White House economic advisers have produced a steady diet of white papers this year to spotlight the puzzle of sluggish productivity, which economists want a better handle on because it helps explain why incomes for the broad middle class aren’t rising. Their latest target: land-use restrictions.
Housing is growing less affordable because there’s more demand for rental and, increasingly, owner-occupied housing, but little new supply. This hasn’t been a problem until recently—there’s been a considerable backlog of foreclosures and other vacant homes following last decade’s property bust. Throughout the housing slump, policy makers have focused on boosting demand by keeping mortgage rates low and expanding access to credit.
Now, there’s growing attention on what’s happening on the supply side. Some cities face supply constraints beyond their control. Coastal cities often see much pricier housing—and considerable price volatility—because there aren’t too many places left to build.
View Article