Rising prices make us look for someone to blame, but the broken market has a simple cause: it’s illegal to build enough homes.

Housing affordability might be the defining economic crisis facing Americans today. Prices have surged  in recent years, and the country is short millions of homes.



There are both obvious and subtle harms created by the housing shortage. When housing prices rise (as compared to incomes) people have less money left over for other goods and services. Others might be unable to afford housing at all, increasing homelessness. Productivity slows because workers find it difficult to afford living in high-productivity cities. And fertility rates often fall as high housing costs cause families to put off or, even avoid, having children.

Naturally, people are looking to hold someone responsible for the high cost of housing. Increasingly, both the left and the right are placing blame on institutional investors — private equity firms and large corporations that buy residential properties. The Senate recently voted to advance the 21^st Century Road to Housing Act, which would, among other things, ban institutional investors from buying single-family homes.

...read more at thedailyeconomy.org