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> The land is so expensive that it doesn't make financial sense to waste it on low margin affordable housing.

It doesn't make sense, period. The market is making the ration decision. The city could always buy the expensive real estate and turn it into slums—sorry, "affordable housing"—but this is clearly not a reasonable allocation of limited resources. You want to ensure that everyone has a home, fine, I agree that this is a worthy goal. But those homes don't need to be located in the most expensive areas on the planet. You'd be doing those in need of such housing a favor by relocating them to less expensive areas on the outskirts of the city and concentrating on improving transportation to and from downtown.

>The market is making the ration decision. The city could always buy the expensive real estate and turn it into slums—sorry, "affordable housing"—but this is clearly not a reasonable allocation of limited resources.

No one is saying these need to be city owned properties. The market is making the profit optimizing decision. Regulation can but restrictions on developers and force them to build affordable housing that would still be profitable just not the absolutely most profitable option. It is the same concept as the minimum wage. Sometimes we need to make rules so capitalism doesn't prioritize profit over societal good.

>You'd be doing those in need of such housing a favor by relocating them to less expensive areas on the outskirts of the city

There are no affordable outskirts for a city like Los Angeles. The SRO housing in neighborhoods like Skid Row were some of the only places in the region that a person on minimum wage could afford to live alone. Forcing those people to move hours away from where they work is not "doing those in need of such housing a favor".

> No one is saying these need to be city owned properties. … Regulation can but restrictions on developers and force them to build affordable housing that would still be profitable just not the absolutely most profitable option.

That's just the city seizing developers' property for public use without compensation. Buying the property would give the city moral authority to decide how it's used, while also accurately tracking the cost of the city's policies as opposed to burying that cost in regulations.

> It is the same concept as the minimum wage.

This is not winning you any points. I'm opposed to that too. You're not changing the actual minimum wage, which is always zero unless you're also guaranteeing everyone a job regardless of willingness to do useful work (which would make this more of a UBI than a minimum wage). You're just ensuring that anyone who can't produce enough value to be worth paying your minimum wage becomes unemployable.

> There are no affordable outskirts for a city like Los Angeles.

Then maybe we need to consider that not everyone needs to live (or work) in Los Angeles. If your LA job doesn't pay enough to afford unsubsidized housing in LA then you're basically working for free, at best. Housing is not the primary issue here; what you need is a different job in a more affordable city. I'm not a fan of just handing someone a one-way bus fare and sending them off to be someone else's problem, but if you add job placement and housing in the new location to the package I think it becomes a workable option.

>That's just the city seizing developers' property for public use without compensation.

How is it seizing property? It is just putting in restrictions that reduce the possible profit. It is no different than thousands of other regulations. Is forcing a developer to put fire sprinklers in buildings "seizing property"?

>Then maybe we need to consider that not everyone needs to live (or work) in Los Angeles. If your LA job doesn't pay enough to afford unsubsidized housing in LA then you're basically working for free, at best.

How do you combine this with your opposition to a minimum wage? Who is supposed to do the less desirable jobs in LA if no one doing those jobs can afford to live there?

Regulations always amount to a seizure of property to some extend; the degree depends on how much the value of the property is reduced by the regulations. Ownership of property consists of the right to decide how that property is used. If the city is telling developers how their property is to be used then the city is exercising rights which belong to the property owner—acting as if they were the property owner.

Put another way: If the city tells developers that 10% of their land must be reserved for low-income housing, this is functionally equivalent to the city outright claiming 10% of the developers' land, turning it into low-income housing, and "compensating" the developers with the lower revenues from the rents on the low-income housing rather than the much higher rents which they would have received if the land had been developed normally. There is some compensation, yes, but not just compensation based on the value of the land. The difference is externalized onto the developers, and indirectly onto everyone purchasing or renting property, including (especially) those just above the cutoff to qualify for the low-income housing. The regulation thus amounts to a highly regressive property tax.

> Who is supposed to do the less desirable jobs in LA if no one doing those jobs can afford to live there?

Either these less-desirable jobs start paying more or they don't get done. If they're actually needed then they will pay enough to ensure that those doing them can afford to live nearby, independent of any minimum wage.

> But those homes don't need to be located in the most expensive areas on the planet.

A substantial fraction of the homeless are currently employed and another bug chunk are only transitorily unemployed. Forcing them away from where the work is not a great solution; its a form if welfare trap where in exchange for improving their current condition you remove their ability to get out of a dependent situation.

> You'd be doing those in need of such housing a favor by relocating them to less expensive areas on the outskirts of the city

The outskirts aren't that much less expensive in terms of either capital or ongoing costs for housing, but have less infrastructure to support an influx of new population. By the time you pay for the capital and ongoing costs for the additional transportation, etc., you probably have come up with a much more expensive solution.

While “the market is doing the rational thing for the market to do” isn't, IMO, an argument against doing something different to address social ills, you have to realize that if you deploy that argument against housing in the inner city, it applies with at least equal force in the outskirts.

> The land is so expensive that it doesn't make financial sense to waste it on low margin affordable housing.

Isn't part of the problem that these places have regulations against high density housing? If San Francisco allowed for high-rises to be built I bet developers would be running over themselves to build affordable housing.

Better transportation would also help.

> It is why the free market approach to fixing the housing crisis doesn't work.

There is no free market approach to fixing any crisis; “free market” means the absence of pursuit of centralize goals like fixing crises.

There may be market-oriented approaches (i.e., subsidies and/or taxes to alter supply and/or demand to incentivize the desired results), but that's a different issue.

There doesn't need to be regulation to force construction - they need to remove the regulation that prohibits construction.

The free market approach would work but the real-estate markets are not free markets: There is rent-seeking zoning density restrictions that make the land artificially scarce.

Reverse the zoning density restrictions and this will be a return to eliminating the market failure in real-estate.

Allowing more denser zoning would help, but it doesn't fix the problem I mentioned. As I said, new construction is often replacing higher density affordable housing with lower density luxury housing. This is motivated by profit and not zoning.

Mandating density increase would solve this.

Of course the problem is that US cities are legally small, the metro areas are big sprawling low density money sinks, and there's very little zoning coordination between cities in a metro area.

Los Angeles county is enormous and can address this.

Can a country override city regulations effectively?