Don’t Blame Housing Affordability Problems on the Free Market | The Antiplanner
Incentives matter, and here incentivizing the politicians and bureaucrats to extort money from developers so the pols, and bureaucrats have more money to play with has resulted in housing unaffordability.
"Miami is one of many places where housing prices have reached crisis levels, and the Miami Herald editorial board blames the problem on the free market. Only government intervention in the form of subsidized low-income housing will fix it, says an August 3 editorial.
Wrong. Government caused the problem in the first place. No matter what the cause, subsidized housing for a few low-income people will not solve it, except for those lucky few.
Despite being one of the fastest-growing states in the nation, Florida housing remained affordable up through 2000. Miami was generally the state’s least-affordable housing market, probably because an influx of immigrants kept median incomes down. But from 1959 through 1999, median home prices remained between two and three times median family incomes.
That changed because of Florida’s 1985 Growth Management Act. Unlike Oregon’s law, this one relied less on urban-growth boundaries than on concurrency, that is, a requirement that new developments be approved only if the infrastructure is available to serve that development. While this sounds logical, it becomes an excuse for cities to reject or delay developments or to demand extortionate fees from developers."
The cure is to eliminate these restrictions on housing, allow the free markets to work, and housing prices will return to a more normal relationship to income, or continue restricting, and end up like California, and increasingly Oregon.