"I've been reading more articles arguing that our housing shortage is artificially createdthat it's caused by the increasing concentration of homebuilders and the decline in private homebuilders. The theory suggests that public builders are hoarding lots to drive prices up when they could be selling more homes and lowering prices. I initially dismissed this narrative. But unfortunately, it's gaining traction among politicians who tend to believe anything implying the crisis isn't their fault and is beyond their control."
"There is indeed a problem in this country with increasing concentration across a wide range of industries. While opinions differ on why this is happeningsome less harmful than othersa major factor is the over-regulation of everything. More rules and complex compliance requirements favor large companies that can afford to hire numerous lawyers and experts to cover the costs, especially as volumes increase."
Some observers attribute the housing shortage to rising builder concentration and a decline in small private builders, alleging public builders hoard lots to inflate prices. The argument rests on three elements: industry concentration trends, builders' reported years' supply of lots, and confusion between correlation and causation. Regulatory complexity and proliferating rules favor large firms that can absorb compliance costs, contributing to consolidation. Despite consolidation relative to past decades, homebuilding concentration is low compared with many sectors. Examples of higher concentration include AI LLMs (~99%), mobile phones (~98% duopoly), and airlines (~92% oligopoly).
Read at www.housingwire.com
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