No solution to the housing crisis is without pros and cons. This is true of the myriad schemes proposed by government officials as well as free market solutions.
Government programs do help some low-income families, but the demand for that assistance far exceeds the supply. As an example, over 20 million families are cost burdened (paying more than 30 percent of their income for housing). The government’s Section 8 housing voucher program serves about 3.4 million families. To serve all of the cost burdened families, the voucher program would need to be expanded six-fold. Paying for this largesse would require a substantial tax increase, which would add to the burdens faced by other struggling families.
The same is true no matter what scheme the government attempts. Because values, including housing, must be produced, those who not produce those values themselves must obtain them from others. Government does not produce anything; for government to provide housing assistance, it must take the money from taxpaying individuals and businesses.
The government’s attempts to build and operate public housing projects have been a failure. Those projects quickly fell into disrepair and were ultimately abandoned. Zoning and similar land-use regulations restrict new construction and drive up the cost of housing. Rent control has motivated many owners to withdraw their rental properties from the market and reduced the supply of housing. Eviction moratoriums in response to the pandemic have forced many landlords to sell their properties because they can no longer afford to pay the expenses.
In short, everything the government has attempted to solve some housing issue has been a failure and made the problem worse. Certainly, some individuals have benefited, but the costs have been substantial and the problem has not been resolved.
This does not mean that a free market is like the Garden of Eden—an endless bounty of values available for the taking. A free market protects the individual’s freedom to produce and trade values, but it does not guarantee success in doing so. Even when supply equals demand, some individuals will not be able to obtain the housing they desire in the location they want. This isn’t a flaw in the free market. It is simply recognition of the fact that we can’t always get what we want. However, the free market does provide the freedom to try to get what we want.
Because the free market protects the individual’s freedom of choice, we will make decisions that others do not like. In such situations, in a free market, those who disagree cannot use force to compel actions that they desire. They must respect and accept our freedom to choose or attempt to change our mind through persuasion.
The market for affordable housing is huge. Developers and housing innovators can meet the demand and be profitable. But for that to occur, we must remove the controls and regulations that stifle the production of housing. We must restore freedom to housing producers.