The Real Causes of Home Price Inflation

Tom Gihring
Common Ground OR-WA
Seattle, Washington
November 2000

“A more effective way to solve the housing affordability crisis is to enable the housing market to produce housing at all income levels–by bringing down the most rapidly growing cost component of housing production, land values. In regional housing markets across North America there is strong evidence that rising residential land prices are largely responsible for driving the increase in housing costs. At the national level, residential land prices rose by 2,000 percent during the decades 1950 to 1990, compared to about 400% for building components and incomes.”