It's a housing version of the national debt philosophy, where debt doesn't matter as long as you're outpacing it with growth. If last decade you had $25k HELOC on a 400k house and today you have $50k HELOC on a 800k house, your finances have clearly improved
Except that you still can't sell the house or you won't have a place to live, so they've only improved on paper before you account for the opportunity cost of the higher imputed rent, i.e. the higher cost of living. Meanwhile you could have gotten the $50k HELOC against the $400k house, which was the only part doing anything that would actually affect your life.
If you sell your house and then rent then you'd be paying rent and therefore have direct negative exposure to the high housing costs. That also doesn't create any new supply. You're still living somewhere and therefore still need somewhere to live. For someone else to have a housing unit while you still have one, you have create more, not just play musical chairs.
When you are old maybe you don't need to live in a house that was made for a family? Or you can give your house to your children, and then let them pay your rent. They're already paying their own rent.
Sure, but the only thing available anywhere in your neighbourhood is big houses made for families.
That's the whole missing middle thing, there's luxury pied-à-terre sold to millionaires downtown, and then there's the endless stretch of large single-family houses in the suburbs.
