Imagine a world in which the government caps the number of new cars that can be manufactured in a given year to 1,000. The price of cars would skyrocket across

Imagine a world in which the government caps the number of new cars that can be manufactured in a given year to 1,000. The price of cars would skyrocket across the board. People would respond to this new reality in predictable ways. They would buy cars and sit on them for the resale value. Car rentals would become the norm and car ownership would be exclusively for the well off. Bandit signs would pop up in every city offering cash for used cars. Investors, foreign and domestic, would start sinking large percentages of their funds into this new “safe” asset. ETFs and REITs would be created to give regular people access to this amazing new investment opportunity. In this hypothetical world, it would be foolish to blame individual actors for the price of cars being so high, when the root of the problem is obviously the artificial cap on the number of new units that can be manufactured. It’s the same with real estate. It’s foolish to blame AirBnB, landlords, investment groups, foreign investors, and Boomers for the price of real estate. These individual actors are merely responding to the reality that local governments make it nearly impossible to build new housing.