Economists tend not to think about the negative externality of the power differential between renters, and landowners in this current economy and the economic warped gravity of landlords pulling the money out of renters through the broken housing sector.
It's much simpler than that.
The truth is investment banks, hedge funds, and asset management companies -- and their executives/board members -- fund major economics schools through donations, endowments, and grants. Hell, Ken Griffin paid $125 million to have the University of Chicago's economics school, AKA neoliberalism HQ, named after him. At the same time, those parties own and operate, or fund, the major economic think tanks. And corporate media, by the way.
No party involved is going to bite the hands that feed them by furthering anything other than neoliberal economic goals. That means universities are going to have selection bias towards neoliberal students and fund neoliberal research. Think tanks are going to push neoliberal policy positions, and media is going to exert editorial bias towards neoliberal narratives. That ownership and contribution returns on investment by manufacturing consent for neoliberal policy, under which investment banks, hedge funds, and asset management companies profit.
The last thing any of these parties will be inclined to do, is call out the economic, social, political, and frankly national security threat posed by investment banks, hedge funds, and asset managers monopolizing the residential property and development markets as we've seen post-2008, but especially post-Covid. As Upton Sinclair put it, "it is difficult to get a man to understand something, when his salary depends on his not understanding it." Except in this case those involved are damned well aware of the scenario before them, they either agree with it and are paid to propagandize it, or they disagree with it and are paid to say nothing about it.
Given that most homeowners would rather burn the country down than increase the number of houses being built due to housing as an investment, and are more likely to be voters, this policy may start to make more sense than it seems.
Most actual homeowners aren't private citizens, they're institutions. Only one out of three "homeowners" in the US have 100% equity in their homes. I put "homeowner" in quotation marks, because those with mortgages and loans (i.e. financial institutions are lienholders) are still categorized as such -- and that's approximately 66% of the US population. So, only about 22% of US households are actually owned in any substantive legal sense by their occupants.
The problem is votes don't matter, money does by way of campaign expenditure and lobbying. That favors the institutions which legally own 78% of US households. The approximately 26% of the US population who are obnoxious, slack-jawed, morons gleefully voting against their economic and social interest, and the approximately 27% who are obnoxious, arrogant, morons gleefully voting against their economic and social interest? They're just the excuse for the policies bought and paid for by oligarchs.
It bears reminding to everyone in the thread, the "housing shortage" is fake. Those investment banks, hedge funds, and asset managers are a
de facto cartel, limiting the number of units on the market at any time to generate false scarcity. Even in the less-than-a-handful of urban areas in which the shortage
appears genuine, it's still fake and driven entirely by corporate RTO policies
in which those same companies have interest.
Only in America do we think this problem may be solved either down the line, through some miracle like how World War II and FDR's Keynesian policy helped end the great depression for the US, or some combination of the above.
Ironically, the problem's root cause is the worst-of-all-worlds chimeric monstrosity that is the US's implementation of Hayekian policy during boom cycles, and Keynesian policy during bust cycles. That never actually gives either the state or private markets genuine recovery time, and just accelerates and aggravates boom-bust cycles. But, it does greatly benefit oligarchs who are positioned to profit on upward
and downward market trends and thereby have a vested interest in maximum market volatility at all times.
Either-or would be preferable to what we do now, though Keynesianism has the far better track record for moderating the length and severity of the cycle for stronger, more consistent, and sustainable economies.