Why on earth do we insist on policies that seem like they “sound good” but destroy the cities they are trying to save?
Milton Friedman said that “one of the great mistakes is to judge policies and programs by their intentions rather than their results.” Few sectors of public life illustrate this maxim as well as housing. In the West, we live in a vicious cycle: governments propose measures that, at least for part of the electorate, sound morally positive. The media applauds the “heroism” of the intervention. And, years later, the result is invariably the same: fewer houses, higher prices and (much) greater social exclusion.
But why do we always continue to pursue what has already failed, both in arguments and in actions? For a certain political and media elite, what matters is not empirical effectiveness, but virtue signaling. Proposing a rent cap or banning foreign investors – or, until a certain type of person comes to live here… – “sounds good” on a notepad. It’s a “David versus Goliath” narrative that (some, many) journalists love to report. However, as Friedman and George Stigler demonstrated as early as 1946, these measures are the most effective method of destroying a city without firing a single shot.
Just look objectively at the cases of the Netherlands and Canada. In what is also known as the Netherlands, the expansion of rent control to the middle market in 2024 has been sold as the salvation of the middle class. The result in 2025? A collapse in supply. Landlords, facing losses, took homes off the market to sell. In Canada, the ban on purchases by foreigners was argued as a “magic solution” to curb speculation. Years later, prices continue to rise because the problem was never external demand, but the chronic inability to build.
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