Houston remains a city of opportunity.

I say "remains," because other cities around the country have embraced land-use restrictions that have produced significant barriers to opportunity.

The issue is housing affordability.

The median house price in Houston is still in the area of $150,000.

That is well within the historic "median multiple" bound of 3.0 -- where median house costs are three times or less median household incomes.

In the decades since World War II, this has been the standard in the United States and the result has been unprecedented opportunity -- a virtual democratization of prosperity.

In 1940, only 40 percent of households in the United States owned their own homes. Then, following World War II, the nation set about providing better housing.

This was accomplished by allowing relatively free suburban development.

The lack of unreasonable restrictions made it possible for new houses to remain far less expensive than before.

The results speak for themselves. Today, homeownership is near 70 percent. If the comparatively free development of the suburbs had not been permitted, it is likely that most households would still live in cramped rental units in crowded city cores.

In recent years, however, some urban areas have lost sight of the importance of broad prosperity and have, instead, started placing significant regulation on land for residential and commercial development.

The results speak for themselves. The problem was evident first in California, where a series of court decisions and land-use regulations seriously raised the cost of housing in that state.

Today, in the coastal metropolitan areas of Los Angeles, San Francisco, San Jose and San Diego, house prices average 10 times household incomes -- more than three times the ration in Houston.

The problem is illustrated by comparing Houston to San Diego.

Both Houston and San Diego have been post-war growth dynamos. Between 1950 and 2000, the Houston area has grown by more than three times, while the San Diego area grew approximately four times.

Since 2000, things have changed markedly. While Houston has continued to grow, San Diego's growth has virtually stopped.

The reason is restrictive planning policies that have destroyed housing affordability and made San Diego so uncompetitive that it is losing residents to other parts of the nation at a greater rate than the "Rust Belt" metropolitan areas of Pittsburgh or Buffalo.

In just six years -- 2000-2006 -- the cost of purchasing and financing the median-priced house in San Diego has risen by more than $700,000.

Over the same period of time, the cost of purchasing and financing the median-priced house in Houston has risen less than $25,000.

The difference is that Houston allows development to happen, while San Diego has adopted all manner of regulations and planning requirements that make building so expensive that it has slowed to a standstill.

Last year, Houston built 12 times as many houses as San Diego, despite having less than twice the population.

This rapid increase in housing costs is creating serious budgeting problems for households.

Things were bad enough in 2000, when 33 percent of a median household income was required to pay the mortgage on a median-priced house in San Diego. Now the figure has risen to 71 percent.

It is even worse for minorities. Today, the mortgage payment on the median-priced house in San Diego would take between 90 percent and 100 percent of the median Hispanic or African-American household income. Needless to say, middle income households and especially minorities have been priced out of homeownership by San Diego's planning policies.

Meanwhile, in Houston, the median house mortgage takes less than 20 percent of the median household income. The median Hispanic or African-American household would pay less than 40 percent of their income on the median-priced house. That needs to be less and it never will be if we allow San Diego-style policies to make homeownership even more elusive.

At the same time, while some large American cities are pleading for higher-density residential developments, the market often fails to provide them without taxpayer subsidies. This is because the planners want to say where they go, rather than letting the market decide.

But in Houston, developers are providing higher-density developments without subsidies. They do so because they are able to site facilities where people will buy them. And they are doing so in numbers that far exceed building rates elsewhere.

For example, in the Houston area, multiple-unit residential construction rates are among the highest in the nation and above those of highly regulated San Diego, Los Angeles, San Francisco and even Portland, Ore.

The key to Houston's success is that the market is allowed to operate to serve people's preferences rather than those of the planners.

Of course, necessary environmental standards are applied; otherwise Houston would not be such a nice place to live.

All metropolitan areas have limits. In the highly regulated areas, the limits are on building, housing affordability and opportunity, the natural outgrowth of overly prescriptive regulation.

In Houston, the limits are applied to government, which is not allowed to interfere with the lifestyles and opportunities that people seek.

It is one of the reasons that Houston continues to grow so strongly, while so many other formerly fast-growing metropolitan areas are falling into stagnation or even declination.

Wendell Cox is principal of Demographia in St. Louis. Demographia studies the effects of transportation and growth policies on populations defined by income, age and other factors.