COMMENT | Why building more won't make houses affordable

COMMENT | From Sydney to San Francisco, the housing affordability crisis is affecting communities across the world.

Younger generations priced out of homeownership are locked in a precarious private rental market while declining government support for social housing and income support has pushed lower-income renters to the brink of homelessness.

A growing chorus claims these problems could be fixed by simply building new homes. According to this view, housing is more expensive because there’s not enough new supply.

They argue that land use regulation and planning processes restrict new construction, adding costly delays and uncertainty to the development process.

Others contest that simple ‘supply side’ narratives ignore the ‘demand side’ factors underlying global house price inflation, such as low-cost credit under financial deregulation, or government incentives to encourage property investment.

They point to the political power of...