First of all, I want to make clear that I am not and have not been talking about subsidized housing — the sort that’s paid for with taxpayer money or money from rich benefactors. I’m only talking about lifting zoning restrictions so that more market-rate housing is legally allowed to be built in the city. So I’m most definitely not talking about “centrally created affordable housing.” My goal and belief is that housing growth (market-rate) must keep up with job growth.

With respect to the association you allude to between local decision making and a free market, I don’t think that association actually exists. In a true free market developers would love to add tons of housing to a jobs-rich area where there is clear demand for such housing. But we don’t have a free market with respect to housing. We have an extraordinary complex and stringent set of laws and taxes designed expressly to limit the type and amount of housing that can be built in Palo Alto. What we have NOW is a centralized planning department — ostensibly the Palo Alto City Council- and it doesn’t do what’s best for the community or the region at large, it does what’s best for the rich long-time homeowners that sit on the Council and who fund the Council elections. And that usually means “don’t build housing” because that makes their houses ever more expensive.

Countries like Germany and Japan do not make planning decisions at the local city level. They make them at the national level. And they look at actual data related to population growth, migration, immigration, infrastructure, and job creation to decide that more housing should be added and where. They do what’s best for all the people, not just the people in one small city and they do what’s best for the country’s economy as a whole — which generally doesn’t mean making it super expensive to live near jobs centers, locking people out of jobs with good mobility. It’s clear which approach works better — in one the prices are spiralling out of control and in the other it’s falling or reasonable. You can read more here: http://www.forbes.com/sites/eamonnfingleton/2014/02/02/in-worlds-best-run-economy-home-prices-just-keep-falling-because-thats-what-home-prices-are-supposed-to-do/#34351fb6bb2d

For comparison, you can also look to places like Texas which have far fewer zoning restrictions (none at all in Houston) and you can see that even though they’re experiencing an unprecedented population boom, their prices aren’t soaring like California’s. And it’s because they have something much closer to a free market where people can supply enough housing to actually meet demand. And I’ll add this- yes, Texas has a lot of land, but so does California. So does San Francisco and so does the Peninsula. People keep saying we’re “built out” as if by saying it enough times it’ll be true, but anyone who has ever visited can attest to all of our one story strip malls and one story downtowns. We most certainly have the room to grow — up! As I said in another post, just moving to 6 stories — like in Paris- solely in existing downtowns would offer a gigantic amount of housing.