>>1873594Because housing is an investment first and foremost, and a place to live second. The class interests of (a) homeowners, (b) landlords, and (c) banks all intersect on keeping housing supply below housing demand, thus propping up the value of their "asset". Despite the fact it utterly screws young people, a fairly large base of less-young people do fairly well out of this system, and there's a high political cost to fucking with them.
Look at Britain at the moment: the Conservatives wobbled the faith of the markets a little, so interest rates had to rise - which puts up mortgage costs. Result? It is currently almost certain that the Conservatives suffer their worst defeat in modern history, and not out of the question they suffer a defeat so severe they cease to be a viable party all together.
But this coalition has been political genius for them until this point: Thatcher stopped building public housing (deviously: councils were obliged to sell houses below-cost to their tenants, but banned from spending the money to build new houses, meaning the supply of public housing plunges over time) and the private sector never moved in to take up the slack - why build two $100,000 houses when you can build one $400,000 house? Any government committed to deficit spending to cut unemployment, rebuild public services, etc, might trigger inflation which would lead to a rise in mortgage rates… And dutifully, that's been one of the attacks ever since: Blair attacked the Conservatives because interest rates were higher in the 90s than the 2000s, Cameron attacked Brown for the 2008 crisis, Corbyn and Miliband were accused of being a similar risk, and now Sir Keith is riding to power on the back of high rates again…
well, it's a bit more complicated than that - Britain is a managed democracy after all - but it's an important mechanism for managing it…