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Yes, supply side restrictions should be reduced. However, artificial demand must be dealt with as well, or we overbuild resulting in a bunch of empty homes. An
by cudgy 4y ago
Yes, supply side restrictions should be reduced.
However, artificial demand must be dealt with as well, or we overbuild resulting in a bunch of empty homes. Another disadvantage to only dealing with the supply side is the prices of building materials will be unnecessarily high due to additional artificial demand from investors building homes as stores of value.
Finally, supply side only solution creates a potential nonlinear event where investors dump once the homes start to depreciate. A seesawing which the Fed has bolstered with artificially low rates across many asset classes. Not necessarily a bad thing altogether for the housing asset class, but it seems inefficient from a resource standpoint.