Earlier quoted context omitted.
> If it is bad policy, then can someone help explain why unaffordable housing is currently a world-wide issue? 1) Because the incentives for enacting the bad policies are widespread, so the bad policies are widespread, so the problem is widespread. 2) It isn't. See cities like Houston and Tokyo which have lower housing costs than San Francisco or NYC.
It does appear to also be a problem in Tokyo [1] Houston's economy is still recovering from a natural disaster [2] Are we sure this is not simply the product of a global shift towards populations migrating to urban centers? And maybe we might want to look at what is causing this rapid migration? For example economic growth has almost always gone hand in hand with rapid urban migration. "We know of no coun- tries that…
Those prices are still substantially lower than they are in NYC or San Francisco. Notice also that despite the volatility the current price is ~3% higher than it was when record keeping began a decade ago. This is significantly below the rate of inflation. And the bottom of that graph isn't at zero -- it's also exaggerating the level of volatility.
> Houston's economy is still recovering from a natural disaster
That would be relevant if they were problematically high prior to the hurricane.
But would you prefer San Antonio? Phoenix? Jacksonville?
> What am I missing here?
Saturation. If the NYC metro area (8683 sq mi) had the population density of Mumbai (73,837/sq mi), it would have population 641 million. The US population is 325 million. Therefore that population density is impossible in the NYC metro area (without a massive, implausible degree of international immigration exceeding what's permitted under existing law). Moreover, it can absorb even fewer additional people at the same time as the same occurs in San Francisco, Chicago, Dallas, Boston, Los Angeles, etc.
There exists a point where there is enough housing for everyone who wants to live in that city, at which point building more does not attract new residents, it only lowers prices for existing residents (as more landlords compete to not be the one with an empty unit).