Housing costs

[tomh009]

[quote='danbrotherston' pid='83415' dateline='1598282155']
I mean this is a long scenario, but I fundamentally disagree with your base assumption, that in today's market there is any housing whatsoever that couldn't be built if the selling prices were lower.
(...)
I don’t believe that a tiny decrease in housing prices would bring construction to a halt in the real world. On the margin maybe some tiny number of projects would be cancelled or deferred, but not anything really noticeable.

Fundamentally I think the problem with the housing market is not the actual cost of constructing housing, but the profit that is being generated from doing so and the regulations which limit who can build and where.

The profit is not a problem in itself; it’s more of a symptom. If large profits are possible it’s probably because it’s too hard to build, meaning that only those who can navigate the system are able to build.

I think it's actually simpler than that: while construction costs have been going up, the real driver is the cost of the land. And the increases in the cost of the land have been driven by scarcity of (desirable) land for development. And that, in turn relates very closely to zoning restrictions.