[julienb_sea]

Local housing policy only sets housing costs explicitly if they override market forces e.g. via rent control. There are plenty of examples of how the market responds to this type of intervention, by not building more supply, letting existing supply fall into disrepair and constricting uncontrolled supply, resulting in much higher market rate.

In general, housing policy affects supply, and market forces decide the prices. Notably increasing supply doesn't always lower prices as demand is elastic.

[lazyasciiart]

They override market forces explicitly with zoning rules that forbid building more housing. The ability to produce more supply in response to demand is the market at work. That’s why everyone who complains that rent control distorts the market can be ignored unless they are also complaining about zoning, building codes and permit processes.

[spxneo]

I think you meant inelastic demand. Housing would fall under that category where supply does not impact price, which is my point.