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Originally Posted by CaliNative
Yes, demand exceeds supply. But why? Why isn't supply matching demand? Population growth? High land and commodity imput costs? Zoning laws and "NIMBYism" preventing higher density developments? Lack of construction workers? Wages not keeping up with housing costs? A problem with our potential construction workforce--drug abuse, laziness? Lack of government spending on public housing, or tax incentives to build affordable units?
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Yes, to all of this.
Another reason to add is that the government over-corrected with respect to financial regulations in that it's now virtually impossible to qualify for a mortgage without practically selling your first child. Even if you have a good-paying job and good credit, it is still required that you pay for expensive PMI if you want to get a zero-down payment loan or save 20% of the cost of a home for a down payment.
Because it's so difficult to get financing for a home now, the demand for starter homes that these type of buyers would normally purchase is completed zapped, thus homebuilders / developers don't even bother wasting their time / money building these type of entry-level / affordable homes.
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Is there a quick way to reduce housing costs?
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Practically speaking? No.
A couple quick solutions would be for government to loosen up some on financial regulation tied to qualifications for a home mortgage, and for cities with strict zoning regulations to relax their building standards. But these solutions are very unlikely to be implemented on a large scale basis.