Housing should follow the normal economic laws but it doesn't seem to. Part of it is regulation, and part of it is an odd kind of scarcity. If there were no housing regulations, I'm sure you' get a lot of new housing in the Bay area and people would live in there (despite it being potentially unsafe). Heck .. I was actually entertaining the live-in-a-container option :-p
I'm still struggling to understand the scarcity aspect of housing. Supply of land isn't increasing so you'd think the asset would increase in price over time. That said, population isn't growing that much - prices in a city like Toronto have reached epic proportions fueled by a combination of speculation and foreign investment. To me, the problem lies in the fact that we are living in a highly leveraged economy. Will that ever stop? Doesn't seem like it.
You seem to be fundamentally ignoring the simplicity of supply and demand. If people could offer container housing legally, they would. However, they can't so the supply of legal housing is constrained. This drives the price up.
The same applies to any protectionist laws the greater fuckwad property owners in the area introduce. Nobody wants to see their property value diluted so they vote against every single housing measure as long as the demand is there.
I'm still struggling to understand the scarcity aspect of housing. Supply of land isn't increasing so you'd think the asset would increase in price over time. That said, population isn't growing that much - prices in a city like Toronto have reached epic proportions fueled by a combination of speculation and foreign investment. To me, the problem lies in the fact that we are living in a highly leveraged economy. Will that ever stop? Doesn't seem like it.