What the heck happened to supply and demand economics?

[Scott Passman]

What happened to the basic understanding of supply and demand? I didn’t grow up in a financially savvy household, but even as a kid I remember having a distinct awareness and understanding of supply and demand and its impact on prices. There is so much discussion and legislation going on in our country about the need to implement rent control through major metros, and even state wide, in addition to how our government needs strip away landlord rights such as basic screening and ability to evict tenants out of their own personal property. This is INSANE. We are already seeing property owners in places like Seattle and New York moving out of the market or going through the process taking rentals off the market reducing overall supply.

Looking at new housing (commercial and residential) build data nationally over the past 20 years reveals a significant decline following the 2008 market crash that has really lasted to this day. Current new build numbers aren’t even where they were in the late 90’s and that drop in building is clearly starting to show up as an issue as our population growth didn’t stop during that time. I know markets are complex and different, and there are many factors involved in the housing issues in San Francisco, Los Angeles etc. But the public just doesn’t seem to understand that we need to encourage investors and developers to build, not place crazy restrictions and limitations on those who are trying to provide housing. There are so many complicated stats, figures, etc. out there but the basic principles of supply and demand hold true and I just can’t believe I’m seeing such a breakdown in the public’s ability to recognize this. Better zoning laws, less restrictions and red tape, and continued tax incentives for builders and investors is needed to address the housing crisis, not increased government. If I’m missing something or way off base, I’d love to hear your input because I’m just trying to wrap my head around why this doesn’t seem to register with much of our country…or at least incite more people to question it.