Want to Reduce the Cost of Housing? Build More of It

When it comes to the current debate over housing affordability, I feel like my position has been clear and consistent: Twelve years ago, I wrote a book called The Rent Is Too Damn High. At the same time, I also have to admit that most Americans do not share my preferred solutions.

My basic argument can be summarized in three words: Build more housing. There are a lot of ways to make that easier — feel free to buy the book! — but increased supply doesn’t seem to be what voters have in mind when they think about ways to bring down housing costs.

Only 30% to 40% of voters believe that a greater supply of housing would moderate prices, according to research from academics who are broadly sympathetic to the YIMBY (Yes In My Backyard) movement. Their research also shows that this is not generalized skepticism of supply-and-demand dynamics. If you ask the same question about other commodities, people understand the linkage.

In their most recent paper, the researchers — Christopher Elmendorf, a law professor at the University of California at Davis, and the political scientists Clayton Nall of UC Santa Barbara and Stan Oklobdzija of Tulane — survey voters about what they think would work. The most popular options are rent control, government subsidies for down payments, property tax cuts and regulations to prevent Wall Street firms from buying housing.

Economically, this is basically all nonsense.

If you push subsidies into a supply-constrained market, prices will go up in response, and you’ll be left right where you started. If you impose rent control, it will help incumbent renters who never plan to move, but it only serves to exacerbate scarcity.