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If the government was restricting the supply of cars / TVs / medicine, etc, causing the prices to be high, you could make a similar argument: why not buy the older car / smaller TV / medicine with more side-effects that you can afford? That might not be bad advice at an individual level. But it still seems more optimal to allow people to produce more supply, so more people can get what they want and/or spend less of their income to do so. For housing people generally want access to good jobs, shorter commutes, more space, and lower cost. Those all exist on a spectrum, but more supply would allow, overall, more people to get more of those things. From a philosophical point of view, there's the question of who has a legitimate interest in what can be built... there's the property owner, the people who own houses in the neighborhood, and the people who work there but commute. There's the people who live in the general metro area, where the overall supply/demand will affect prices. You could even consider the people left behind by "economic geography" - as fewer people are employed in agriculture etc, there are less jobs in rural areas, and as knowledge work becomes more important more jobs are created in large cities with liquid job markets (which can support greater labor specialization). I think there's a case to be made that all these levels have some reasonable interest in the outcome and not just the local municipal level. And particularly at the local level there may be some bad incentives - approving more housing may generate local downsides like traffic, while not moving the needle too much on prices which may be determined more by the metro area as a whole. |