So a developer working with the government and getting incentives builds a nice neighborhood of homes that people can afford. People in the target income group buy the houses. All good. But when housing prices spike, what keeps the houses in the hands of the targeted economic group. When owner goes to sell, won’t the market dictate what happens, opening up the neighborhood to what has been referred to as gentrification?
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You have to build housing to match population growth. If there are more people tomorrow, then you have to have more housing. So more houses have to continue to be built.
A lot of the current price spiking is left overs from the financial crisis when the housing market collapsed. For several years basically no houses were built and then construction starts were slow to recover. So housing is a couple years behind where it needs to be to keep up with demand.
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