Ive heard repeatedly when trying to learn about our housing situation that we don’t have enough homes. I don’t understand how that’s the case or if it’s even true. Who or what is stopping more homes from being built exactly? If the demand is so high and the supply is so low then the suppliers would obviously ramp up production, right?
In: Economics
Local zoning regulations stop new housing from being build.
Local zoning regulations are created by local politicians who are voted in by residents who own current housing.
Those current house owners do not want value of their homes to go down (which may happen if a lot of new housing is constructed).
So basically very little new housing get created (far below demand).
Some non-competitive states (like California) can take away the rights out of the hands of local politicians, going against the wishes of locals, to mandate more housing – there is no viable mechanism for those locals to punish state politicians…no way to vote them out.
However, it is not possible in a lot of other states, e.g. NY tried to force higher zoning but the protests from local communities forced the governor to back down.
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