Daniel sent us this one, and it's a big one. He lives in Jerusalem — across from one of these luxury towers, actually — and he's watching cranes build apartments nobody seems to live in while he and his wife can't find a decent rental. The dollar just hit two point nine shekels, a twenty-five-year low, and the municipality is admitting demand for these towers isn't what they expected. His question underneath all of this: have any countries seriously considered that property should not be a speculative asset at all?
This is one of those questions where the personal and the structural collide. You're looking out your window at a forty-story tower with maybe twelve lit windows at night, trying to figure out how a city with a housing crisis approved this. The answer is uncomfortable.
The dark windows are the thing, aren't they. You can't unsee them once you start counting.
People do count. Nighttime light analysis estimates occupancy at thirty to forty percent. Realtors have been saying this quietly for a couple years, but the municipality's recent admission makes it official. The foreign buyers they were counting on aren't showing up.
They're going to try harder to sell to affluent overseas buyers and investment vehicles. Which is remarkable phrasing. The solution to "nobody wants these" is apparently "find richer nobodies.
That's the core of it. The listener frames this as the municipality not just observing a bubble but engineering one. That's a strong claim, but the data supports something close to it. Jerusalem has been approving luxury high-rises at a pace that makes no sense relative to local incomes — which trend fifty to sixty percent below Tel Aviv. The median Jerusalem household cannot afford these units. They were never meant to.
Walk me through the mechanism. Why does a municipality approve housing its own residents can't buy?
Several incentives align in a way that's almost elegant if it weren't destructive. First, municipalities collect betterment taxes and development fees on new construction. A luxury tower generates more revenue per unit than affordable housing. Second, these projects create construction jobs and the appearance of economic activity. Third — and this is the part people miss — approving a tower for overseas buyers doesn't create immediate political costs with local voters the way approving a landfill does. The buyers aren't constituents.
The developers are rational actors in a distorted market. They're not building for the local rental market. They're building what the listener called "stores of value" — safe assets for global capital. The dollar at two point nine shekels means a million-dollar apartment costs two point nine million shekels to an American buyer. That same apartment might have cost four million shekels a few years ago. The currency arbitrage makes Jerusalem luxury real estate cheaper for overseas buyers even as local prices rise.
The exchange rate that just hit a twenty-five-year low is actually making these apartments more attractive to foreign buyers, not less?
It cuts both ways. A weaker shekel makes the purchase cheaper upfront, but it also signals economic instability that might make investors hesitate. The municipality's admission suggests the hesitation is winning. But the broader point stands: these towers were priced in dollars from day one. They exist in a parallel economy that has almost nothing to do with the Jerusalem rental market.
Which is why the listener can be standing in an apartment with a leak the landlord won't fix while a crane across the street builds housing that will sit empty. It's not a contradiction from the developer's perspective. It's two completely different products.
One is housing. The other is a financial instrument that happens to be shaped like housing. And this distinction — between housing as shelter and housing as an asset class — is the central tension in property markets worldwide. Jerusalem is just a particularly vivid case study.
Let's broaden out. The listener asked whether any countries have looked at this and said, essentially, property speculation is a net drain and we should curtail it. What's the global picture?
It's actually a rich landscape of policy experiments, and some of them are surprisingly aggressive. Let's start with Vancouver, because it's probably the closest parallel to what Jerusalem is experiencing. By twenty sixteen, Vancouver had become the poster child for the "ghost tower" phenomenon — luxury condos bought by overseas investors, mostly from mainland China, sitting empty while locals faced one of the most unaffordable housing markets in North America.
The city of glass with nobody home.
That was literally the nickname. A twenty sixteen study found that in some Vancouver neighborhoods, non-resident owners accounted for nearly twenty percent of condos. Even higher in brand-new towers. So the city introduced an empty homes tax in twenty seventeen — one percent of assessed value on properties vacant more than six months a year. Then the province layered on a speculation and vacancy tax in twenty eighteen, targeting foreign owners and domestic speculators who didn't pay income tax in British Columbia.
Did it work?
Vacant units dropped about twenty-five percent in the first two years. Foreign buying fell sharply. But — and this is crucial — prices didn't crash. The market cooled, but it didn't collapse. Which is actually the ideal outcome. You want to redirect housing toward occupancy without triggering a financial crisis.
Because the counterargument is always "if you tax speculators, the whole market tanks and regular homeowners lose their equity.
That's the political trap. Homeowners are voters. If your policy threatens their paper wealth, you lose. Vancouver managed to thread the needle — vacancy rates dropped, some units returned to the rental market, but the broader market didn't implode. It demonstrated that targeted taxes on empty homes can shift behavior without destroying value.
What about London? I remember reading about "buy-to-leave" — investors parking money in luxury flats and never setting foot in them.
London is arguably the global capital of this phenomenon. Estimates suggest there are more than twenty thousand luxury flats in central London owned through offshore shell companies, many sitting empty. Entire developments marketed almost exclusively overseas — in Singapore, Hong Kong, Dubai — before a single unit was offered locally. The phrase "safe deposit box in the sky" became common.
Which is a devastating phrase, really. It tells you everything.
London's response has been mixed. They introduced an annual tax on enveloped dwellings — properties held through corporate structures — and increased stamp duty on second homes and foreign buyers. But enforcement is patchy, and the City of London has a deep institutional resistance to anything that might dent its status as a global capital repository. The tension between London as a financial center and London as a place where people live is unresolved.
Vancouver taxed empty homes, London sort of half-heartedly taxed corporate ownership structures. Neither actually banned the underlying activity. The listener's question is more radical — has anyone considered just saying no, property is not a speculative asset, full stop?
Nobody has done that outright, but Singapore has come closer than anyone. Eighty percent of Singaporean households live in HDB flats — Housing and Development Board public housing. These are purchased on ninety-nine-year leases with strict eligibility criteria: citizens only, income caps, family nucleus requirements. The resale market has restrictions designed to prevent speculation — minimum occupation periods, ethnic integration policies to prevent enclaves, and subsidies that are clawed back if you flip the property too quickly.
The government is essentially the developer, the landlord, and the regulator all at once.
Singapore has one of the highest home ownership rates in the world — nearly ninety percent — in one of the densest, most land-constrained cities on earth. The key insight is that they separated the housing market from the investment market. HDB flats are for living in. If you want to speculate, you can buy private property, but the government has tools there too. The Additional Buyer's Stamp Duty for foreign buyers is thirty-five percent. For entities — companies or trusts — it's thirty-five percent. These are not subtle deterrents.
Thirty-five percent is a wall. That's not a tax, that's a statement.
It says: if you want to park capital here, fine, but you're going to pay a premium that funds public goods. Singapore also has seller's stamp duty if you sell within three years, and total debt servicing ratio frameworks that limit how much people can borrow. The cumulative effect is a housing market where price appreciation is moderate and tied to actual economic growth rather than speculative inflows.
Because the standard objection to public housing is that it's grim Soviet blocks with leaky pipes.
That's one of the misconceptions worth busting. Singapore's HDB flats are generally well-maintained, regularly upgraded through government programs, and integrated with public transit, schools, and green space. They're not luxury, but they're not grim. Visit a typical HDB estate and you'll see something closer to middle-class European social housing than to the American public housing stereotype. The government has a political incentive to maintain them because eighty percent of voters live in them.
That's the alignment of incentives the listener was talking about. When the people making decisions live in the same housing stock as everyone else, the decisions change.
That brings us to Vienna, the other model that comes up constantly. Sixty percent of Viennese residents live in social or subsidized housing. The city itself owns two hundred twenty thousand units directly. Rent controls are tied to inflation. And the mechanism for developing new housing is something called the Bauträgerwettbewerb — a developer competition where the city awards land not to the highest bidder, but to the developer who proposes the best combination of affordability, architectural quality, and sustainability.
Wait, they judge developers on quality and affordability rather than who pays the most for the land?
It inverts the entire logic of property development. The land is publicly owned, so the city doesn't need to maximize sale price. Instead, it maximizes social value. Developers compete on who can deliver the best housing at the lowest cost. Vienna consistently ranks as one of the world's most livable cities, and housing costs are a fraction of what they are in comparable European capitals. A typical Viennese household spends about twenty to twenty-five percent of income on housing, versus forty to fifty percent in London or Paris.
That's the policy equivalent of "build me a chair nobody notices they're sitting in." The housing just works, so people can get on with their lives.
The political culture around housing is completely different. In Vienna, housing is treated as infrastructure — like water or electricity. You don't speculate in water. The idea that shelter should be a financial asset is culturally foreign in a way that's hard to overstate.
Let's talk about New Zealand, because they tried something more direct — an outright ban.
In twenty eighteen, New Zealand banned most foreign buyers from purchasing existing homes. There were exceptions for Australians and Singaporeans due to trade agreements, and foreigners could still buy new builds in some cases, but the core policy was simple: if you're not a resident, you can't buy an existing house.
Foreign purchases dropped about ninety percent. That part worked exactly as designed. But prices kept rising anyway. Because foreign buyers were only one factor. Low interest rates, constrained supply, domestic investor activity, and tax policies that favored property investment all continued to push prices up. The ban was necessary but not sufficient.
Which is the lesson that keeps coming up. No single policy tool is a silver bullet.
The foreign buyer ban was politically popular and it did eliminate one source of speculative demand. But if you don't also address zoning, domestic speculation, tax incentives, and supply constraints, you're plugging one hole in a sieve. New Zealand has since added other measures — they extended the bright-line test for capital gains tax on investment properties, they removed interest deductibility for landlords — but the housing crisis persists.
What about China? They've got their own set of tools for cooling speculation.
China is fascinating because it's an authoritarian approach to a problem that market democracies struggle with. Multiple cities have purchase limits — one home per family. Some require five-year holding periods before you can resell. There are price caps on new developments. And the government has the ability to cut off credit to developers who get too aggressive, which they've done extensively in the last few years with the Evergrande and Country Garden crises.
The downside being that when the government decides to pop the bubble, it pops.
It pops hard. China's property sector accounts for something like a quarter of GDP when you include related industries. The current downturn has wiped out trillions in household wealth, because for Chinese families, property is the primary store of savings. There's an irony here: China's property market became so speculative precisely because there were so few other places to put money. No robust stock market, capital controls preventing overseas investment, negative real interest rates on bank deposits. Housing became the only game in town.
The system created the speculation and then had to use heavy-handed tools to control it.
Which is a cautionary tale about what happens when you treat property as the default asset class for an entire society. You get bubbles, you get ghost cities — China has entire districts built for populations that never arrived — and you get a political imperative to keep prices rising because so much household wealth is tied up in them. It's a trap.
Let's talk about Germany, because I know they approach this differently.
Germany is almost the anti-China in this respect. Only about fifty percent of Germans own their homes — one of the lowest rates in the developed world. Renting is not stigmatized. Tenant protections are among the strongest anywhere: open-ended leases, strict limits on rent increases — the Mietpreisbremse caps rent at ten percent above the local comparable average for new leases — and eviction protections that make it genuinely hard to remove a tenant who's paying rent.
This is culturally embedded, not just legal.
The German word for debt — Schuld — is the same word as guilt. There's a cultural aversion to leverage that runs through the financial system. Mortgage lending is conservative. Down payments are high. And the rental market is regulated in a way that makes renting a viable long-term option rather than a precarious temporary state. You can raise a family in a rental in Berlin or Munich and it's considered perfectly normal.
Is that exportable? Or does it require a century of cultural conditioning?
Some of it is path-dependent, absolutely. But the legal framework is exportable. Strong tenant protections don't require a particular national character. Rent control tied to objective benchmarks doesn't require Germans. What's harder to export is the cultural norm that renting is fine and home ownership isn't the measure of adulthood.
The listener's question goes further than any of these, though. He's asking whether property speculation itself — buying and selling homes primarily for profit rather than use — should be treated as inherently corrosive. Not just regulated, but fundamentally disallowed.
That's where we get into theoretical territory. The closest thing to a framework for this is Henry George's land value tax, which has been kicking around since the late nineteenth century and still has a devoted following among economists. The idea is that land values are created by the community — by public investment in infrastructure, by economic activity, by population growth — not by the landowner. So taxing land value heavily, while reducing or eliminating taxes on buildings and improvements, captures that community-created value and returns it to the public.
It punishes speculation because holding empty land becomes expensive.
If you're taxed on the value of the land regardless of what you do with it, you have an incentive to put it to productive use. A vacant lot in a desirable area becomes a liability rather than an appreciating asset. A luxury tower sitting empty gets taxed on the land value, which makes the "store of value" strategy less attractive. It's a tax that aligns private incentives with public good in a way that income taxes and sales taxes don't.
Has anyone actually implemented this?
Parts of it. Singapore's property tax system has land value tax elements. Taiwan's land value increment tax captures increases in land value at the point of sale. Several Australian states have experimented with land taxes. Pennsylvania has a split-rate property tax in some municipalities that taxes land at a higher rate than buildings. But no major jurisdiction has gone full Georgist. The political obstacles are enormous, because landowners are a powerful constituency.
The transition problem — if you've already bought a house and the tax regime changes, you're suddenly facing costs you didn't plan for.
That's the implementation challenge. Any serious proposal has to grandfather existing owners or phase in gradually. But the theoretical case is strong enough that economists across the political spectrum — from Milton Friedman to Joseph Stiglitz — have endorsed some version of it. Friedman called it the "least bad tax.
We've got a spectrum. On one end, Singapore and Vienna treat housing as social infrastructure first and a market second. In the middle, Vancouver and New Zealand use targeted taxes and bans to curb the worst excesses of speculation. On the other end, London and Dubai essentially embrace the "safe deposit box" model and accept the social costs. Has anyone actually tried to ban property speculation outright?
Even China, for all its purchase restrictions, doesn't ban speculation — it just limits how much any individual can do. The closest might be some "use it or lose it" proposals floated in various places. The idea is that if a property sits vacant for more than a certain period — say, one year — the owner loses certain rights or faces escalating penalties that eventually force a sale. There are versions of this in some European countries' squatting laws, where long-term vacant properties can be subject to adverse possession claims, but those are edge cases.
The listener's question — has anyone seriously considered banning property as a speculative asset — the honest answer is: not really. What we have instead is a range of interventions that treat speculation as a problem to be managed rather than an activity to be eliminated.
I think there's a reason for that. Outright bans create black markets. They freeze legitimate transactions. They create enforcement nightmares — how do you prove intent? Is someone buying a second home for their retirement speculation or prudent planning? The line between investment and speculation is blurry. What Singapore and Vienna show is that you don't need to ban speculation outright if you create a parallel system where speculation is irrelevant to most people's housing.
That's the key insight. The question isn't "should we ban speculation" but "should housing for ordinary people be exposed to speculative markets at all." And the answer from the successful models is no. You wall off a substantial portion of the housing stock — eighty percent in Singapore, sixty percent in Vienna — and say: this is for living in. Whatever happens in the private luxury market is a sideshow.
That's exactly what Jerusalem isn't doing. There's no walled-off social housing sector of meaningful scale. The luxury towers aren't a sideshow — they're the main event, because they're what gets permitted and financed. The listener's observation that the municipality is "engineering" this outcome is harsh but not inaccurate. When you approve luxury high-rises and don't approve affordable housing, you're making a choice.
Let's talk about the misconception that luxury towers are always a sign of a healthy economy. That's the assumption that lets municipalities point at cranes and say "look, we're growing.
It's one of the most persistent myths in urban economics. Cranes can mean productive investment, or they can mean capital flight looking for a safe harbor. In Jerusalem's case, the evidence points toward the latter. These towers aren't filling up with families. They're filling up — if at all — with investment portfolios. The economic activity they generate is construction jobs, which are temporary, and municipal fees, which are one-time. They don't create the ongoing economic vitality that comes from actual residents who shop at local stores, send kids to local schools, and pay local taxes year after year.
The ghost tower as economic drain, not economic engine.
There's a knock-on effect that's even more insidious. When luxury towers become the dominant form of new construction, they pull construction resources — labor, materials, crane time — away from other types of building. They bid up land prices in surrounding areas because developers anticipate luxury returns. They change the baseline assumption about what new housing costs to build. All of this makes affordable housing harder to develop, not easier.
Even if the luxury towers themselves were fully occupied, they'd still be distorting the broader market.
Yes, though occupancy would at least add residents to the tax base and customer base. The vacant tower is the worst of both worlds — it distorts the market during construction and then contributes nothing afterward.
Let's return to the listener's personal situation, because it anchors the policy discussion in a way that's useful. He and his wife are looking for a rental in Jerusalem. Prices are up, quality is down. Their previous tenancy ended because they asked when a leak would be fixed. That's a tenancy-at-will system where asking for basic maintenance is grounds for eviction.
This is the part that doesn't show up in the luxury tower brochures. Jerusalem's rental market operates on what's essentially a feudal model — short-term leases, minimal tenant protections, security deposits held hostage, and the constant threat of non-renewal if you make any demands. The listener mentioned families trudging between rentals, and that's exactly the right image. It's a forced march.
Compare that to Germany, where you can raise a family in a rental and never worry about arbitrary eviction. Or Vienna, where the city is your landlord and the rent is tied to inflation. The psychological difference is enormous. When housing is precarious, everything else in life becomes precarious.
There's research on this. Housing instability is correlated with worse health outcomes, worse educational outcomes for children, higher stress, lower productivity. It's not just an economic problem — it's a public health problem. When a city treats housing as a speculative asset, it's externalizing enormous costs onto its residents.
Let's get practical. What can someone do if they're in a city like Jerusalem, watching this happen?
The policy tools exist. Vacancy taxes — if your city has empty luxury units, advocate for a Vancouver-style empty homes tax. Inclusionary zoning — require developers to include affordable units in new construction or pay into an affordable housing fund. Land value taxes — shift the property tax burden from buildings to land, which penalizes holding vacant lots and underused properties. Tenant protections — basic things like just-cause eviction requirements, longer minimum lease terms, rent increase caps tied to objective measures.
At the ballot box?
Vote for candidates who talk about housing as infrastructure, not as an investment vehicle. That's a simple heuristic that cuts through a lot of noise. If a politician's housing plan is "make it easier for developers to build luxury condos and hope it trickles down," that's a signal. If they're talking about public housing, tenant protections, land value taxation, or vacancy taxes, that's a different signal entirely.
The trickle-down theory of housing has been tested extensively, and the results are not ambiguous. Filtering — the idea that new luxury units eventually become affordable as they age — takes decades at best, and in high-demand cities it often doesn't happen at all because the units get renovated and stay at the high end of the market.
The data on filtering is mixed, but the optimistic estimates suggest it takes twenty to thirty years for luxury units to become affordable to median-income households. That's a generation. In the meantime, the people who need housing now are priced out. Filtering is a theory that works beautifully in economics textbooks and fails regularly in actual cities with growing populations and constrained land.
The listener's intuition is correct. Treating property as a speculative asset creates perverse incentives. The evidence from Vancouver, London, Singapore, and Vienna all points in the same direction — when housing is financialized, it stops serving its primary function.
The counterpoint is worth acknowledging. Property speculation isn't uniquely evil — it's a symptom of a broader problem, which is that in many economies, housing is one of the only reliable stores of value available to ordinary people. If you want people to stop treating housing as an investment, you need to give them somewhere else to put their savings that offers comparable security and returns. That's a much harder problem than passing a vacancy tax.
Which is why Singapore's model is so instructive. The government didn't just ban speculation — it created an alternative system that made speculation unnecessary for most citizens. Your HDB flat appreciates modestly, your CPF savings account earns reasonable returns, and your healthcare and retirement are covered. The housing market doesn't have to carry the entire weight of household wealth accumulation.
That's the broader lesson. Housing speculation is a symptom of a society that has financialized shelter because it has financialized everything else. The fix isn't just policy tweaks to the property market — it's a broader social contract that provides security through means other than property appreciation.
Let's talk about the open questions the listener's situation raises. What happens to Jerusalem's ghost towers if the foreign buyers don't come back?
There are a few scenarios. The optimistic one is that developers, facing weak demand, drop prices to levels that local buyers can afford. The towers fill up, the lights come on, and the crisis resolves through market adjustment. The pessimistic one is that the towers sit half-empty for years, the developers go under or get bought out by vulture funds, and the units eventually get sold at distressed prices — which could mean bargains for locals, but only after a lot of economic pain.
The realistic one?
Probably something in between, with a twist. Some towers will convert to rental — not affordable rental, but luxury rental aimed at expats and diplomats. Some will get bought by institutional investors who hold them as long-term assets, accepting low occupancy in exchange for capital preservation. And some will simply sit, dark windows and all, as monuments to a strategy that didn't work.
Could they be converted to affordable housing?
Technically yes, practically difficult. Luxury towers are designed with floor plans, finishes, and amenities that make per-unit costs high. Converting them to affordable housing usually requires subsidies to bridge the gap between what the units cost to operate and what affordable rents can cover. Some cities have done this — New York has inclusionary housing programs that put affordable units in luxury buildings — but it requires political will and public money.
The broader question: what happens when global interest rates shift and the luxury real estate bubble deflates across multiple cities simultaneously?
That's the scenario that keeps urban planners up at night. If the "safe asset" thesis breaks down — if global capital decides luxury real estate isn't a good store of value anymore — cities that bet heavily on this model are going to face a reckoning. Empty towers become distressed assets. Municipal revenues from development fees dry up. Construction employment collapses. And the housing that was supposed to be an economic engine becomes a liability.
Which is why the listener's framing — that this is a net drain on society — has force beyond the moral argument. It's an economic argument too. Speculative property investment concentrates risk, externalizes costs, and produces buildings that don't contribute to the local economy. It's not just unfair. It's inefficient.
That's the point that doesn't get made enough. The case against property speculation isn't just about fairness — it's about economic productivity. Capital that goes into empty luxury towers is capital that isn't going into productive businesses, infrastructure, education, or any of the things that actually grow an economy. It's dead money in the most literal sense.
To answer the listener's question directly: yes, multiple countries have considered that property speculation is harmful and have taken steps to curtail it. None have banned it outright, but Singapore and Vienna have effectively neutralized it for most of their populations by creating non-speculative housing sectors. Vancouver and New Zealand have used targeted taxes and bans to reduce the most visible harms. And the theoretical framework exists — land value taxation, use-it-or-lose-it policies — for going further.
The harder question is whether any of this is politically achievable in a place like Jerusalem, where the municipality's incentives are aligned with developers and overseas buyers rather than local renters. The listener's description of the situation as "engineered" suggests a level of institutional capture that won't be fixed by pointing to Vienna and saying "do that.
Institutional capture is the polite term for it. The impolite term is that the people making decisions don't rent.
That's the structural problem. In most cities, homeowners are the dominant political constituency. Renters vote at lower rates, move more frequently, and have less concentrated political power. Policies that benefit renters at the expense of property values are politically radioactive. The miracle of Singapore and Vienna isn't just the policy design — it's that those policies survived decades of political pressure.
What's the listener supposed to do tomorrow?
Tomorrow, not much. These are structural problems with structural solutions that take years or decades. But the awareness piece matters. The listener looking out his window at a dark tower and connecting it to his own housing precarity — that's the beginning of political consciousness around this issue. Multiply that by a few hundred thousand renters having the same experience, and you have the raw material for political change.
The dark windows as organizing principle.
Sometimes the most powerful political argument is just pointing at something and saying "that doesn't make sense." A forty-story tower with twelve lit windows in a city with a housing crisis doesn't make sense. You don't need an economics degree to see the contradiction.
Now: Hilbert's daily fun fact.
Hilbert: In the eighteen-tens, naturalists exploring Lake Baikal discovered the world's only freshwater seal, the nerpa, which has an unusually high concentration of melanin in its fur — giving it a near-black coloration unlike any other seal species — an adaptation scientists still don't fully understand, since the dark pigment offers no obvious advantage in the lake's deep, lightless waters.
The seal evolved dark fur for a lake where nobody can see it.
Fashion choices are personal, Herman.
I suppose they are.
Here's where we land. The question the listener asked — should property be a speculative asset — is one that cities around the world are answering in different ways, and the evidence suggests that the most livable, stable housing markets are the ones that have answered "not for most people, no." The ghost towers of Jerusalem are a case study in what happens when a city answers "yes." The listener is right to be angry. The question is whether that anger finds political expression.
The open question we'll leave you with: if the foreign buyers don't come back, if the dollar stays weak, if the municipality's gamble fails — what does Jerusalem do with forty stories of empty apartments? Do they sit as monuments to a failed strategy, or does the city find a way to turn them into actual homes?
This has been My Weird Prompts. Thanks to our producer Hilbert Flumingtop. If you have a weird prompt of your own, send it to prompts at myweirdprompts dot com. We're on Spotify, Telegram, and at myweirdprompts dot com.
Until next time.
