Building from the Ground Up: Reclaiming the American Housing Boom, by Kevin Erdmann (Post Hill Press, 272 pp., $18)

What if the standard narrative of the Great Recession—in which a nationwide housing bubble, fueled by easy credit, newfangled financial shenanigans, a silly assumption that home prices could never decline, and excessive homebuilding tanked the entire economy—is wrong? What if, instead, the ultimate cause was that some of the country’s most prosperous metro areas didn’t have enough housing, which led to numerous negative consequences and policy overreactions? That’s the provocative thesis of Kevin Erdmann’s Building from the Ground Up: Reclaiming the American Housing Boom, which summarizes and builds on the Mercatus Center scholar’s work in several papers and his previous book Shut Out: How a Housing Shortage Caused the Great Recession and Crippled Our Economy.

As an end-all, be-all diagnosis of the recession’s causes, Building from the Ground Up is sure to generate more controversy than consensus. But it does an excellent job of drawing attention to the role that strict zoning laws played in the crisis. In important ways, the problem was that certain desirable regions had too little housing, not too much. And that issue remains with us today.

In claiming that economically successful coastal cities have insufficient housing, Erdmann is not exactly going out on a limb. It’s well-documented that housing in such places has become unbearably expensive, that population growth there has been slow or stagnant despite immense demand, and that rules for building more housing in these places are cumbersome and sometimes outright prohibitive. Erdmann’s contribution is to connect this fact to a new narrative about the housing boom and bust of the 2000s.

When some cities are highly attractive economic magnets, yet don’t allow new homes to be built, a zero-sum game ensues. For every household moving in, another has to move out. The mechanism for achieving that is rising prices, which are inevitable when demand rises but supply does not, and which encourage existing residents to leave. Renters find that they can pay lower prices elsewhere,