Why would the monthly payment be lower than renting? People are usually willing to pay more on mortgages than renting, since they get a house after 30 years or

Why would the monthly payment be lower than renting? People are usually willing to pay more on mortgages than renting, since they get a house after 30 years or so (and of course, the person who is willing to pay the most gets the house). Let's say 3 people are willing to pay $1500, $1600, and $1700/mo in rent. For owning, they are willing to shift an extra $1000/mo from saving in the stock market to home equity, paying $2500, $2600, $2700. There is only one house available. For owning, the seller can charge a price where the mortgage works out to $2700/mo. The person willing to pay $2700 gets the house, and the others are priced out. Now lets say a landlord comes in. He offers $2800/mo to buy it to rent. The max he can rent it for is $1700/mo, so he does that. The same person gets the house, and the same people are priced out. In every case, the price that is charged is determined by who can pay the most. Unless people are willing to pay less to own the house, I can't think of why the monthly mortgage payment would ever be lower than renting. What a policy prohibiting renting actually seems to do, is force people to shift their (monthly) savings into real estate speculation as a condition of living there. There are some downsides to this. If the local economy is bad and you lose your job, it's likely your home value may not be good either. And people without substantial monthly savings to shift will be at a disadvantage. The biggest argument I've seen in favor of encouraging home ownership, is that people cut back on spending in order to make their mortgage payment, and as a result save more overall (by building home equity savings instead of spending). But that's a pretty different outcome than making housing affordable.