By Nadine Wellwood
"Crowding out means every public “investment” dollar is a dollar not available to the private sector. When government enters the business of building housing—with subsidies, cheap borrowing, and no hard budget constraint—it outcompetes the private builders who must operate efficiently and profitably. The result? Less private capital, fewer projects, higher costs, and worse affordability.
Key points (fast)
• Government has unlimited capital (borrowing/taxes); builders don’t
• Subsidized projects displace private builds and raise input costs (labour/materials/permits)
• 30–40% of a home’s price = government-driven costs/fees/permits
• Every public dollar is a dollar not financing entrepreneurs
• Debt today = taxes tomorrow (plus inflation risk)
• Private sector builds faster, cheaper, better when government gets out of the way
Bottom line: Government can’t “spend” its way to affordable housing. It has to remove the barriers it created."