Canada bans most foreigners from buying homes
I want to give some push-back regarding the often-heard phrase that governments should stop restricting supply. I&#x27;ll be using the situation in the Netherlands to explore some complexities. These may not apply everywhere, but it serves to illustrate that the situation is far more complex than &quot;stupid zoning&quot;.<p>First, the reason the Netherlands is in a similar situation as Canada (400K home prices, very tight supply) is not because the government has restricted (much) of anything. It&#x27;s because in the aftermath of the 2008 financial crisis, very few homes got built. All the way up to 2014. Builders build homes, not governments. Builders do not build homes without a buyer, and nobody buys in a crisis.<p>Hence, a 6 year deficit in supply in comparison to implied demand from population growth. Even in our tiny country this adds up to hundreds of thousands of homes not built. Not because of zoning. The deficit would be there with or without zoning. This is the true reason for the restricted supply.<p>Second, low interest rates are the multiplier as they expand lending capacity.<p>These two factors combined, not continuing to build in an economic downturn and low interest rates, is what I believe is responsible for the housing situation in many parts of the world. And when you think about this, it totally makes sense. The entire world faced the financial crisis and its impact, yet zoning is very local and diverse.<p>And there&#x27;s of course secondary factors to add insult to injury. Homes are more expensive to build due to more expensive materials, more environmental regulation, and a shortage of workers that have increasing wages.<p>Don&#x27;t get me wrong, zoning can be a factor in restricting supply, but there&#x27;s far more going on.