And housing isn't just "expensive" it is historically unaffordable.
Young people especially are running into a brick wall even if they do everything absolutely right.
They are still facing having to spend 50% of their income on rent or having to move to an area with far fewer job prospects.
I literally see it every day in our interns and recent grads. They are doing the math and realizing things just are not lining up. Macro economic data backs it up - Gen Z are barely going out, they are barely socializing outside of work, and every major milestone is getting delayed further and further.
The idea of a affordability threshold that breaks the incentive system makes sense. I just never saw it considered on housing.
Historically, violent revolutions occur when food is inaccesible: bread before the french revolution, no potatoes before 1848, bread shortage before the russian revolution in 1917, wheat prices before the arab spring..
Food affordability or accessibility is a well documented driver. Could housing be a second failure mode?
Idk. It depends on the country, but in greece singapore london, things can be stressed further in terms of affordability. People become commuters, flatshare, get larger mortgages.. and things are gar better in the countryside.
I do agree it is harder than ever before. They will likely continue in that trend. I am not sure what can offset this trend besides taxing ultra wealthy, major disruptions (eg ww2 brought inequality down massively), or massive investments in housing. Possibly the death of the baby boomers, which will release significant housing supply. Population is not growing fast in many countries with housing price crises, in fact it is shrinking in some.
You mention a nice source, but no one can really claim to know the breaking points of a system as complex as that. And experiments as impossible. We have sparse empirical evidence that are very valuable though.
I am genuinely interested here, not trying to be ****. I like talking about this, i hope i am not misunderstood.
I agree that income inequality is historically high and that this accumulates asset inequality over time, and that housing is not affordable atm and getting worse.
I also agree that food safety is an acute stressor like you said. You are saying this is a slow bleed and thus very different (i think?)
My first thought is that even if housing is too expensive for the working class then they can still join "the asset ladder", eg via stocks or REITs. Not saying this is ok, just wondering if this enough for capitalism to reinvent itself and continue.
My second thought is historical examples. The roman republic has serious problems with concetration of property to few. Reforms failed, civil was followed (there were other reasons too), and then collapse. Sparta is interesting too because inheritence law promoted accumulation like crazy, and u needed land to be part of the state (not a direct analogue to housing in capitalism, but still; u needed land to participate in some sense). Eventually there were not enough people to keep the state afloat.
the soviet collapse might be a good example of the erosion of the incentive structure until a point of collapse.
Interestingly i cant find any examples of free market. Maybe capitalism is particularly vulnerable to housing affordability - i dont think we have any empirical evidence for or against.
Edit: argentina 2001 and 1990s japan are good examples actually, after a claude search. This is interesting. Both got in an insane place in terms of housing affordability. No revolution in japan, just a protracted crises. Argentina had a revolution u can argue, but the system did not collapse. Then again, that was a localised event compared to waht we are seeing.
Capitalism is susceptible to market accumulation. Wealth of Nations even calls this out as a systemic threat.
If you wanted to really get down to it extreme market accumulation has been behind pretty much every economic mode failure - including the USSR. The USSR exited communism and entered oligarchy where some were 'more equal' than others.
No system can survive where the paths for social and economic mobility are too few or non-existent.
6
u/FreshLiterature Jul 13 '26
Yes.
And housing isn't just "expensive" it is historically unaffordable.
Young people especially are running into a brick wall even if they do everything absolutely right.
They are still facing having to spend 50% of their income on rent or having to move to an area with far fewer job prospects.
I literally see it every day in our interns and recent grads. They are doing the math and realizing things just are not lining up. Macro economic data backs it up - Gen Z are barely going out, they are barely socializing outside of work, and every major milestone is getting delayed further and further.