What i've lately dreamed about doing is a city-building Kickstarter. You take a piece of undeveloped land in Germany, buy it for cheap and then let people & companies pledge money to build housing at building cost with the requirement that it has to be used by the owner himself, until you get enough for a 500k-1M people city. I'd love to live in a city where every inhabitant is an owner, something drastically different than the rest of Germany.
It's just a dream with a lot of big holes, i'd love to hear how to make this viable.
Housing is nowhere near a free market. Public decisions control what can be built/rebuilt & where, essentially dictating "supply". It's also public infrastructure, services and wider economic policies that determine the value of that supply to consumers.
A quasi-laissez faire housing market can work. The US has many of them, in the geographically unrestricted cities like phoenix or.. lots of cities. The city/country builds roads. Land gets parceled into 1,000 - 5,000 sqm blocks and cheap houses are built on them, starting at $100k + taxes and land which are cheap relative to europe.
This can produce almost unlimited (given unlimited space) housing. Infrastructure is very basic: roads, sewage, etc. They usually don't have sidewalks, nevermind trams. They also produce low-density sprawl. As things get tighter, more and more burden is on cities to plan, provide infrastructure. Rights compete.
In theory, land efficiency and shorter transit distances should balance this out. In practice, land prices (enriched by infrastructure & proximity) generally outpace these efficiencies so house prices are higher anyway. Governments also limit supply in dense areas, because they can't keep up with the infrastructure requirements.
Truly revolutionary projects out of scope for private investors. First, horizons are too long. They can't wait 15 years for the value to emerge. Second, the governments' parts in the game (infrastructure & planning) is more important than private money's. Third, the money is too big, even for today's giant piles of cash. A small city (100k people) would cost 10bn to build, at least.
In that case, wouldn't the reasonable response to desire for higher density be, you know, demolishing single units to build high density housing?
Often, that isn't possible due to zoning in these 'unrestricted' cities. Zoning tends to be really restrictive, up to the point of placing tight limits on the density of dwellings.
Zoning or not, leveling housing to make room for high density is expensive, slow and difficulty-prone.
It's slow because you need to wait for many individuals in a market to act. They'll usually need to act in cooperation, piecing together smaller parcels. It's expensive because you are destroying housing to make housing.
Also, management of public infrastructure (even schools) is not flexible, adapting to local needs in realtime. A planner/zoner may look at an area, see that the infrastructure is insufficient and shut down population increases because they have no way to pay for more infrastructure.
You can just move to Oslo. Norway doesn't have a functioning rental market. It's because of big tax advantages for homeowners and social stigma for renters. The grass is always greener on the other side. I prefer German cities.
We have small projects, such as Collegium Academicum in Heidelberg. If you want to start one yourself, the Mietshäuser Syndikat will help you with organisation and financing.
It's just a dream with a lot of big holes, i'd love to hear how to make this viable.