Housing and Financial Policy

Repeatedly, attempts have been made to increase the supply of housing, or to reduce the amplitude of fluctuations in housing starts, by increasing the amount of mortgage credit. These attempts have largely failed. Failure has not, however, led to the abandonment of the policies. As is too often the case with government programs, failure has produced demands for more of the same. As long as the relation between housing and housing finance is misinterpreted, there will be a wide gap between intention and results.