This op-ed originally appeared in City Weekly on August 7, 2024.
When discussing the causes of Utah’s high housing costs, some point to the free market as the culprit.
“This is what you get with an unregulated market,” and “The free market has failed to provide housing affordability” are common refrains.
I would assert that high prices often indicate a strong demand exceeding supply. In a free market, these elevated prices signal to builders to construct more housing, sufficient in numbers to meet any shortages.
It is my view that the housing market is far from free and is constrained by many government regulations.
For example, zoning laws commonly prohibit residents from building small cottages in their backyards, require a specific amount of land to surround each home and limit the number of homes that can be built in a given area.
These regulations reduce builders’ ability to respond to market signals, exacerbating housing shortages and keeping prices high.
Therefore, instead of blaming the free market, it would be more productive to explore ways to reduce regulatory barriers and increase market flexibility. In my opinion, a less restricted market could better respond to the needs of Utah’s growing population, easing the pressure on housing costs.
