P
eter Thiel, co-founder of PayPal and early Facebook investor, is sounding the alarm on America's real estate crisis. In an interview with The Free Press, he drew parallels between the issue and the insights of 19th-century economist Henry George. According to Thiel, the core problem lies in the "extremely inelastic" nature of real estate, particularly in areas with strict zoning laws. As cities grow, housing prices skyrocket while salaries barely keep pace, resulting in a windfall for existing homeowners and landlords at the expense of young people and the lower middle class.

    Thiel warns that this phenomenon is not unique to the US, but rather a widespread issue affecting "Anglosphere countries" like Britain and Canada. The surge in US home prices has been staggering, with a 50% increase over the past five years. This has significant implications for prospective buyers and renters alike, contributing to the broader cost-of-living crisis facing many Americans.

    Thiel attributes this issue to supply and demand imbalances, where zoning laws restrict new housing development, driving up prices and fueling a wealth transfer from young people and the lower middle class to the upper middle class and landlords. He emphasizes that rent is a major cost item for lower-income households, making it difficult for them to afford basic necessities.