I currently live in Manhattan and I've lived in London (Golders Green, Hampstead) and Paris (7th, 6th). The reason why costs are rising is because of land use

I currently live in Manhattan and I've lived in London (Golders Green, Hampstead) and Paris (7th, 6th). The reason why costs are rising is because of land use restrictions through zoning and building codes that regulate housing and commercial real estate density. In other words, politically induced scarcity benefiting wealthy landowners at the cost to those people wishing to buy housing, to rent an apartment, or to run a business is the cause for rising housing prices. The answer is deregulating the politically induced scarcity of land use. The politically induced scarcity interferes with the market efficiency that would otherwise allow the housing to be more affordable. This is a basic principle of microeconomics and was initially explained by David Ricardo when he explained that the Corn Laws that restricted the import of corn into Britain benefited landowners because it artificially increased the cost of corn thus making the cost of land more scarce and expensive. David Ricardo felt so strongly about this that he joined Parliament to overturn the Corn Laws. Similarly the solution today is to deregulate the overly restrictive zoning and building code regulations that cause the scarcity. Economist (and FT columnist) Tim Harford explains this in more detail in his book, "The Undercover Economist."