We see the same problem here in Europe, maybe to a less extreme extend. We have a few economy hotspots with rapidly raising real estate prices. One fundamental

We see the same problem here in Europe, maybe to a less extreme extend. We have a few economy hotspots with rapidly raising real estate prices. One fundamental problem is, that those people, who could change things have litte interest in changes. Homeowners like to see their property value rising and for cities life is easier without a growing population. If one says: let free markets take care of that, the problem is exactly that there are no free markets. A free market would mean, that anyone owning a piece of land could build there without limitations. But zoning laws and building size regulations prevent exactly that. As a consequence, building permits have exploded in value like taxi concessions once did. They are no longer tied to the economy of building/owning a cab, but of a limited market. Munich is one of the most expensive cities in Germany, but it is closely surrounded by farmland. The housing problem could be solved easily, if more of it were allowed for building. But as this happens only at a very small speed, land value can multiplay up to 100x when a building permit is issued. This multiplier shows how skewed the market is.