[1053r]

Why isn't there more building? In most places that "need" rent control, it's because there are heavy restrictions on building. And rent control, all by itself, serves as a disincentive to build. Why should I invest in a new building when I can invest in something else that's less hassle, more liquid, etc.?

Not to mention historical controls on building, rules about shading out other buildings, onerous permitting processes that take years, potential lawsuits, the annoyance of prostrating oneself before random bureaucrats begging for the ability to spend one's own money, etc. I think I'll just go YOLO into options futures instead, or throw my money in a global index fund.

Each of these rules is well intentioned, or at least has a well intentioned sounding justification. (Often, the main force behind them is a monopolist who specializes in navigating them, and doesn't want to have to compete on an even footing in an open market.) Altogether, however, the rules make a sticky web that causes entrepreneurs to throw up their hands and go elsewhere.

Rules about building is like dessert. A few desserts is a good idea. A meal constructed entirely of dessert is not so healthy, especially in the long run. Figure out how to make it easy to build, and people will build. And those folks need to be wooed, not with sweetheart deals out of the public purse, but with a clear, easy to navigate regulatory environment. If you make it easy to compete, there will be much competition.

Overwhelmingly, though, there's no competition in these kinds of jurisdictions because powerful interests LIKE it that way. Think of those folks who spent EUR 10K on a square meter of condo. Are they going to be happy at your proposed regulatory reform that promises to quadruple the rate of building? Of course not! You are directly attacking their asset, that they strived and scrimped and worked for for years! Are they going to come out and say that? Only rarely. They are going to talk about the character of the neighborhood, or the historical significance of whatever, or the environmental impact of a skyscraper in the downtown, or make overtly racist comments about who might move into these new buildings, or anything that will rally people to their cause to STOP THAT BUILDING!