There is a basic accounting truth at the heart of this: If land and housing are good investments -- that is, they return any amount greater than wage growth -- then at some point in the future, wage income workers will not be able to afford housing.<p>There is no getting around this truth. If housing and real estate are a good investment, eventually all wage income workers will be homeless, or will be forced to leave a region. So we need to make sure as a society that housing and real estate are _not_ good investments.<p>Prior to the 1980s, real estate was not a very good investment. There might be areas that were great investments, but there was no generalized appreciation in land and housing.<p>In particular, it's an obvious sign of a broken market when structure prices are appreciating. In a functioning market, structure prices should largely decrease in value over time, with the only exceptions being actual improvements to the property.<p>All of this is the same point as the article, that the basic issue is supply and demand of housing, and that supply problems are exacerbated by homeowners that have a large financial interest in restricting supply, and lots of tools at their disposal to prevent new housing.<p>Another important point is that while individuals might be responsible for improvements to structures which increase their utility, aesthetics, or value, in almost every case _land_ value increases are the result of large-scale societal factors, and nothing at all to do with any individual actions.<p>The question becomes, why as a society should we allow land value increases to be captured by individuals? The land has gained value because of societal changes.<p>If a new light rail line is developed by local government, land values soar within 4 blocks of the new rail line. Why do we allow that value to be captured by individuals?<p>If a region has great public universities, and high-paying companies flock to the area to hire those workers, land values soar. Why should individuals capture that value?<p>Rather than taxing property, we should tax land. Taxing structures creates a perverse incentive against improving structures. And land is the thing that is actually scarce. Taxing land would naturally encourage landowners to build higher densities where land values and demand are high.<p>And when land is sold, we should tax a very large amount of the appreciation in that land value, perhaps 90%. Society is what earned those gains, and society should reap the reward. Individuals can capture the value of increases on improvements to structures, but there's no reason they should earn a windfall from the societal actions that increased the value of the land.