Blame Regulations for the High Cost of Housing, Not People
One of the biggest factors constricting the supply of housing is zoning and building regulations imposed by local governments.
“The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.” – Thomas Sowell
An article published in the Guardian last week claimed that Montana’s housing affordability crisis has been “created by Montana’s booming popularity as a place for people with money.” However, the author did not include a shred of actual data in the article to support this claim.
Experts who have looked at the data conclude that migration is not to blame for Montana’s rising housing costs.
A recent analysis by the Bureau of Business and Economic Research looked at the trends and found no evidence that in-migration was causing Montana’s house price inflation.
Another analysis from this summer found that only 6% of home buyers were from out-of-state in Missoula, MT – one of the hottest markets in the state. The CEO of the Missoula Organization of Realtors, said at the time:
“Regardless of where a buyer originates, the industry in Missoula remains challenged by a lack of supply and rising home costs.”
He’s right. The fact is, there simply aren’t enough homes. Montana’s housing supply isn’t keeping up with demand – regardless of in-state or out-of-state buyer status – and it is absolutely driving up costs.
One of the biggest factors constricting the supply of housing is zoning and building regulations imposed by local governments. For example, Bozeman has effectively made dense, cheap housing illegal in half the city with zoning regulations that allow only for single family style homes – the most expensive type of home to build:
Montana policymakers can’t tell people not to move here. They also can’t tell people to stop buying homes. But they do have it in their power to reduce zoning and building regulations that drive up the cost of housing.
For Liberty,
Kendall Cotton
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