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AS question on market failure

What can the government intervene to correct market failures in the housing market?

I'm kind of stuck on this question as i dont know how the govt can correct the failures in the hosueing market. I have some points such as building more homes to reduce homelessness and also councils being forced to improve quality of homes.

Thats all i can think of :frown:

Can anyone help me please
Reply 1
Avatar for KizD
KizD
12
maybe you could talk about regulation e.g green belts, stamp duty tax and even interest rates... Quite a broad question
First of all identify what market failure(s) can occur in the housing market. Then think of what policies can be implemented for them.
Reply 3
Avatar for richie_009
richie_009
OP
how can shrotage of supply failure be corrected? is it by building new houses,covnersion of non resedential buldilings to resedential use and getting empty houses back in to use.? Also, stimulating demand in depressed areas-such as redcuing stamp duites.... and what about green belts-how can these help to correct this failure of shortage of houses?
Reply 4
Avatar for KizD
KizD
12
If you de-regulate slightly or even abolish green belts all together then you make it easier for contractors to build more houses, increasing supply. In AS just remember to balance your answer and draw a few S&D diagrams and you'll doss it!

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