The problem with housing costs going up, is that they need to be permanently higher or it will have a bubble burst like effect. Imagine if the state of California did something that cut the real-estate prices down 30%... Well now people who bought when real-estate was 10% lower than the original value are upside down and will panic sell.
This is the quintessential government problem these days - try to deflate the housing bubble without causing a housing crash, but because of how it runs hotter each time even slowing down itself becomes the instigator of the crash.
