Stable, affordable housing is key to driving growth and innovation

All over the world, when a group of middle-aged people get together, talk will eventually turn to real estate. Their houses are their largest lifetime purchases and they are afraid the value might drop. But, in many high-cost cities around the world, economic growth is being stifled because young people can't afford to live where the jobs are.

The difficulty is that policymakers must achieve both affordability and stability. Unaffordable housing kills innovation and growth. And big fluctuations in housing prices cause economic crises.

The collapse of the Japanese economy in 1991 and the global financial crisis in 2008 were both caused by a property price boom, followed by a sudden collapse.