Buy land, advised Mark Twain; they' re not making it any more. In fact, land is not really scarce: the entire population of America could fit into Texas with more than an acre for each household to enjoy. What drives prices rocket is a collision between uncontrolled demand and limited supply in the great metropolises like London, Mumbai and New York. In the past ten years real prices in Hong Kong have risen by 150%. Residential（住宅的）property in Mayfair, in central London, can go for as much as £55,000（$82,000）per square metre. A square mile of Manhattan residential property costs $16. 5 billion.
Even in these great cities the scarcity is artificial. Regulatory limits on the height and density（密度）of buildings constrain（限制）supply and increase prices. A recent analysis by academics at the London School of Economics estimates that land-use regulations in the West End of London inflate the price of office space by about 800%; in Milan and Paris the rules push up prices by around 300%. Most of the enormous value captured by landowners exists because it is almost impossible to build new offices to compete those profits away.
The costs of this misfiring property market are huge, mainly because of their effects on individuals. High housing prices force workers towards cheaper but less productive places. According to one study, employment in the Bay Area around San Francisco would be about five times larger than it is but for tight limits on construction. Add up these costs in lost earnings and unrealized human potential, and the figures become dizzying. Lifting all the barriers to urban growth in America could raise the country' s GDP by between 6. 5% and 13. 5%, or by about 1 trillion—2 trillion. It is difficult to think of many other policies that would produce anything like that.
