What has happened in SF, NYC, London, is that the high cost of housing is caused by market inefficiencies as pointed out by a number of economists (eg, Edward G

What has happened in SF, NYC, London, is that the high cost of housing is caused by market inefficiencies as pointed out by a number of economists (eg, Edward Glaeser, Paul Krugman, Tim Harford) called “rent seeking” where politics is used to artificially limit supply (in this case through zoning restrictions) to create artificial scarcity. This is true of NYCs 13,000 limit on Taxi medallions which caused them to have a market value of $1.2 million until Uber came along and provided alternatives (the values have dropped to about $700k). The “rent seeking” is a regressive tax which transfers wealth to billionaire real-estate developers like Donald Trump from the middle class and the poor. It also harms the economy as a whole since more income is going towards rent and housing mortgages less income is going towards goods and services. It also artificially limits construction so there are few fewer construction jobs than there would be if the market inefficiencies were removed. Edward Glaeser is author of “Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier” Tim Harford is author of “The Undercover Economist, Revised and Updated Edition: Exposing Why the Rich Are Rich, the Poor Are Poor - and Why You Can Never Buy a Decent Used Car!”