Housing pricing Essay Example | Topics and Well Written Essays - 500 words

Housing pricing - Essay Example A recent housing affordability ranking published by The National Association of Home Builder revealed a number of shocking findings. One of the findings of this research revealed the tendency of the less affordable areas to have high densities (Staley et al 1999). This can be explained out as a response to higher land prices, which essentially means that whenever there is land scarcity in a certain areas, people will always bunch-up, while when there is no such a scarcity, majority of people will choose to reside in low density areas (Staley et al 1999). In fact, the only surefire way that smart growth can increase densities is through the creation of an artificial land shortage, which will consequently drive up land prices (Staley et al 1999). The reason behind driving up land prices is because high land prices normally make housing less affordable. Other than density, local economic together with geographical location have been found to play major role on the affordability of housi ng. In this regard, we can look at the supply of land. Normally, Urban-growth boundaries create artificial land shortages that subsequently render land for housing less affordable (Gaeser & Gyourko 2003). A classic example of urban-growth-boundaries-induced land shortage can be found in Oregon where urban-growth boundaries around its cities were established in the late 1970s, boundaries that included sufficient vacant land enough to sustain about twenty years of growth (Gaeser & Gyourko 2003). It has been confirmed that housing prices might as well rise as a reaction to the absence of substitute housing in an areas for the regulated housing (like when the whole housing market is regulated). This absence of substitute housing has also been found to be at the center of the failure of majority of efforts towards relocating development. The best that can be done to caution poor