Housing and land costs have become inflated to the point where they would be very difficult to fix. It would be subjective to say where prices would ideally be. A $300,000 house might realistically be priced at $200,000. So, if measures were taken to straighten out the discrepancies, people and businesses would lose money. Who is going to vote for this?
A major contributing factor to these inflated prices is long term capitol gains tax policies on residential and multifamily real estate. Policies should probably be set back to those similar to the early 1990's, The 0-15-20 rule should be more like 0-20-35, with the 35 due to growth in inequality. The $250,000/$500,000 exemption should be eliminated. The best way to do all of this would be to phase it in over 3-5 years so people can work with their finances.
Most of the non-institutional investment in residential real estate is by small to medium size investors. Larger investors invest less, with mega-investors representing a minimal share of the investments in homes. The percentage of home sales to investors in 2025 was about 1/3, and is growing.
There are more investment options now than ever. People can choose between stocks, cryptocurrency, derivatives, etc. Small businesses are investments. Real estate shouldn't be such an attractive investment to where it causes a major affordability problem.
More housing isn't always a solution. Underlying land costs are also an issue. Here, something like a 0-20-35 rule would help keep wealthy investors from inflating land values.
Some people probably don't understand the issues with the current structure. If someone buys a house for $200,000 and sells it for $300,000, then they buy another house, they need to pay more for it. Unless they're moving to a nursing home or something, they're not really getting ahead. Also, a more expensive house means a much more expensive mortgage, if financed, because there's more interest costs on bigger loans.
Using a simple loan calculator, the interest paid on a 30 year loan at 6% interest for $300,000 with no down payment is $347,514.57. The interest on a 30 year loan at 6% for $400,000 with no down is $463,352.76.
These policy changes would result in more affordable houses and multifamily units being built as well. Smaller homes on smaller lots, more affordable apartments and fewer mansions and McMansions.
