Except that's literally not all there is to it, that's just one component of the problem. It turns out housing is just a tiny bit more complicated than your first day of Econ 101. The half dozen empty skyscrapers lots of us pass by each day seem to indicate that.
"High Rent is just supply and demand" is the new "I could rebuild that whole app in one weekend".
Which components influence the problem here without ending up only being an influencer on the supply or the demand?
> It turns out housing is just a tiny bit more complicated than your first day of Econ 101. The half dozen empty skyscrapers lots of us pass by each day seem to indicate that.
I do not see where your example indicates that. In this case, an owner is not required to make his property, even if vacant, available on the market. That affects the supply in the market. That still comes down to basic supply and demand.
If all the relevant components "just" affect supply and demand then it's useless to analyze supply and demand. Take a step back and analyze those components.
From a practical perspective, I'm not sure further analysis is necessary either. Price, as determined by basic supply and demand principles, is a useful signalling mechanism even without understanding the underlying reasons.
In fact, understanding that it's all about supply and demand is a critical step for tackling this issue and allowing new supply. I see far more resistance to new housing from people who don't understand econ 101 than from those who do.
Though this is a basic neoclassical assumption, it is definitely not true for any of the markets that have seen the most extreme price inflation. "The fat cats" have limited supply in those markets, not by the old-fashioned oligopolist technique of buying all available land, but by the more modern and more corrupt technique of dictating their favored regulations to the local politicians and regulators whose elections and appointments they have bankrolled.
While it doesn't escape supply and demand, I'd note that most markets, especially those in the realm of international trade and money flows, are administered by governments and adulterated by politics.
Neither supply nor demand are objectively or scientifically measurable.
They're psychological and political positions, and both are reliably manipulated in all kinds of outrageous ways.
Most of the time the pricing signals you get from a market haven't just been filtered through these processes, they've been defined by them.
Now please explain how the decision to block proposed housing units near my office is not responsible for the prohibitively high cost of the units that did get through.
Prices are set by the relative leverage and political power of various competing groups, subject to local variations.
The usual rule is that investors and speculators have more power than developers, developers have more power than landlords, and landlords have more power than entry-level house buyers. Existing house buyers sometimes have local power which is more or less on the same level as landlords, with local variations.
Local planning laws and special interests can distort this relationship in various ways, but they can't change the fundamentals.
Two things can:
One is a change in government policy towards building housing to increase access and lower costs - which is unlikely, because investors and speculators tend to own policy. Even though asset inflation and boom/bust churn is a huge drain on the economy, effective national house building programs rarely happen, and when they do they tend to be literally low-rent, not middle class.
The other is a macro-level slump, which can take out the top level - but almost always at the cost of losses in leverage and power all the way down the chain, some of which lead to debt and/or homelessness.
Show me some examples of cities with high prices due to high speculator/developer/landlord power, that don't also have population growth and restrictive zoning.
And how does your theory explain the apparently enormous power of speculators, developers, and landlords in San Francisco, where they are subject to draconian legal restrictions?
How do you explain the apparently nonexistent power of speculators, developers, and landlords in a low-rent city like Milwaukee, where tenants' rights are minimal and developers can build pretty much whatever and wherever they want?
>investors and speculators tend to own policy
Are you suggesting that investors and speculators are secretly funding "grassroots" opposition to the developer ventures they also fund? Because the people who show up to planning meetings to speak against development at least present themselves as existing residents and tenants concerned about crowding, shadow, and gentrification.
>One is a change in government policy towards building housing to increase access and lower costs
So you agree that prices are kept high by government policy to not build housing.
Then how is what I said "not how it works"?
"We can fix this problem with simple government regulations" is also up there.