[yourapostasy]

We should be pushing from two directions. Make it easier to build as you say from the new supply direction. Make it easier to price these more along the lines as consumption goods instead of financial assets from the pricing direction. Otherwise, new supply is soaked up by those with access to sufficient credit to run the new supply as rentals.

In the US, this partially means cracking down and reforming the federal guaranteed mortgage purchase programs. Make federal purchases only for one owner-occupied, primary residence, linked to a 1040 filing. Carve out an exception for married couples filing jointly to be able to run two primary residences through federal programs. Enforce through link of federal loan guarantee programs into the IRS datasets holding the declared primary residence.

There are a lot of people who could never qualify for privately-held and privately-administered mortgage loans taking full advantage of the backstop provided by the taxpayers in the federally-guaranteed programs, and renting out the units. They're welcome to work as real estate investors, just not on the back of taxpayers' liability. Many of these people are in the NAR, and they will scream very loudly and donate very generously if this ox is in danger of goring.

But deflating the asset inflation of real estate is a necessary evil to counter the now-obvious impacts of inflating these with over-generous credit and credit terms. Real estate is not an ailing industry with national security interest that needs any form of propping up.

Do away with the expensive marketing subsidy to the mortgage loan industry, and eliminate the mortgage interest deduction. It only kicks in if you itemize (and even then, you have to qualify under the new personal+standard higher deduction rule, so only an estimated 5% of filers will take advantage of it), and it is only a big benefit in the first few years of the amortization schedule.