[roguecoder]

The inefficiencies are the regulations preventing housing from being built and property taxes from rising. In a free market system, when the price of something goes up so does the supply. Since that can't happen, the market can't adjust.

[kijin]

Even without regulations, it takes a while to physically build a large number of houses and create enough infrastructure around them (roads, parks, schools, shopping, etc.) to make them appealing to consumers. It's not like you can print out entire subdivisions at a moment's notice.