There is no such thing as a “housing crisis.” The notion that there aren’t enough homes or that housing is inherently unaffordable is a manufactured problem, often used to justify government intervention.  In reality, the issue is not a shortage of homes but a distortion in the market caused by political interference.  Housing availability is naturally determined by the efficiency of resource allocation, which is maximized when property rights and free market principles are upheld.

It’s easy to forget that homes are a product of foresight and saving.  To build a house, one must accumulate resources and invest them wisely, just as an individual must save to improve their future living conditions.  Imagine a man, Smith, living in a primitive society.  If Smith wants to construct a shelter, he must gather materials, but doing so requires time and energy that could be spent on immediate survival needs.  If his time preference is too high—if he can’t delay gratification—he will never build that shelter, leaving him vulnerable.

Smith’s well-being is limited by how much he can produce and save.  His life improves when he saves enough resources to invest in better tools and techniques, which make his efforts more efficient.  However, this improvement is only possible if his property is secure.  If his neighbor, Jones, regularly steals from him, Smith will struggle to get ahead.  Jones’s parasitism erodes Smith’s ability to produce and save, trapping him in a perpetual cycle of survival, not growth.

Now, expand this example to the modern housing market.  The real issue is not the number of people needing homes but the number of barriers created by government regulations, zoning laws, taxes, and rent controls.  These artificial constraints reduce the supply of homes and drive-up costs.  The so-called housing shortage is not a result of overpopulation but rather the heavy hand of government, which distorts natural market forces and makes housing unaffordable for many.

Like Smith’s village, our society’s well-being is constrained by artificial barriers.  The problem isn’t the population or the demand for housing, it’s the parasitic layers of regulations and political meddling that slow down or block the creation of new homes.  When property rights are respected, and individuals are free to build, save, and invest without unnecessary interference, housing becomes affordable and abundant.

Don’t be fooled by claims of a “housing crisis” that can only be solved through more government action.  It’s not a shortage of homes but the growing list of political constraints that hinders the market.  By removing these barriers, production can flourish, and housing will naturally become more accessible to all.

Reference

Ludwig von Mises