If planning restrictions which increase the costs of building new houses in London were removed would this supply solution help provide affordable homes Ian?
Isn’t that the Edward Glaeser thesis -author of ‘Triumph of the City’?
In my opinion that is the strongest argument for supply improving housing affordability.
Ian if you want to dispute the supply side argument (which may be possible) shouldn’t you engage with the strongest supply-side arguments not argue against straw men?
Here is an excerpt from Wikipedia, summarising Glaeser’s economic research on housing.
During the 2000s, Glaeser’s empirical research has offered a distinctive explanation for the increase in housing prices in many parts of the United States over the past several decades. Unlike many pundits and commentators, who attribute skyrocketing housing prices to a housing bubble created by Alan Greenspan’s monetary policies, Glaeser pointed out that the increase in housing prices was not uniform throughout the country (Glaeser and Gyourko 2002).
Glaeser and Gyourko (2002) argued that while the price of housing was significantly higher than construction costs in Boston, Massachusetts and San Francisco and California, in most of the United States, the price of housing remained “close to the marginal, physical costs of new construction.” They argued that dramatic differences in price of housing versus construction costs occurred in places where permits for new buildings had become difficult to obtain (since the 1970s). Compounded with strict zoning laws the supply of new housing in these cities was seriously disrupted. Real estate markets were thus unable to accommodate increases in demand, and housing prices skyrocketed. Glaeser also points to the experience of states such as Arizona and Texas, which experienced tremendous growth in demand for real estate during the same period but, because of looser regulations and the comparative ease of obtaining new building permits, did not witness abnormal increases in housing prices.
Glaeser and Gyourko (2008) observed that in spite of the mortgage meltdown and the ensuing drop in housing prices, Americans continue to face housing affordability challenges. Housing policy makers, however, need to recognize that housing affordability differs from region to region and affects classes differently. Public policies should reflect those differences.