From the latest attempt to sort through Britain's housing problems:
To solve these problems, we have to recognise that land has special characteristics that make the normal rules of supply and demand inoperable – and make market exchange a poor way of handling it. Land is inherently scarce, and its control is inherently political.
Land is a scarce resource therefore we must use politics not prices and the market to allocate it? We're not certain that we've seen that particular economic stupidity before to be honest.
Economics is that study of the allocation of scarce resources and there really isn't anything in there which says that markets should not be used for scarce ones. We do agree that markets don't work, don't really exist, when a resource is not scarce - there's not much of a market in sea water for example. But that's the absence of scarcity making prices not work, not the presence of it.
Having entirely not got it our enthusiasts then go on to miss the implication of this point that they note:
The 20th century saw the same story played out all over again. This time, the focus was not on farmland but on housing. Today Savills estimates that the UK’s housing stock is worth £6.8 trillion – compared with £190bn for all agricultural land.
Not all of that value of the housing stock is the land underneath and the permission to build upon it but most certainly a goodly chunk of it is. At which point the solution should be obvious. That housing stock sits upon some 3% of the land of the country. There's perhaps another 7% under the factories, the schools and the roads, meaning that there's another 90% to go. We could and should simply convert some more of that low value agricultural land into the higher valued use of being built upon.
This is also known as making us all richer, converting some part of a scarce resource from a lower to a higher valued use. The only reason we don't is because we've allowed politics to determine the allocation of land not markets and prices.
As is so often true the solution to our problem is not that government, or politics, must do something but that we must stop government from doing the damn fool things they already do.
Blow up the Town and Country Planning Act and successors.