We would? Last I checked $1 can't even build some branches and a tarp.
You're ignoring, or haven't seen, the real meaning of his words.
Indeed, $1 houses will probably always be undesirable and poorly constructed. But, that doesn't mean $1 million is a reasonable amount to spend on a house.
The real problem is that housing has been turned from a durable good (like an automobile or a refrigerator) into a capital asset (like a stock or bond). So when housing prices go up, the people on the news say it's good for homeowners. However, it's only good for homeowners as a rise in stock-price is good for stockholders: the gain must be realized via an actual sale to someone who can afford this higher purchase price.
With stocks and bonds, it's easy-enough to say that there's always another investor, and if there isn't, then whoever died from lack of a share of stock? You might be totally unable to realize your financial gain, causing a stock-market bubble to pop and destroying your net worth, but only you, the asset holder, are taking any damage.
Ah, but housing is actually desired chiefly for its use-value, ie: to live in. So as the investment-ization of housing raises prices throughout whole markets at a time, it pushes out whole classes of people who just wanted somewhere to live, and increases the debt/mortgage burden for those who can still afford to buy.
So, to sum up this bit of the shpiel, a rise in housing prices only benefits society insomuch as it spurs the construction of new housing in useful locations by signaling through the market to real-estate developers to build more. When the housing supply is fixed, or growing far more slowly than the price of housing (as in places like San Francisco or Boston), a rise in housing prices is effectively just a zero-sum transfer of wealth from society in general to real-estate owners -- economic rent-extraction.
Contrast with automobiles, or refrigerators. We expect to buy them fresh and new, and watch them depreciate over time. It's entirely sensible to buy a used one, but we don't ever expect to buy a used car and sell it for more later. We do, however, expect these things to last a long time, whole decades.
It's easiest for current municipalities, in the thrall of property owners, to treat housing as a capital asset and use it to extract economic rent (income earned for ownership rather than production) from the rest of society. However, it's best for society if we manage to get housing treated as a durable good: worthy of our money, but ultimately something we produce rather than invest in.
We want housing to be like cars: expensive, but not so expensive that we feel a need to sell it off at a profit later and pervert both governments and markets to achieve that goal.
You're ignoring, or haven't seen, the real meaning of his words.
Indeed, $1 houses will probably always be undesirable and poorly constructed. But, that doesn't mean $1 million is a reasonable amount to spend on a house.
The real problem is that housing has been turned from a durable good (like an automobile or a refrigerator) into a capital asset (like a stock or bond). So when housing prices go up, the people on the news say it's good for homeowners. However, it's only good for homeowners as a rise in stock-price is good for stockholders: the gain must be realized via an actual sale to someone who can afford this higher purchase price.
With stocks and bonds, it's easy-enough to say that there's always another investor, and if there isn't, then whoever died from lack of a share of stock? You might be totally unable to realize your financial gain, causing a stock-market bubble to pop and destroying your net worth, but only you, the asset holder, are taking any damage.
Ah, but housing is actually desired chiefly for its use-value, ie: to live in. So as the investment-ization of housing raises prices throughout whole markets at a time, it pushes out whole classes of people who just wanted somewhere to live, and increases the debt/mortgage burden for those who can still afford to buy.
So, to sum up this bit of the shpiel, a rise in housing prices only benefits society insomuch as it spurs the construction of new housing in useful locations by signaling through the market to real-estate developers to build more. When the housing supply is fixed, or growing far more slowly than the price of housing (as in places like San Francisco or Boston), a rise in housing prices is effectively just a zero-sum transfer of wealth from society in general to real-estate owners -- economic rent-extraction.
Contrast with automobiles, or refrigerators. We expect to buy them fresh and new, and watch them depreciate over time. It's entirely sensible to buy a used one, but we don't ever expect to buy a used car and sell it for more later. We do, however, expect these things to last a long time, whole decades.
It's easiest for current municipalities, in the thrall of property owners, to treat housing as a capital asset and use it to extract economic rent (income earned for ownership rather than production) from the rest of society. However, it's best for society if we manage to get housing treated as a durable good: worthy of our money, but ultimately something we produce rather than invest in.
We want housing to be like cars: expensive, but not so expensive that we feel a need to sell it off at a profit later and pervert both governments and markets to achieve that goal.