Your thought exercise is interesting, but not in the way you think. Property owners do, in fact, conspire with each other to prevent the construction of new ho

Your thought exercise is interesting, but not in the way you think. Property owners do, in fact, conspire with each other to prevent the construction of new housing (via zoning laws). They do this, as you say, so that they can get richer. Allowing them to get away with it (by denying the fact that there is a supply problem) plays right into their hands. What we need to do is thwart their scheme and, through better government, legalize the construction of new housing so that wealthier people who own much of the existing property stop seeing artificial government created gains in the the value of their housing because they've conscripted the government into their cartel.