One of many big lies that politicians tell is "we want more affordable housing". Nonsense. Whenever we get affordable housing, everybody panics. That's what 2008 was--a very brief spate of affordable housing, and as soon as we got it, almost everybody was in a tizzy.
Very few can buy a house for cash. Most of them are financed. By their very nature, such purchases are financially damaging to you unless the asset you finance goes up. The damage is usually bearable for smaller items such as a car, or appliances. It's too much to bear for a house, which became the overweight item in most middle-class investment portfolios.
So. We encouraged most of the country to have an investment strategy that could be summed up as "overweight leveraged real estate" and this is the natural result--everybody wants housing to keep going up in price.
Furthermore, governments rely on property tax revenue which is... proportional to assessed value. The government wants housing to go up too. Then the people that run the show have the gall to say, "we're going to create affordable housing". Nonsense.
What they call "affordable housing" usually requires you to be in some kind of welfare program to qualify. Being on welfare is, in some sense, actually a high price to pay for housing.
Another thing they called "affordable housing" was the shoddy loans that caused the 2008 crisis. Once again, that's not affordable housing. It's affordable *credit*, ie, cheap money, used to buy expensive housing.
REITs are one way for people to buy real estate without having an over-weight portfolio. They're still leveraged though, because it's too difficult to make money in this system without leverage. It's like an arms race. If we took the leverage out, it might be possible to run the system using non-leveraged REITs. You'd put a significant portion of your savings in a non-leveraged REIT. Instead of earning interest, you'd earn dividends. The possibility of the REIT going to zero wouldn't be there like it is with today's leveraged REITs. In other words, we could make housing something like a regulated utility.
Needless to say, this is a huge leap and I've been made fun of for suggesting it before. Debt finance is very, Very, VERY entrenched in this market. It'd be revolutionary to do it any other way.