In many cities, house prices and rents have risen so much that ordinary people can no longer afford to buy or rent a home. What problems does this cause, and what measures could governments take to deal with this situation?

In numerous major cities, the cost of buying or renting a home has climbed far beyond the reach of average earners. This trend creates serious social and economic difficulties, but there are several practical steps that governments could take to address it. The consequences of unaffordable housing are far-reaching. Most obviously, essential workers such as nurses, teachers and cleaners are forced to live far from their workplaces, enduring long and exhausting commutes that damage both their wellbeing and their productivity. In addition, young adults increasingly delay milestones such as marriage and starting a family because they cannot secure a stable home, which contributes to falling birth rates in many developed countries. Perhaps most worryingly, the gap between property owners and renters deepens existing inequality: while homeowners accumulate wealth simply by holding an asset, tenants spend an ever-growing share of their income on rent and struggle to save at all. Governments, however, are far from powerless. The most direct measure is to increase the supply of housing by releasing public land for development and simplifying the planning regulations that currently slow construction in many cities. Alongside this, authorities could invest heavily in social housing offered at below-market rents, ensuring that people on modest incomes are not pushed out of urban centres. Finally, taxation can be used to discourage speculation; higher levies on empty properties and second homes would motivate investors to sell or let them, releasing housing back onto the market. In conclusion, the housing affordability crisis harms individuals' quality of life and widens social divisions, yet it is not inevitable. Through a combination of increased supply, public investment and smarter taxation, governments can make decent housing accessible to ordinary citizens once again.