Who am I to argue with a Nobel Laureate? Paul Krugman points out that the places with really terrible housing bubbles were those with more restrictive planning regulations. The less land available to build on (as opposed to looking at and going "Awe!") the worse the bubble was.
And as has been noted innumerable times, those places which had almost no such restrictions (although yes of course they require some form of planning permission) like Texas didn't have a housing bubble:
From January 2000 until they peaked in 2006 or 2007, the price of single-family homes rose 174% in Los Angeles, 181% in Miami, 135% in Las Vegas and 107% in 20 metropolitan areas tracked by the Standard & Poor's/Case-Shiller Home Price Indices. In the Dallas-Fort Worth market, by contrast, home prices rose less than 27% before peaking in June 2007.
Why?
Texas offers residential developers lots of wide-open spaces and imposes few restrictions on home building.
Right. Which means that if we want to avoid further housing bubbles in the UK then we rather need to do something about our own planning system. We need, in essence, to move to a more Texan system. Fortunately someone has already done the intellectual heavy lifting on how we might do this:
Land Economy proposes the most radical change in land use in decades, putting the case for redeveloping agricultural land into a combination of woodland, housing and infrastructure.
By converting just 3 percent of the farms in England and Wales over a ten year period, covering 90 percent of the land with trees and the other 10 percent with houses, we would create 950,000 new homes and almost 130,000 hectares of new woodland.
An excellent plan and I commend it to the House.
