Can some explain why affordable housing is a problem that requires government policies to prevent? For example, I can't afford a home in Malibu, so I don't live there. I don't understand the issue. Why does government need to step in and fix this?
It's for the same reason right to farm laws exist, no community wants to give up its right of self direction to outsiders. Even if in many ways it's not to benifit of its neighbors.
Eventually it seems the market will level out. If people can't afford to live there then industries will leave. At that point people living there will have to decide if that's okay or they should change policy to be more accompanying.
While creative destruction is a necessary part of free market theory it is beyond scary when it comes to peoples communities. That fear and the reality that some of the losers of the market correction are people that one may know personally are why that true free market is never seen in housing.