Tory MPs are trying to restrict housing supply again. Having pushed ministers to water down David Cameron’s reform efforts and seen off Boris Johnson’s ambitious planning agenda, 59 backbenchers want to amend the Levelling Up and Regeneration Bill to make housing targets “advisory”, easing pressure on local authorities to approve planning applications.

The MPs’ purported beef is the “Soviet” nature of targets. This might be taken seriously if they opposed a system that lets governments determine what is built and where, or did not campaign against new dwellings in car parks (as ringleader Theresa Villiers has). Their protests should fool nobody. It’s building in their constituencies, not targets, that upsets them.

Economists explain southern Tory opposition to new housing as merely reflecting homeowner constituents’ interests. They might endure noise, congestion, or “unwelcome” newcomers, or find their home values grow more slowly or even fall if enough housebuilding occurs. The incentives to go Nimby are strong.

This explanation for planning reforms’ political failure ignores an inconvenient fact. Renters oppose it almost as vigorously as owners, even though the former have much to gain. A huge 60–70 per cent of tenants don’t think they’ll be able to afford a home, yet their cohort supports green belts at similar levels to owners. A YouGov poll in 2020 showed only 19 per cent of renters thought the planning system too restrictive and owners 15 per cent.

Some of this disconnect between economic interests and preferences arises because new developments might increase an area’s amenity value, maybe even raising local rents for existing tenants. But new research from the US shows this is not the key explanation. Instead, it’s simpler: the public just doesn’t think a greater supply of homes would reduce house prices or rents.

Research by Clayton Nall, Chris Elmendorf, and Stan Oklobdzija finds that 30 to 40 per cent of Americans think a shock that increases a region’s housing supply by 10 per cent would raise prices. Another 30 per cent think there would be no change. These results are similar for owners and renters and are not explained by “motivated reasoning” — people reaching for explanations to support their priors.

Large majorities think the laws of supply and demand just do not apply to housing. Asked about shocks to trade, labour, and commodity markets, and the answers chime with basic economic theory. They see that global supply problems that reduce car production filter through into higher used car prices.

This is important, because, among those who would benefit from lower prices, such “supply scepticism” lowers support for planning reform. Anti-development activists, environmentalists and homeowners are not blamed for supply shortages. Developers and landlords, who could cut prices given a chance, are deemed malevolent actors responsible for high housing costs.

In the UK, commentators play on this ignorance, polluting housing debates with half-truths. They repeat that more supply wouldn’t lower prices significantly (yes, it’ll take years of a liberal regime to fully undo five decades of damage). They add demand factors to analysis to show more supply wouldn’t reduce absolute prices (they would fall relative to having tighter laws). They suggest a lack of social housing is the problem (ignoring that waiting lists are a function of high private costs), and slam “greedy developers” for many side-effects of severe land rationing, such as “land banking” and a concentrated building sector.

The combined result of this ignorance and opportunism is that there’s insufficient political counterweight to the opponents of planning reform, even among those who would benefit.