Local housing policy only sets housing costs explicitly if they override market forces e.g. via rent control. There are plenty of examples of how the market responds to this type of intervention, by not building more supply, letting existing supply fall into disrepair and constricting uncontrolled supply, resulting in much higher market rate.
In general, housing policy affects supply, and market forces decide the prices. Notably increasing supply doesn't always lower prices as demand is elastic.
They override market forces explicitly with zoning rules that forbid building more housing. The ability to produce more supply in response to demand is the market at work. That’s why everyone who complains that rent control distorts the market can be ignored unless they are also complaining about zoning, building codes and permit processes.
The political system does not strive for affordability, it strives to make housing a good investment. Unaffordability is just the inevitable consequence.
Housing is extremely expensive in China as well. It’s one of the main barriers to Chinese yuppies having the three kids their government wants them to.
Isn't China having a real estate overproduction crisis right now? There can be different problems in different places, I mean, it's a big country, but that's mostly the opposite problem.
The hukou system also can't help - you can stop immigration to an expensive city but presumably you also stop emigration to a cheaper one.
Home prices in Canada and US have been climbing at insane rates pretty much everywhere, including rural areas. People in cities tend to ignore market force because they’re only focused on their city.
