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The Market Alone Can’t Fix the U.S. Housing Crisis

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Unaffordable housing is a drag on regional and national economies. In areas where housing costs are high, employers end up effectively transferring significant sums to landlords as the cost of attracting talent.

Unaffordable housing is a major drag on the economy. Here’s what governments — and businesses — can do to meaningfully improve the situation.

But what will it take to fix this problem? Will market-based solutions suffice? If not, what kinds of interventions are necessary? Recent research shows that the market itself needs to be fixed. Any plan to overhaul the housing market needs to, first, confront the power of landlords to raise rents. Second, it requires rethinking public governance of housing markets behind simplistic prescriptions to just free the housing market from government regulation, assuming lower rents will follow.

 

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