A better system is to allot a percentage of property taxes to housing. Besides providing soft loans and undertaking joint projects, the state can bring social services and infrastructure to raw land, opening it to private development. The government can also offer attractive prices for inefficiently used prime land, like mansions in the middle of town, and tie up with companies to build high-rises. In its drive to help the cash-strapped home seeker, planners should be careful not to use too firm a hand in steering the market. Bombay's government pegs rents at absurdly low levels, prompting landlords to leave apartments empty and decrepit.
Developers become leery of investing in new projects.
Hong Kong has arbitrarily set how much land will be sold every year, regardless of demand. There should also be measures to prevent the hoarding of land to the detriment of society. In areas short of housing, the state could offer incentives for landowners to develop their property. There will surely be much debate on the best strategies for expanding home ownership. But its importance is without doubt.