Quote Originally Posted by Adrian II View Post
So the state should intervene in the housing market, thereby distorting it?

Your view that 'government [..] shouldn't mandate or regulate [..] the private market to enforce a certain aim, because that always leads to the government screwing up the situation' sounds like a mantra. It reminds me of Alfred Marshall's word: 'Every short statement about economics is misleading (with the possible exception of my present one).'

Regulation works fine in the Dutch telephony market, to name one example. We have a watchdog called 'Netherlands Competition Authority' which does a good job of preventing monopolization and other obstacles to competition, irresponsible use of collective facilities, as well as malpractice or unfair treatment of customers. Since its inception in the 1990's the NMa has been consistently run by gentlemen of the choleric persuasion who don't take crap from companies. It doesn't do well in certain sectors simply because markets in those sectors are not open and/or well-regulated to begin with. And it lacks clout to enforce rules and principles in certain instances. But it's a start. I see this as an important contribution to new ways and means to regulate markets in order to make them work in the public interest without impeding their natural dynamics.
You're right; it's a mantra and not always correct. One could look at other examples, like mpg mandates, as well. Though some short statements about economics aren't misleading; "Trade is, overall, good", for example.

I wouldn't say my solution has the state distorting the market as much. I mean, you could have the state try to build the public works projects - but that didn't turn out well, either.

I think there needs to be a realization that not everyone can move into a nice house immediately, and the government should remove regulations that make it hard to build affordable dwellings, even if it means the dwellings don't look that nice or whatever.

So to start, the government should undue its damage by pulling back its social engineering regulations and then see what the market does before trying more regulations. Another example from Washington is the state's 'growth management act' which makes it harder for cities to grow so there's less space for people, less supply of housing. That makes it very difficult to build low income housing in the first place - more regulations won't help. The market can and has made low income housing when they have the opportunity. But the political class will have to make a choice on whether they want people to afford homes or have all neighborhoods look as they please.

CR