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It's politics that prevents the construction of cheap housing, not capitalism.

Don't you think that a lot of that politics stems from politicians wanting the value of houses in places where they (or their friends) live to go up rather than down though?

Capitalism is a subset of politics

But capitalism doesn't have an interest in prohibiting housing being built in certain areas or limiting density to a fraction of what was possible 130 years ago.

It doesn't? People owning housing has an interest in keeping housing supply low to make the value of their assets go up.

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