The headline is a bit of a mischaracterization. Density advocates bear a lot of responsibility for pricing younger people out of owning their own homes but the Federal government programs to finance subsidize home ownership, in particular Fannie Mae and Freddie Mac but also including the VA loan programs and maybe even Farmer Mac have a lot to do with it as well. These programs have had the same effect on prices as the Federal government's loans and subsidies have had on the cost of a college education. Ditto for medical care.
The chart below shows housing costs approximately matching overall inflation for the current century through last year:
Source: AEI
Compare to unsubsidized non-governmentally financed TVs or the classic medical examples of procedures paid for out-of-pocket such as Lasix eye surgery or cosmetic surgery.
Rant over, on to Reason (dot org), March 13:
Since the 1960s, planners have convinced many state and regional governments to limit the physical spread of urban areas.
High housing prices have reached crisis proportions in much of the country. You can blame the war on sprawl for that.
Since the 1960s, planners have convinced many state and regional governments to limit the physical spread of urban areas. They called this "growth-management planning," and the most common growth-management tool was an urban growth boundary. Outside such boundaries, development was practically forbidden.
About 99 percent of Oregon, for example, is outside of an urban growth boundary. In most of those places, families cannot build houses on their own land unless they own at least 80 acres, actually farm it, and have thereby earned $40,000–$80,000 per year (depending on soil productivity) in two of the last three years.
Hawaii passed the nation's first growth-management law in 1961. By 1970, the state had the most expensive housing market in the country. A standard measure of housing affordability is the price-to-income ratio: median home price divided by median family income. Hawaii's ratio in 1970 was more than 3, while in every other state it was 2.4 or less. California's ratio was 2.2.
In 1963, the California legislature gave cities control over what happened outside their limits. In the 1970s, a slow-growth movement prompted many cities to draw urban growth boundaries, effectively forcing all new development to happen within their boundaries. By 1980, the price-to-income ratios in many California urban areas were above 3; some were above 4.
Oregon passed a growth-management law in 1973, Florida in 1985, New Jersey in 1986, and Maryland and Washington in 1992. Housing affordability declined after all these laws were implemented.
Most New England states abandoned the county level of government, effectively turning land use regulation of county lands over to the cities. In many cases, these cities severely restricted development of land outside their boundaries. Housing prices rose, especially in Massachusetts, Rhode Island, and Connecticut.
Colorado did not pass a growth-management law, but the Denver Regional Council of Governments drew an urban growth boundary in 1997. Denver price-to-income ratios rose from 2.2 in 1990 to 3.5 in 2005. With the cooperation of county governments, a few other cities, including Fort Collins and Missoula, also adopted urban growth boundaries, making their housing more expensive as well.
In a 1975 Environmental Law article, John McClaughry (now a Reason contributing editor) called these laws and plans the "New Feudalism." While they allowed private ownership of land, he pointed out, they transferred development rights to the government.
Originally, the war on sprawl was supposed to protect farmlands. But the United States has three times as many acres of agricultural land as it actually uses for growing crops. Moreover, cropland acreage has steadily declined not because of urbanization, which covers only 3 percent of the nation's land, but because the per-acre yields of most crops have grown faster than our population....
....MUCH MORE
Back to the agencies, the Fed's tapering, by reducing the amount of Fannie/Freddie paper taken off the market by Powell et al, should raise mortgage interest rates but those bundles of mortgages will still have the implicit government guarantee, meaning rates will still be lower/prices higher than the market would otherwise be pricing.
