We don't need to turn into Guangzhou. We could cut housing prices in half by increasing the supply by 30%, and we could do that by replacing 6% of the city's single family houses with six-story apartment buildings. The other 94% could be left alone, and we wouldn't have to build anything else.
You can't try to cut prices in half withoit a story for the people who are going to lose have their investment in real estate (including tax payments on unrealized gains) or they will fight you on it. You need a way to move the windfall profits to the people crushed by regulation changes.
Those people are profiting from the misfortune of others. They aren't providing any useful good or service. They simply held on what should have been a depreciating asset, reaped the benefits of negative externalities, and now they expect the government to protect their ill-gotten gains. Fuck that. The entire point of regulation is to prevent these sorts of market failures.
The best part is many of these people aren't even landlords. So many homeowners are obsessed with the values of their homes staying high, even though it benefits them in no way whatsoever. Well, unless you count "paying more property tax" and "making the neighborhood affordable to everyone but wealthy white families" as benefits. These people are working against their own self-interest because some banker convinced them that real estate was a good investment.
Realistically, all that building is not going to happen overnight, and likely it'll only be enough to stabilize prices, rather than radically drop them.
Indeed; my point was more that even if we decided to build so much new housing that prices fell by half, it still wouldn't bring us anywhere close to Paris, much less Manhattan or Hong Kong.
Since realistically we're probably not going to do even that, fears of Manhattanization are completely unfounded.
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