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Because in the longer run extreme prices helps ensure new projects do get started when possible, and that current stock is maintained. Holding pricess below ma
by ChrisLomont 10y ago
Because in the longer run extreme prices helps ensure new projects do get started when possible, and that current stock is maintained.
Holding pricess below market rates helps ensure that over time current housing will be less maintained as money goes elsewhere, and as current housing can be converted into other more profitable land, it will be, thereby reducing housing overall.
There are 100s of papers showing this, which is why rent controls being bad is one of the things most economists agree on.
- eldavido 10y ago...and it's happening. Quick googling can't track down a source, but I heard somewhere reliable that housing starts are at a 9-year high in California. Higher prices = more incentive to build. It's that simple.