The Housing Hunger Games - Tournament Economics

Homes are basically a tournament where the odds are ever not in your favor.  The American housing market is a lot like a tournament system, where homeowners win big, but young families are left struggling to compete, often at the expense of their long-term financial stability.

Welcome to the Thunderdome of Renting

You're in a massive arena. Some players are decked out in full armor (we call them "older homeowners"), while others are running around with plastic sporks (hello Gen Z!). The prize? A shot at not paying someone else's mortgage for the rest of your life. Cool cool cool. In a tournament system, the winners get all the goodies, while the losers are left with less and a smaller chance to win in the next round.

The rules are simple: win early, win big, or spend the rest of your life funding someone else's victory lap. It's like a game show where contestants have to climb a slippery wall, except the wall keeps getting taller, and someone's spraying it with extra-slick cooking oil while laughing maniacally.

The Players' Handbook (That Nobody Gave You)

The Winners' Circle

These lucky folks bought their homes when avocado toast wasn't being blamed for the housing crisis. They're sitting pretty, watching their property values rise faster than my blood pressure during house hunting. Their secret superpower? Being born earlier. That's it. That's the tweet. Buyers who get homes early in the game get a level up to rising property values, a steady flow of equity growth, and passive income from renters.

The Rental Rat Race

Meanwhile, the rest of us are stuck in the rent-paying hunger games, trying to save enough for a down payment while our rent keeps climbing faster than a caffeinated squirrel up a tree. It's like trying to fill a bucket with water while someone's drilling holes in the bottom. Renters play a different role in the system—they fund the wealth of the property-owning class by paying rent without building equity themselves. This locks renters into a perpetual state of trying to save enough to buy into the system while competing with other would-be buyers in a market of limited supply.

The Tournament Rules (Written in Invisible Ink)

1. The Scarcity Shuffle: Cities love playing this fun game called "let's make single-family homes the only legal option." It's like musical chairs, but instead of removing one chair each round, we're removing affordable housing options while the population doubles. Fun! Like a limited number of entries in a competition, the housing market is deliberately constrained. Single-family zoning laws and NIMBY (Not In My Backyard) opposition to new homes make sure demand outpaces supply, driving up prices.

2. The Property Value Power-Up: Remember when your Nintendo stock went up 1000%? Property values are like that, except instead of buying games, you're buying basic human shelter. No pressure! The “champions” of this system—those who own property—are rewarded by exponential property value appreciation, which often far outpaces wages and inflation.

3. The Renter's Paradox: You're paying enough in rent to afford a mortgage, but the bank says you can't afford a mortgage because you've been paying so much in rent. Make it make sense, I dare you. Renters provide the capital property owners need to reinvest and buy more homes, further concentrating wealth at the top of the housing hierarchy.

The Long Game (its Already Game Over)

As time goes on, this totally-not-rigged system creates a fantastic wealth gap about as bridgeable as the Grand Canyon with a pogo stick. Early winners keep winning, while the rest of us... well, we keep writing rent checks that can . The gap between homeowners and renters is getting bigger and bigger. Homeowners get to enjoy the benefits of their property’s value growing over time, and they also get tax breaks like mortgage interest deductions. But renters are struggling to keep up because their rent is going up, and they’re not able to save as much money. This has been happening for a long time, and it’s creating a huge wealth gap between the two groups.

As homeowners get richer, they often invest more money in buying more properties. This means that fewer and fewer people or companies own a larger share of the housing market. It’s like old winners are hogging all the best resources, making it really hard for new people to get a chance to compete.

If you’re a renter thinking about joining the tournament, you’ll find it a bit tougher. Home prices are sky-high, and mortgages are super strict. This competition among buyers drives up prices even more. It’s like a never-ending cycle: scarcity makes prices go up, prices make it harder for people to get a home, and that makes it even scarcer.

The Plot Twist Nobody Asked For

The really fun part? This whole system is starting to look about as stable as a Jenga tower in an earthquake. We've got:

1. Generational Divide: Homebuyers who bought decades ago often get a break, while younger generations struggle to get in.

2. Geographic Lock-In: Homeowners, who are seeing their property values go up, tend to be against zoning changes or new developments, which makes it harder to build more homes.

3. Economic Instability: A housing market based on guesswork instead of hard work can cause bubbles, like the one that popped in 2008.

4. Social Consequences: Wealthy communities become segregated, pushing lower-income renters out of desirable areas and making it harder for them to get good schools, jobs, and fun stuff.

• Winners: Early homebuyers, landlords, and big investors who buy lots of property. They get to sit back and watch their money grow while the government helps them out with tax breaks and low property taxes in some places.

• Losers: Renters and younger folks who are feeling the pinch of rising costs. They’re helping property owners out with rent, but they’re having a tough time saving for their own place.

The Million-Dollar Question(s)

Imagine a system that’s like a pyramid scheme, where the first few people get rich, and the rest have to pay more and more. Eventually, it becomes unsustainable because too many people can’t afford it. The economy suffers because housing costs take up a huge chunk of people’s income, leaving them with less money to spend on other things.

What if – and hear me out here – we tried something crazy like... making housing work for everyone? I know, I know, revolutionary concept. But imagine a world where property value increases were shared like that last pizza slice at a party (okay, bad example, that always ends in chaos).

Some Wild Ideas That Just Might Work

- Nationwide multi-family zoning (gasp! The horror!)

- Land value taxes (I can hear the NIMBYs screaming already)

The Bottom Line

Our housing market is essentially a giant game of Monopoly where half the players started two hours before everyone else. And sure, you could argue that's just how the cookie crumbles, but maybe – just maybe – we could try baking a different cookie?