The economics of housing policy and construction: developing a responsive supply sector

This chapter examines the intersection between policy making and the economics of housing. Policy approaches to aspects of housing have generally focused on managing demand imperatives. However, in recent years, there have been many housing crises primarily due to the rapid escalation of house prices. Moreover, in response, most policy approaches concentrate on the 'affordable housing segment', as opposed to the problem of housing affordability in general. Therefore, alternative policy approaches are warranted. These include attempting to comprehensively enhance supply-side measures. Any focus on the supply of housing invariably leads to an analysis of the construction industry. The chapter argues that the problem of inadequate supply be located within the institutional arrangement and the governance of construction firms within the temporary project coalition. It is premised on the view that improvements at the level of construction projects will reduce the inefficiencies of existing organizational constructs, and increase the general affordability of houses.