Why building more won’t make houses affordable

FROM Sydney to San Francisco, the housing affordability crisis is affecting communities across the world.

Younger generations priced out of homeownership are locked in a precarious private rental market, while declining government support for social housing and income support has pushed lower-income renters to the brink of homelessness.

A growing chorus claims these problems could be fixed by simply building new homes. According to this view, housing is more expensive because there is not enough new supply. They argue that land use regulation and planning processes restrict new construction, adding costly delays and uncertainty to the development process.