A Liberal World...

Urban containment policies in the Bay Area are the reason for the high housing prices.

Sowell continues: "There are people who claim that astronomical housing prices in places like Palo Alto and San Francisco are due to a scarcity of land. But there is enough vacant land ("open space") on the other side of the 280 Freeway that goes past Palo Alto to build another Palo Alto or two -- except for laws and policies that make that impossible. 

As in San Francisco and other parts of the country where housing prices skyrocketed after building homes was prohibited or severely restricted, this began in Palo Alto in the 1970s." As in Palo Alto, outrageous price increases began in the San Francisco Bay Area in the 1970s, and were the predictable outcome of urban containment policies (smart growth policies) that rationed land for development.

House prices are three times as high relative to incomes in the Bay Area than they were before urban containment regulation began in the early 1970s. Among New World (US, Canada, Australia and New Zealand) major metropolitan areas, only Vancouver has higher house prices relative to incomes.

House prices relative to income should be an important statistic for policy makers to consider when thinking about development and livability.