the California HSR, if it ever happens, is estimated to cost in excess of $130B. The point I'm getting to is that in the West every aspect and level of this is treated as a profit opportunity, which ultimately is a wealth transfer from the government to some company. Procurement, maintenance, track building, land acquisition, track maintenance, station building and so on. These are all state enterprises. Back to housing, IMHO nothing will solve this problem so long as housing remains a speculative asset. There'll simply bee too much resistance to change.
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