> You're "Costs" seem to be assuming that physics and zoning laws don't exist. Some REIT who owns a few dozen properties isn't going to be able to merge those into one mega-rental priced 36x higher.

I am not sure what you are referring to. I wasn't thinking about zoning at all. Don't really care as it doesn't matter.

> Either the rental units will still exist or their price will drop enough that it becomes feasible to buy one almost as easily as you would have rented it otherwise.

Ahh. You thought when I said "mansion", that it must involve some modification in place?

No, housing is a market, it makes no sense to talk about specific units like this. Say you had a 10 unit apartment building that is impossible to own, so it's sold for condos, and then home buyers sell their old home and move in and buy those condos, leaving their old homes, that someone else buys, leaving other homes, that someone else buys, and eventually you get a smattering of 10 homes in random parts of the country that get turned into rental stock. Or maybe some of them are combined into a hotel. Or turned into a corner store. You see, the zoning law that applies to the 10 unit building is not the issue, because as these are shuffled around, the changes will happen where the zoning is flexible, and that will soak up excess demands where zoning is not flexible. This piece of magic is what allows Palo Alto to have strict zoning but people don't need to wander the streets as homeless because zoning flexibility in other markets absorbs increases in demand. Which is not to say that zoning doesn't mess with prices -- it does. But everything is substitutable for a place with different zoning.

Point being, think of what happens to the entire market, not one specific home.

So what will happen to the market?

Well, let's say that there is a demand for 30 million rental units and 80 million owner units. That's the natural state of affairs.

And let's say there are 100 million households, of which 30 million are renters and 70 million are owners, and the 70 million owners collectively own 80 million owner units (some have multiple homes) and 30 million renter units (for the renters). The renters own nothing.

Obviously that's not distributed uniformly. Some owners own only 1 house, some own 2, etc. But things will spread around in this group, it doesn't matter.

So now this law is passed and we have the great shuffle, where households shift their mix of housing and bonds so that instead of one household owning 2 houses and 1 rental unit, and another household owning just one house, now one of these will be sold off so that both own 1 house and 1 rental unit.

Now in the course of this big shuffle, households will adjust their bond/house mix so that some houses end up with more bonds when they sell their house, and others will end with fewer bonds as they buy an extra house. The number of bonds that go long is equal to the ones that go short. There are nt more or less bonds in aggregate, just as there are not more or less houses. And because people can borrow to buy a house, you can go short without having the bond.

The 30 million renter homes will be spread out to some of the 70 million owners who decide to lever up or reduce their bond holdings and increase their property holdings, and there will be 10 million extra homes left that the homeowners can't own.

What to do with these homes? They will be turned into hotels, tesla charging stations, or just take the place of new homes not built. And if zoning laws don't matter, because somewhere in the country those laws are flexible and thats where the tesla charging stations will be built (in Texas).

After the big shuffle ends, you still have an aggregate of 30 million renter units, and 70 million owner units, but alas no vacation homes (it's OK, enough were converted into hotels so people still take vacations. But in Texas.)

The process of arriving at that equilibrium is not worth worrying about, you care about the resulting equilibrium.

But what do we know about this new equilibrium? Well, it will create some discomfort, as home owners would rather have some vacation homes not in Texas. Renters would rather live in apartment buildings, but these were converted into condos. So what you've done is created some mismatches between what people want, and what they can get. This hurts welfare a bit and is usally what happens when people put on the central planning hat and try to remake society by overriding people's choices.

> They would be subject to the same rules and it's not in any way "illegal to be a landlord in your own nation"

Oh, you are introducing restrictions on capital inflows into the mix. That is really cool -- I favor draconian restrictions on capital inflows, because that's basically tariffs. OK, with enough restrictions, then sure, you can enforce compliance.

> Judge-Dredd style mega cities

I don't know judge dredd, but am not saying anything about mega-cities. I'm saying that you have this geographic mismatch, because renters, seeing as how they are more temporary occupants, have a certain need to be in some places, like near schools. Whereas owners have other preferences. And now you've converted the apartments near universities into condos, and the places farther out in the boondocks into the rental stock where the students will live and need to commute a long distance into the school. So this is not a mega city, even though it has worse traffic. But it is the result of some utopian central planner making bad decisions that aren't suitable for a lot of people.

> I really don't understand how you could possibly see this as "symbolic"

It is symbolic because all you've accomplished is to destroy some welfare, but whatever housing equalization you were trying to do has not been accomplished. So in this way it's like the plastic straw ban. OK, people in some blue cities are using soggy paper straws now, but the goal, which is to help the turtles with the straws in their noses, remains unmet, as the plastic gets dumped into the ocean by countries in Africa and India that directly dump their trash into the ocean, and not by developed countries who bury their trash, and keep it out of the ocean. So while there is harm in terms of annoying people, the stated goal of getting straws out of turtle noses remains unmet. In this way, it's symbolic.