Stopping sprawl forcefully

By restricting land supply, government makes housing unaffordable.  It is astounding that so many places all over the world have chosen governments that are pushing the middle class into a lower standard of living.  Just like here.  

Middle Income Housing: International Situation 
Huffington Post, January 22, 2015  
By Wendell Cox, Principal, Demographia

Excerpts:
Hong Kong, Sydney, Vancouver and the San Francisco Bay Area have the worst middle-income housing affordability in 9 nations, according to 11th Annual Demographia International Housing Affordability Survey. Median house prices in Hong Kong were 17 times the median household income, a measure called the "median multiple." Vancouver had a median multiple of 10.6, Sydney 9.8, while San Francisco and San Jose were each at 9.2. Other cities (metropolitan areas) with especially high median multiples included Melbourne (8.7), London (8.5), San Diego (8.3) Auckland (8.2), and Los Angeles (8.0). 

Why are there such large differences in housing affordability? Put in layman's terms, the problem is land shortages created by planning policies. Cities have drawn urban growth boundaries, beyond which middle-income housing construction is virtually prohibited. Consistent with economic axiom, restrictions on supply lead to higher prices, other things being equal. These "urban containment" policies drive up land prices, which also drives up house prices. House construction costs are little different, for example, between the Atlanta and San Francisco metropolitan areas. But the land in San Francisco drives prices to more than three times that of Atlanta, income adjusted.

Urban containment seeks to stop urban expansion ("urban sprawl"). Yet, as The Economist indicates, sprawl can only be stopped "forcefully. But the consequences of doing that are severe." These include higher house prices and, according to Chief financial writer of The Financial Times Martin Wolf, "...ultimately force people to live in more cramped conditions than would occur without limits on supply."

There is increasing international concern about the declining fortunes of middle-income households. At the Brisbane G-20 Summit in November, governments around the world declared "better living standards" to be the highest priority and indicated a commitment to reduce poverty. This requires not only higher incomes, but avoiding policies that unnecessarily raise the cost of living, such as the cost of housing. Middle-Income housing affordability relies on a "plentiful and affordable" supply of land for development on the urban fringe, as urbanist New York University Professor Shlomo Angel indicates in his introduction to this year's Demographia Survey.