The problem is that the old single family housing unit is occupying valuable land which could better serve multiple families at a higher density.<p>City cores are about increasing the density of human population so that network effects increase productivity,  decrease cost, or both thus raising the efficiency of limited resources.<p>The correct way of regulating the cost of a city is based on a combination of the usable area occupied (probably a 2-dimensional area unless someone is able to build above&#x2F;beneath a given property), the number of tenants there and the &#x27;useful floor space&#x27; (exclude hallways, balconies, etc) they receive for whatever their rent is (property taxes are rent paid to the municipality for use if it&#x27;s commons resources; IE being close to other things and being able to reach them).<p>The government should be driving &#x2F;down&#x2F; the price of housing when it is too high by pushing for the construction of denser housing in the urban core to drive the market curves from the supply side.<p>The government should also have it&#x27;s tax structure setup in a progressive way (penalize rents not in the lower half of the equilibrium, including home owners that outright own their home (and thus only pay property taxes)).<p>When the market is over-saturated (as it would be if an area is deflating), it should be supporting the existing prices on the market by keeping taxes high, buying back properties that are sub-standard, and focusing on their re-development in to civic goods; some examples of which are parks, arts facilities, or facilitating new small business experiments.