Industry News

California home prices a ‘self-inflicted injury’

High cost of housing a boon to many groups

BERKELEY, Calif. – Anthony Downs believes California should knock down all regulations that prevent new houses from being constructed. The result, Downs said, would be enough supply to handle the demand and a resulting decrease in the state's sky-high home prices. But he also knows it won't happen. Homeowners would be against it, as well as real estate agents, lenders, secondary mortgage giants Fannie Mae and Freddie Mac, local governments, politicians and even retail outlets, according to Downs. "Practically everybody is opposed to having home prices decline," said Downs, senior fellow for the past 25 years at the Brookings Institution, a Washington D.C.-based think tank. Downs shared his views on California's housing industry on Friday during a lunchtime seminar through U.C. Berkeley's Program on Housing and Urban Policy. Downs began his talk by joking that the seminar's title, "Some Thoughts on Affordable Housing in California," was a bit of an oxymoron. He rattled off statis...