Government has been the principal factor preventing the 鈥渁ffordable housing鈥?that politicians talk a
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In the San Francisco Bay Area, 66 percent of the new mortgages were of this type.
Why this difference in times and places? Because housing prices were skyrocketing in some places and times, so that people of modest incomes had to go out on a limb to buy a house, if they expected to buy a house at all.
But why were housing prices going up so fast, in the first place? A number of studies of communities across the United States and in countries overseas turned up the same conclusion: Government restrictions on building.
While many other factors can be involved 鈥?rising incomes, population growth, construction costs 鈥?a scrutiny of the times and places where housing prices doubled, tripled, or quadrupled within a decade shows that restrictions on building have been the key.
Attractive and heady phrases like 鈥渙pen space,鈥?鈥渟mart growth,鈥?and the like have accompanied land use restrictions that made the cost of land rise in many places to the point where it greatly exceeded the cost of the homes built on the land.
In places that resisted this political rhetoric, home prices remained reasonable, despite rising incomes and population growth.
Construction costs were seldom a major factor, for there was relatively little construction in places with severe building restrictions and skyrocketing home prices.
In short, government has been the principal factor preventing the 鈥渁ffordable housing鈥?that politicians talk about so much.
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