Something we keep being told is that Britain’s house prices are too high. We’re happy with that as either a statement or a critique. To which we say, well, build more houses. The answer that all too often comes back is no, we’ve got to build the right type of houses.
That is, only if we build more affordable housing will housing become more affordable. This having the delight, for the proponents, of confusing two different meanings of affordable. There’s the real one, cheaper, and then there’s the constructed one, special rent limited stuff run by a bureaucracy. For, so goes the argument, building a lot of expensive housing doesn’t make housing more affordable in that real and accurate sense.
This is incorrect:
If a metropolitan area was to alter its system of permits and rules in a way that enabled a substantial expansion in the quantity of housing being built, would this step help to make housing more affordable for those with lower and moderate income levels?
Two answers are hypothetically possible here. One answer points out that new market-driven housing construction will tend to be higher-priced, and therefore that in it offers no near- or middle-term assistance to people struggling with housing affordability. The other answer readily admits that new market-driving housing construction will tend to be higher-priced, but argues that an overall rise in the quantity of housing supplied will affect prices across the entire housing market, not just one part of it.
As it turns out the simplistic explanation wins. Having more housing reduces the price of housing.
This means, of course, that we can solve Britain’s housing problems simply by building more housing, Rent controls, bureaucracies, need make no appearance. In fact, kill off the planning bureaucracy which stops people from building what people would like to live in , where they’d like to live, and we’d solve the problem entirely.
Or, as we repeatedly say, the solution to Britain’s housing problems is to blow up the Town and Country Planning Act 1947 and successors.