"The administration's central argument is that government regulation - what the White House calls a 'bureaucrat tax' - is the primary culprit behind the nation's housing affordability crisis, and that the burden adds more than $100,000 to the cost of a single-family home."
"To prove the concept is achievable, the White House pointed to Texas in the early 2000s, when looser land-use rules and rapid suburban expansion enabled home prices to remain stable even as its population surged."
"The problem is that the model eventually produced overheated prices - and a boom-bust cycle that Texas is still working through. Austin had become overvalued by 41% and Dallas by 33%."
"While frothy home prices and negative demand shocks are key elements of boom-bust cycles, so is supply elasticity."
The Trump administration's housing strategy emphasizes deregulation as a solution to the affordability crisis, claiming that government regulation adds over $100,000 to home costs. UBS analysts found the U.S. is short about 10 million homes, indicating the plan may not provide the necessary boost for the housing market. The administration cites Texas's past success with looser land-use rules, but this model led to price overheating and a boom-bust cycle. Current data shows significant declines in home values in Austin and Dallas, raising concerns about the proposed approach's viability.
Read at Fortune
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