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The Affordable Housing Scam
The Affordable Housing Scam
Dear Reader,
I love Hawaii.
It is one of the most beautiful places on earth.
But it is also ground zero for one of the biggest economic scams in America.
Politicians claim we need more taxes, bans, and rent controls to fix the housing crisis. It is a total lie.
When a developer builds a new luxury condo, rich people move in. They leave behind their old, slightly cheaper homes. Middle-class people move into those.
The housing crisis is manufactured. It is created by politicians who care more about zoning laws, impact fees, and historic preservation reviews
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The politicians in Hawaii love to talk about the "housing crisis." They wring their hands. They give speeches.
They pass new taxes, new bans, and new rent controls. They claim they are fighting for the little guy.
They are lying.
They don't want to solve the housing crisis. They created it. And a new report from the University of Hawaii just proved it.
The Filtering Effect
My rich dad taught me a very simple rule: supply and demand.
If you want things to be cheaper, you have to build more of them. It is not complicated. But politicians hate simple math.
The economists at the University of Hawaii studied a new condominium building next to the Ala Moana Center.
They tracked exactly what happened when people moved in.
It is called the "filtering effect."
When a family moves into a brand new, expensive condo, they leave behind their old house.
That old house is slightly cheaper. Another family moves into that one. They leave behind an even cheaper house.
It creates a chain reaction. One new luxury unit creates a cascade of vacancies all the way down the income ladder.
The study proved that the houses people left behind were substantially cheaper than the new units. They spanned diverse locations. They helped everyone.
A 2019 study by the Upjohn Institute found the exact same thing. New construction loosens the housing market in low- and middle-income areas.
A 2023 study from NYU proved it benefits renters by slowing down rent increases.
The math is undeniable. Building new homes makes all homes cheaper.
The Inclusionary Zoning Trap
But here is the kicker.
The Hawaii study found something else. They looked at the "income-restricted" units in the building.
The units the government forced the developer to build.
Those units led to fewer secondary vacancies. They actually slowed down the filtering effect.
The government's attempt to force "affordability" actually made the housing market tighter.
This is the great affordable housing scam. Politicians demand inclusionary zoning. They demand rent control. They demand massive impact fees.
They claim they are helping. But all they are doing is making it impossible for builders to build.
The Manufactured Crisis
Why are we still debating this?
Why are politicians still arguing about the definition of affordability instead of just letting people build?
Because the crisis gives them power.
If builders just built homes, the prices would come down. The market would clear. The problem would be solved.
But if the problem is solved, the politicians can't run on it. They can't raise taxes to fund new "housing initiatives."
They can't hand out favors to their connected friends.
The current legislative session in Hawaii is a perfect example. They killed dozens of good housing bills.
They are still fighting over the scraps. They are debating whether to repeal school impact fees.
They are arguing over accessory dwelling units on agricultural land. They are fighting over "shot clocks" for historic preservation reviews.
These are not real debates. They are stalling tactics.
The Real Estate Reality
If you want to build wealth in real estate, you have to understand the game.
The government is not your friend. They are the biggest obstacle to affordable housing in the country.
They use zoning laws and environmental reviews as weapons to restrict supply and drive up prices.
Enacting free-market reforms would result in more housing at all levels. It wouldn't cost a single dime of taxpayer money.
All it takes is the political courage to get the government out of the way.
But don't hold your breath. The politicians like the system exactly the way it is.
Your job is not to change the politicians. Your job is to understand the rules they write, and use them to build your own assets.
Stop waiting for the government to make housing affordable. Learn math. Understand the filtering effect. And start playing the game like the rich do.
Kiyosaki Uncensored
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