>Someone ELSE can come it, charge less, and get all the customers to go to them instead.
Except there are huge entry costs, and all that theoretical ROI disappears as soon as you enter the market, because the existing monopoly starts competing.
To make a profit, you need some advantage over the them, like efficiency, innovation or goodwill. If all you can do is exactly what they do but at market price, well... they can do that too.
How would that apply to the Bay Area Housing market?
If someone started building a whole bunch of housing in SOMA, do you believe that this ROI would disappear quickly, due to housing prices hitting rock bottom?
No, I was mostly arguing generally, that a monopoly can exist without it being the government's fault. But I think it's fairly clear that the housing market is indeed strongly influenced by regulation.
Except there are huge entry costs, and all that theoretical ROI disappears as soon as you enter the market, because the existing monopoly starts competing.
To make a profit, you need some advantage over the them, like efficiency, innovation or goodwill. If all you can do is exactly what they do but at market price, well... they can do that too.