One thing to note is that it’s the land itself that appreciates. The housing built on top of it generally doesn’t. That is, structures generally depreciate unless labor and material costs rise significantly.
So, why not cap the profits that can be gained from squatting on land? Or increase taxes on under-utilized land? Then, wouldn’t land owners have incentive to build more housing?
Density-restrictive zoning increases our demand for land.
I, for example, only need about 1000sf of living space. In city where the minimum lot size is 3000sf and maximum FAR is 30%, my demand for land is 3000sf. However, in a city where 12 story buildings are abundant, my demand for land is only about 100sf, including proportionally allocated common area space.
By not allowing dense housing, city zoning codes are making affordability illegal by statute.
Maybe that would help in less developed areas, but I doubt it would work in a place like Boulder, CO. Boulder rent just keeps getting more and more expensive. There are several reasons for this but most of the land is being used already. Changing zoning laws to have more mixed residential, office, and retail would probably help.
So, why not cap the profits that can be gained from squatting on land? Or increase taxes on under-utilized land? Then, wouldn’t land owners have incentive to build more housing?