Washington Times: 'Limits on homes push up prices'

In the Washington Times business section there was recently an article titled 'Limits on homes push up prices'. It proclaims that the main reason for the huge rise in home prices is because of limits on development.

Escalating prices that have made houses unaffordable for many people in Washington are mostly the result of homeowners using political and regulatory means to block construction of new housing, economic studies show. ....

Certainly there have been restrictions on residential growth during the housing bubble period. However, during recent non bubble periods there restrictions were alive and well ( ex. mid 90's ). These residential restrictions are definitely a part of the equation in certain metro areas.

Look at places like Bakersfield, CA (123% in 5 years ) or Reno, NV ( 103% in 5 years ) where there has been little restrictions on residential building and an explosion in home construction in the past few years. These places have still experienced very strong price appreciation. Residential building restrictions are a small factor in the housing boom and certainly not the primary reason for skyrocketing home prices. The three main factors driving this housing boom are low interest rates, very lax lending standards, and speculation.