The Democrats claim that if Joe Biden were reelected, he would lower housing costs. However, there is no way for the government to reduce housing costs other than by getting out of the private housing market.
Most tools available to politicians for lowering housing costs involve a forced transfer of wealth from taxpayers to tax consumers.
These tools violate private property rights and exacerbate the problem by causing shortages or driving prices up.
The one policy that could effectively reduce housing prices—getting the government out of the housing market—would never be proposed by a Democrat administration.
Cutting regulation and taxes could reduce new house prices by approximately 23.8%. All other tools at their disposal would be destructive.
Rent control is often the first policy proposed to address housing issues, popular with voters wanting lower rents. However, it increases demand for rentals while decreasing supply. For example, the average US rental is $1,987 per month.
If someone offered you $100 a month to rent your spare bedroom, you’d refuse. But if they offered $10,000, you’d consider it. Thus, as rental prices rise, supply increases.
Conversely, if the government capped rent at $100, you wouldn’t rent out your spare bedroom, demonstrating that lower prices reduce supply.
Price caps on home sales are another proposed idea, but they generally gain no traction.
Aside from being a significant violation of private property laws, they would cause housing shortages and threaten the entire economy.
Hellbound and Down 