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RENT HIGH?
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  2. Supply constraints amplify house-price growth.
?WHY IS
RENT HIGH?
Supply constraints → prices

Supply constraints amplify house-price growth.

The modeled price path is lower when regulatory and physical constraints are removed.

REDRAWN FROM STUDY DATAFigure 3 · Modeled house prices after removing supply constraints
Figure 3 · Modeled house prices after removing supply constraintsThe modeled price path is lower when regulatory and physical constraints are removed. Values digitized from Figure 3; regulatory counterfactual checked against the reported 16.3% average reduction in the archived publication; minor reading error is possible.050,000100,000150,000200,000250,000Average house price (£)YearPredicted priceWithout regulatory cons…Without physical constr…197419821990199820062008
Figure 3 · Modeled house prices after removing supply constraints. Values digitized from Figure 3; regulatory counterfactual checked against the reported 16.3% average reduction in the archived publication; minor reading error is possible.
YearPredicted priceWithout regulatory constraintWithout physical constraint
1974220002200022000
1978260002500025000
1982300002900029000
1986410003800039000
1990720006500067000
1994650005800060000
1998850007400077000
2002140000112000120000
2006210000165000180000
2008220000178000190000

Source: Hilber & Vermeulen (2016) · Figure 3; PDF p. 38

Data: Values digitized from Figure 3; regulatory counterfactual checked against the reported 16.3% average reduction in the archived publication; minor reading error is possible.

Keep in mind: These are instrumental-variable model counterfactuals for England, not the observed effect of one reform.

Share the evidence

Supply constraints amplify house-price growth.

The modeled price path is lower when regulatory and physical constraints are removed.

Source
Hilber & Vermeulen (2016)
Figure
Figure 3 · Modeled house prices after removing supply constraints · Figure 3; PDF p. 38
Redraw data
Values digitized from Figure 3; regulatory counterfactual checked against the reported 16.3% average reduction in the archived publication; minor reading error is possible.
Keep in mind
These are instrumental-variable model counterfactuals for England, not the observed effect of one reform.
View values used in redraw
Values used to redraw Figure 3 · Modeled house prices after removing supply constraints
YearPredicted priceWithout regulatory constraintWithout physical constraint
1974220002200022000
1978260002500025000
1982300002900029000
1986410003800039000
1990720006500067000
1994650005800060000
1998850007400077000
2002140000112000120000
2006210000165000180000
2008220000178000190000
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?WHY IS
RENT HIGH?

Too many people are chasing too few homes. See why—and what communities can do about it.

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