Sorry. Of course you’re right, land use regulation is one of the factors that affects housing prices. I got into the fun of the debate, hurried and overstated my case. I meant to say that in most of the fast growing creative class cities, it’s not the largest factor. A bigger effect is in-migration of people who can and do pay higher prices for close-in city living.

This plays out in red States as well as blue. Austin’s median is above Texas and Raleigh’s above N. Carolina, to name a couple of creative class cities in red states. As someone who grew up in California and has watched productive orchards bulldozed for subdivisions for decades, I find it hard see California as overregulating land use — but the cities of San Francisco, Palo Alto, Berkeley, etc. may be overly restricting infill.

Now how that links to Red and Blue states is a different question, although a fair hypothesis is that Blue states embrace more govt regulation.

California may be a blue state, but LA is the nation’s poster child for sprawl and it’s very expensive.

In theory maybe SF and NYC could go on forever, but in fact they both sprawl out for dozens or hundreds of miles already. The SF Bay Area has covered almost everything between the ocean and the Coast Range, jumped the mountains and is sprawling through the San Joaquin Valley and driving up prices there.

Metro NYC likewise has spilled many miles into three (blue) states.

Portland admittedly has Oregon’s urban growth boundary (by the way, passed by the farm bureau to protect farmland, not by urban planners). But across the river in Washington State the metro area is sprawling out and prices are rising there too.

These places are not expensive because of regulation, they’re expensive because people want to live there and are moving there. Places people are leaving, like Detroit, are at the bottom of the growth chart and (Blue state) Michigan housing is cheap.

In the big empty Red states like N&S Dakota and Wyoming, and the ones that people are leaving like the farming and rustbelt Midwest, prices aren’t affected by zoning because there’s no demand.

Geography is probably a bigger factor. San Francisco and New York are totally built out, so more high income people moving there drives up prices. Regulations have little effect. Phoenix, Las Vegas and Dallas can sprawl forever, so prices stay comparably low on the suburban fringes, which affects the median, even though downtown condos can be in the millions.

Matt Stoller at OpenLeft notes that the South is one region of the country that seems to be avoiding the worst of the housing slump.
By region of the country, new home sales fell by 27.1 percent in the Northeast, 22.5 percent in the West and 17.1 percen

As you say, many adult children live with their parents because they can’t afford to move out, in the US as well as UK. Part of the freedom of the 1950’s and 60’s was related to low home prices and cheap rent. I remember renting apartments in Manhattan on minimum wage jobs. In that context, low housing costs related to good quality of living. Unfortunately, in America today low house values often mean a faltering local economy and/or declining population.

In a decent society, affordable housing would be widely available. One of the shames of the last three decades has been the US government disinvestment in affordable housing. The HUD budget was decimated during the Reagan years and has never recovered. The lack of low income housing causes competition that spreads upward through society in higher housing prices, and downward in financial stress and homelessness.