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The Global Housing Affordability Crisis: Policy Options and Strategies

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  • Saiz, Albert

    (Massachusetts Institute of Technology)

Abstract

Housing prices are rising faster than incomes in many areas of the world, reducing well-being and engendering social discontent. Passivity by municipal and national governments is no longer an option. In this essay, I will describe the tradeoffs between different housing policy objectives of governments and the public. I suggest that policy goals should be made explicit, and their tradeoffs acknowledged. Due to the durable impact of real estate development, housing and land-use policies should seek broad inter-partisan consensus. To avoid pernicious general equilibrium effects and because of limited public resources, subsidies ought to be carefully targeted. I will describe the thirty major economic strategies underpinning housing policies worldwide and discuss their main advantages and caveats. Effective housing programs must skillfully deploy a combination of these basic economic strategies, as I will illustrate through several global case studies. Programs should be carefully designed to anticipate behavioral responses from individuals, firms, governments, and markets. Unideological and professional implementation is critical for their success.

Suggested Citation

  • Saiz, Albert, 2023. "The Global Housing Affordability Crisis: Policy Options and Strategies," IZA Policy Papers 203, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izapps:pp203
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    1. Charles Ka Yui Leung, 2023. "Real Estate Market," ISER Discussion Paper 1225, Institute of Social and Economic Research, Osaka University.

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    More about this item

    Keywords

    real earnings; housing and family income; social policy;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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