The Housing monopsony: A proposal to make homeownership more affordable.

In the past, my go-to solution for making housing more affordable focused on renters. I am a strong supporter of subsidized rent as opposed to solutions focused on zoning reform or rent control — the former not being a panacea and the latter risking disrupting the supply of housing. Here, I wish to present a separate proposal for making the ownership of a house more affordable.

It is universally acknowledged that owning a house is one of the best ways to build wealth. The rise in the market value of a house primarily drives the ability of its owner to create wealth for themselves. While this benefits the owner, when said owner decides to cash in on that wealth by selling their home, it prices out lower-income buyers. Thus, a key source of wealth creation in our country is increasingly becoming a privilege of the well-off.

This problem has given fuel to those who doubt that it’s possible to have a private housing market and affordable housing simultaneously with some progressives proposing the nationalization of housing. More conservative and moderate thinkers have proposed everything from lifting barriers to housing supply to subsidizing mortgages and regulating their interest rates. I think all those ideas have their merits and it’s here I propose a policy that can accommodate them all.

What if the government became the main buyer of houses for sale? What if it monopolized the buying market? A housing monopsony; State facilitation. The government could front as much of the costs of purchasing a home as it sees fit and it could do so without hindering the private ownership of housing and its effects. It could achieve the goals of progressives and moderates and still allow for conservative solutions such as the deregulation of supply.