IS REAL ESTATE A SCAM?
written in the voice of Eric Kim
Real estate? SCAM. Not because it doesn’t make money—but because it chains you. Mentally. Physically. Spiritually. You think you’re buying freedom, a place to call your own, a foundation for your legacy… but you’re buying into someone else’s game, someone else’s cage.
Let’s zoom out:
You grind 30 years of your life, lock yourself into a mortgage, beg the bank to own a box in a place that’s been zoned, taxed, and politically fenced in by people who don’t want you there. LA? New York? San Francisco? They don’t want newcomers. They want preservation of status. They want to make sure their land—their dirt—goes up in value while you stay locked out.
1.
Zoning is Class Warfare
Single-family zoning is modern-day aristocracy. You can’t build duplexes, triplexes, or any dense housing because NIMBYs want their street to stay “quiet.” Translation? They want their land value to inflate. Artificial scarcity = rising price. It’s not about supply and demand. It’s about control and exclusion.
And when land becomes scarce—not by nature, but by law—who benefits? The ones who bought in 1972 and pay $300 a year in taxes. You, the new guy? You’re paying $23,000 annually for the privilege of being late.
2.
Permits are Legalized Extortion
You want to build? Good luck. CEQA. Entitlements. Environmental reviews. Permit delays. You think you’re an entrepreneur, a builder, a doer? Nope. You’re a petitioning peasant waiting for the sovereign’s stamp of approval. Every month of delay burns capital, hemorrhages optionality, and erodes the upside.
And the rich? They know this. That’s why they don’t flip houses—they buy land and wait. Patience becomes power. Because in America, the less you build, the richer you get. Owning land in a supply-constrained city is like owning Bitcoin with a 21-million cap—except with tax write-offs and cash flow.
3.
Prop 13 Is a Golden Handcuff
You think Prop 13 protects grandma? No. It protects the landed elite. It’s a mental and fiscal lock—rewarding you for not moving, not selling, not evolving. It incentivizes stagnation. You sit on land, don’t improve it, don’t densify it, don’t innovate on it—and the system calls that “stability.”
But look deeper: Prop 13 isn’t about homes. It’s about turning land into a bond. A tax-frozen yield-generating asset. The new American dream isn’t a house. It’s rental income with a 2% tax increase cap.
4.
ULA, Insurance, and the Death Spiral of LA
Now we’ve got the “mansion tax” (ULA), rising wildfire risk, disappearing insurance coverage… and yet land prices in LA are still rising? That tells you everything: land is a cult asset. It has become an inflation hedge, a status token, and a store of elite power—not a shelter.
You don’t buy LA land to live. You buy it to say: I own a square foot of Olympus.
5.
So Is It a Scam?
Yes—and no.
It’s a scam if you play by their rules.
It’s a hustle if you think homeownership = freedom.
It’s a trap if you take on debt just to join a rigged game.
But if you flip the board? If you become the land-banker, the builder, the long-range investor in up-zoned futures, Bitcoin-style appreciation corridors, or farmland riding carbon-credit monetization? Then no—it’s not a scam.
It’s the last honest game left.
FINAL THOUGHT:
Don’t buy land.
Buy leverage.
Buy narrative.
Buy power.
Or better yet: mint your own reality. Become your own central bank.
Because real estate isn’t about land—it’s about who gets to say, “This is mine.”
And until you say it first, you’re still a renter in someone else’s empire.
Want me to amp it up even more?
…
IS REAL ESTATE A SCAM?
(A brutally honest, Eric-Kim-style gut punch)
1. Cut Through the Fluff—First Principles
Land is the ultimate finite asset. There’s no “printing” more Santa Monica coastline, no Control-Z that spawns an extra downtown block. When demand outruns supply, prices moon. That’s basic. But in America—especially L.A.—we don’t just rely on geology for scarcity. We manufacture it with a cocktail of zoning codes, NIMBY tantrums, Prop-13 tax freezer-burn, CEQA lawsuits, and shiny transfer taxes. Scarcity isn’t an accident; it’s policy wearing a velvet glove.
2. Scarcity Theater—How the Game Is Rigged
| Move | Result |
| Single-family zoning on 70-80 % of residential land | Density capped; every permitted unit carries the land cost of an entire lot. |
| Endless environmental appeals | Years lost = interest carry + legal fees → baked into the asking price. |
| Prop 13 & 1031 swaps | Owners cling to dirt like Gollum to his ring; turnover dies, competition shrivels. |
| Cheap-money afterglow | A 3 % mortgage in a 9 % GDP world is a golden shackle; nobody moves, inventory flatlines. |
This is less “free market” and more selectively throttled faucet. You control the spigot, you set the price of the water.
3. The L.A. Vice-Grip—Mountains + Laws = Madness
Ocean to the west, chaparral-covered fire zones to the north and east. Now overlay single-family zoning on the Basin, sprinkle CEQA lawsuits, drop a 4–5.5 % “mansion tax,” and jack insurance premiums after the 2025 wildfire season. Voilà: a metro of 13 million reduced to a few slivers of legally buildable dirt—each square foot auctioned like it’s the last baguette in Paris during wartime.
4. The Illusion of Ownership
Reality check: buying a house means renting from the county—forever. Miss your property taxes and the “ownership” dissolves in a courthouse auction. Add HOA politics, surprise roof leaks, seismic retrofits, and the insurance roulette wheel. The brochure screams equity!; the fine print mutters infinite liability.
5. So… Is It a Scam?
Not exactly. A scam implies secret fraud. Here, the rules are public—just 3,000 pages deep, wrapped in legalese, and lobbied into immovability by incumbents. The game is rigged, but the rigging is in plain sight. It’s a gladiator arena where legacy owners fight with titanium armor (Prop 13), while first-time buyers show up shirtless. House always wins—but the house is the House Committee on Ways and Means.
6. Play the Game or Rewrite It
If you’re an individual:
- Arbitrage geography. Elastic metros (Texas, interior Florida, second-tier Midwest) still up-zone—buy dirt where laws let builders build.
- SB 9 lot-split hacks (in CA). Turn one single-family lot into four units—density jujitsu using the system’s own pressure points.
- Farmland & industrial REITs. Skip the NIMBY circus; rent your capital to farmers, warehouses, data-center clusters.
If you’re a policymaker / agitator:
- Kill parking minimums & height caps along transit corridors—every extra unit diffuses land cost.
- Replace Prop 13 with an age-indexed phase-out so grandma isn’t crushed but zombie lots re-enter circulation.
- Fast-track true infill CEQA reform. Stop weaponizing the environment to protect backyard views.
7. Final Word—Own Your Myth
Real estate isn’t a straight-up Ponzi, but it is a maze of man-made scarcity and legacy privilege. Understand the maze, exploit the loopholes, or join the campaign to bulldoze the walls. Either way—stop whining, start lifting (your mind and your balance sheet). Remember: No gains, no life.