In Bill Virgin’s column How to rein in housing prices? It’s simple [SeattlePI], he draws a comparison between keeping gas prices down and housing prices.
The first reaction to gasoline prices over $3 per gallon to many is to control prices, yet that limits expenditures on new drilling and refining ventures. With the reduced affordability of housing, the author speculates tongue in cheek what would happen if housing prices were controlled.
If gouging the motorist is wrong, so is gouging the prospective home buyer — or so this line of thinking goes. The solution is simple. Make it a crime to sell your house for more than you bought it.
How else do we stop the exodus of the middle class from new urban areas, sprawl and longer commute times?
Sarcasm aside, neither gasoline nor housing prices lend themselves to easy fixes or palatable remedies. Gasoline is going to be more volatile and, on average, more expensive as worldwide demand for petroleum grows and supplies tighten — unless you’re willing to allow drilling anywhere, set prices for every step in exploration, production, refining and marketing, or take everyone’s car away.
With smart growth initiatives, new urbanism, zoning and other restrictions the very things that make certain areas more appealing to buyers, are constricting supply and development of new housing, a solution to affordability has to be underneath another stone that needs to be “un-turned.” Its hard to believe that current property owners, who are sitting on a windfall of homequity gains, would be willing to give that up to sell their homes for what they paid for it.
And by the way, aren’t we in a free market system?