Unshakeable Realities
There are a lot of ideas that have been sold by ideologies of every political stripe. Some of those ideas sound good, but are based on fundamentally faulty logic. Whatever ideology you ascribe to, it must account for some realities.
Housing & Population
An Investment Housing Property Must Appreciate
In any economic environment where housing can operate as an investment, it must reliably produce a net positive amount of value in excess of the possible interest on savings and the rate of inflation.
If it does not do this, it is not an investment.
So, if houses are considered investments, then the above must be true - otherwise people would stop using them as investment vehicles. And, since an owner cannot arbitrarily make a return from rent (as they can only charge as much as the market will support), then appreciation must come from an increase in capital value.
As possible rent returns are inelastic relative to purchase value, then the more that capital value increases, the more that investment return is dependent on increases in capital value. This creates pressure for capital value appreciation to accelerate ever more quickly.
Therefore, the nature of housing as an investment is that housing must increasingly become unaffordable.
Replacement Rate Requires Early Family Formation
A stable economy requires a stable population. Without migration, a stable population over the long term requires couples to have enough children to maintain the replacement rate for births (~2.1 children per couple). In any developed economy, irrespective of culture, career, or other, the simple statistical reality is that this replacement rate is achieved when the average ages of couples that start forming families is 25 years old.
If the average couple cannot begin forming a family at 25, the country will have a declining population trend.
Importantly, averages are used here. Trends are taken over 20+ years - so small deviations and variations in the data set are not arguments against this point.
Couples also seek stability before committing to forming families. This means either home-ownership, or at the very least long-term stable living arrangements where there is no threat that they will be forced to move on someone else’s whim.
Therefore, having a family home must be affordable at 22 years old, fresh out of training/university, while working their first real job.
Conclusion:
Housing as an investment vehicle is incompatible with a stable birth rate.
If the price of houses is continuously going up - the birth rate is continuously going down.
This is not ideological, this does not make a value judgement - this is simply a mathematical reality. If your ideology wants house prices to keep going up but also somehow wants people to have more children, then your ideology is living in fantasy land. These things cannot coexist.
Land & Productivity
Everything is Affected by Land Prices
Every productive industry in existence uses land. If something is created, it is created somewhere, and that uses land. Everybody has to live somewhere. Everything that exists has to be somewhere. No matter which way you cut it, land gets used.
Even services that run entirely digitally in some decentralised information architecture, still use processors that exist in a computer somewhere, with power that is generated somewhere.
Even in a hypothetical future where we might start building industries in space, those resources had to come from somewhere. Orbital space is not unlimited, and even in space some places will be closer, more convenient, and thus cheaper to operate from, making those spaces more valuable. So, in this sense, even space is “land” in the economic sense.
And everyone and everything must be able to afford their costs to keep operating.
Therefore, if the price of land is always increasing, then the cost of everything must always be increasing.
Unrestricted Extraction Must Undermine Productivity
Producing things takes work. Productivity operates in the real market, where competition, logistics, and consumer choices determine what succeeds and what fails.
Extracting wealth produces nothing. Without productivity, there is nothing to extract. So, to extract wealth there must be productive enterprise. Extraction is how the wealth created by productivity is redistributed.
GDP, and the economy broadly, is measured in ways that capture both production + extraction. Therefore, “the economy” as we conventionally refer to, it is both of these combined - while the true economy is limited to production. Both are meaningful in their own right.
Money is all the same on an individual level - whether you earn your wage from a productive activity, or an extractive activity, money is money. Some amount of extraction serves important functions in an economy (banks provide important services and are entirely extraction-based). Some amount is actually necessary to maintain an economic system at all (some form of government is unavoidable, and taxation is a form of extraction).
However, if the laws and taxes are set up so that it is easier to extract more than gets produced - then the true size of the economy is always shrinking proportionally. This means every productive action has ever larger chunks extracted from it over time.
Therefore, if we allow wealth extraction to grow inside a feedback loop, then the cost of production must always be increasing.
Conclusion:
If it is possible to profit from land value increasing, then the cost of everything must always increase.
Since merely owning land produces nothing, profits from owning land must be extractive by definition. Furthermore, if merely owning land can produce profit, then the price of land must always be increasing (because profit can only come from sale price).
So, if the cost to acquire land is always going up - then the cost of everything must also always be going up.
This is not ideological. This statement does not propose how to prevent land prices from rising, it does not even propose that you should. It is a simple mathematical truth. If your ideology wants to profit from land prices, then it must find a way to contend with the inevitably increasing prices of everything else.