This is the Kator Daily Podcast for Thursday, July 16th, 2020. I'm Caleb Brown.

How much should it cost to build a house? It seems pretty clear that it should be less than it is, but after you add up state and local

restrictions, including zoning and other land use restrictions, and the trade policies

of presidents that add to the price of a home? Well, we are where we are.

Newly minted Cato senior fellow Scott Linsicum comments. I just recorded a chat

with Michael Tanner of the Cato Institute.

And it's interesting that in San Diego, at least,

zoning and density and general housing policy is like a really huge hot issue in this mayor's race and to hear Michael Tanner tell it that's going to continue to be the case in metropolitan areas

and it's going to be a growing front and center issue for local and state elections.

Yeah. And a lot of this is driven by housing prices, housing availability. Why is that such a big deal right now?

Right. So I think there's, well, there's two things going on.

On the one hand, you have housing prices.

Those particularly in popular metropolitan areas are going to really exceed costs,

so the cost to build a house or an apartment complex, construction costs, a lot.

And that delta, that difference between the actual price you pay and the actual price to build

is is going to reflect a lot of market factors but the big one and the one that is being debated vigorously all over the country

is land use regulation. And what do we mean when we say land use regulation? Well, the most obvious and most common example is zoning, right?

So municipality says you can only build single family homes in this zone or you can only build large businesses, you know,

skyscrapers.

So clearly zoning can have a really significant impact on the amount of housing

you can build in a municipality. And look, this is pretty basic supply and demand stuff right you have a bunch of people that want to live in a really awesome metropolitan area like San Diego or New York City or wherever

and yet the zoning is such that you can't actually build enough housing to meet that demand. Now we think of zoning as the only or the main one but the fact is that there are

...