I'm not sure what you mean by "the wealthy care very much." But perhaps it has something to do with the definition of "wealthy." I would say that anybody who owns a house free-and-clear in California, or another high-cost location such as Beijing of Vancouver, as "wealthy."
But I also separate out this sort of wealth from, say, stocks or highly liquid wealth in a bank account. Land, and even structures themselves in a supply constrained location, act as a far more insidious form of capital than dollars or stocks. They are used to extract rents from people, just as monopolies are used to extract wealth, or capitalists with a monopsony on labor can extract the excess value of labor, far more than capital interest would normally demand.
There's a solution to this, capture the excess value that real estate commands and redistribute it, either through taxation, or modified forms of limited ownership. This has two effects, the primary one being that it eliminates the motive to use housing as an appreciating asset. People can still use their homes as a store of value, meaning that they can put work into their homes to improve them to their liking, and not have it all taken away. But they do not take the value that comes merely from excluding people from access to the area, the increase in land values. (Though in places where there is not change in land use allowed, the homes themselves start to behave as land does, commanding excess rents merely due to the inability to let more people have access to an area.) The secondary effect is that these socially created land rents get distributed to all of society, who generate the value, rather than the person who is speculating.
There are two end games to the bubble in land prices that we are currently seeing. A slow deflation, or a sudden pop. However, since so much of our wealth is predicated on housing values, and since so many of our banks are dependent on high valuations, there will always be a strong enough political coalition in the US to stop a pop. We need to build a coalition that prevents the growth of the bubble, committing it to steady deflation.
But I also separate out this sort of wealth from, say, stocks or highly liquid wealth in a bank account. Land, and even structures themselves in a supply constrained location, act as a far more insidious form of capital than dollars or stocks. They are used to extract rents from people, just as monopolies are used to extract wealth, or capitalists with a monopsony on labor can extract the excess value of labor, far more than capital interest would normally demand.
There's a solution to this, capture the excess value that real estate commands and redistribute it, either through taxation, or modified forms of limited ownership. This has two effects, the primary one being that it eliminates the motive to use housing as an appreciating asset. People can still use their homes as a store of value, meaning that they can put work into their homes to improve them to their liking, and not have it all taken away. But they do not take the value that comes merely from excluding people from access to the area, the increase in land values. (Though in places where there is not change in land use allowed, the homes themselves start to behave as land does, commanding excess rents merely due to the inability to let more people have access to an area.) The secondary effect is that these socially created land rents get distributed to all of society, who generate the value, rather than the person who is speculating.
There are two end games to the bubble in land prices that we are currently seeing. A slow deflation, or a sudden pop. However, since so much of our wealth is predicated on housing values, and since so many of our banks are dependent on high valuations, there will always be a strong enough political coalition in the US to stop a pop. We need to build a coalition that prevents the growth of the bubble, committing it to steady deflation.