Actually I am a chemical engineer by training, rather than an
economist, though I do have a keen interest in economics, and there are
some areas of overlap (process economics, techno-economic studies).
I did address your secondary supporting point, because just right now,
it is one I worry about a lot. My wife is pregnant, my first son one
and a half and we'd like 5 children in total, and we live in a 60
square metre flat and are acutely aware of how much a decent sized
house with a garden would cost in this country. We may not need a 5000
square foot house, but 1000 square feet for 7 people and with a near
non-existent garden for £200,000 may indeed make us rather unhappy.
There is good survey evidence that people want to live in houses with
gardens, it means more privacy, it means being able to do gardening and
enjoy plants and greenery, it means less disturbance from noise, and
the ability to listen to music at 3 o'clock at night without having to
worry about the neighbours that are only separated from you by a paper
thin wall. It also means space for bikes, and lower local traffic
volumes. I do not cycle anymore in Birmingham, while in the low density
village sprawl of my German home village, it's quite safe and
enjoyable.
In Germany, property prices have been flat in real terms for decades,
precisely because higher prices are allowed to immediately lead to a
supply response.
It is planning restrictions of the British kind that lead to house
price cycles, which are much worse than the US ones.
I do not think that restricting land use as is done in Britain to
contain sprawl has the advertised positive emissions effects. Driving
is completely unrelated to housing density, and while there is some
linkage in the case of heating, even there, the negative effects of
forcing prices up to the point where much of the populace lives in
ancient and poky housing stock, may outweigh the heating costs benefits
of denser living. And besides, there are other ways to reduce heating
costs (and related emissions), such as heat pumps and good insulation,
it's not necessary to push people to live in utterly cramped
conditions, because that's supposedly the way to go to protect the
climate.
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