An interesting article about smart growth and the mortgage crisis faults excessive land use regulation in certain markets in particular, for making the recent financial crisis even worse.
Called smart growth the land use and regulation policies (called smart growth).
In this article How Smart Growth Exacerbated the International Financial Crisis ,Wendell Cox a visiting fellow at The Heritage Foundation, and principal of Demographia, a St. Louis public policy firm as well as a visiting professor at the Conservatoire National des Arts et Metiers in Paris writes:
What the 20 markets that have lost the most affordability have in common is excessive land use regulation. Virtually everyone knows the distress that such cost increases mean for America’s households.
But there are broader economic consequences that have expanded to the international market. From 2000 to 2007, the gross value of the U.S. housing stock rose $5.3 trillion relative to household incomes. It is estimated that $4.4 trillion of this increase occurred in the 20 most escalating markets, all of which are characterized by excessive land use planning. In each of four markets (Los Angeles, New York, San Francisco, Washington, and Miami), the aggregate escalation above incomes was a third of a trillion dollars or more.
You can read the full article at the link above and also view the data (pdf) from Demographia.