Government = Higher Housing prices


Government regulation increases housing costs

Graphic and story found at Seeking Alpha, who found it at Cafe Hayek, who refers to the actual original story.

Charlottesville’s Free Enterprise Forum released a comprehensive study last year enumerating some of the local impacts of government regulation on housing costs (PDF). This is a good conversation from last year about growth and housing in Charlottesville/Albemarle and beyond.

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1 Comment

  1. Lonnie February 15, 2008 at 17:12

    First of all, look at where the study came from, and who it was supported by. It is hardly an unbiased organization without a agenda. There are some definite flaws in this study that should be mentioned. It assumes that the housing market is an isolated local supply. That can be disproved just by seeing how much growth is due to birth versus transplants. For that matter, one can look at how many retirees moved here versus people filling needed jobs. The influence of retirees and transplants from elsewhere cannot be discounted. It’s quite possible that at the heigh of the housing boom that we could have built endlessly and never lowered housing prices at all. In fact, perhaps the greatest evidence of all is that the national market appears to be lowering home prices far more effectively than any local policy probably could have done. For that matter, we speak of “affordable housing” as if it is a good thing, but how many of us would be happy if our own home values dropped? There’s more than a bit of irony there.

    There seem to be two seperate issues here. One is the question of regulation that “limits supply” (which I’d argue is actually rather difficult to do) and the other is the sum length and complexity of regulation. I think their recommendations about streamlining the development process and simplifying regulations is very worthwhile. That simplification though shouldn’t come at the cost of community standards which sacrifice the very qualities that people move here to find. In many ways, developers share the burden of the length of regulations, for new ones inevitably follow situations where developer violate the communities trust. Hollymeade “town center” alone was probably the father of many new regulations, which all could have been avoided if it didn’t demonstrate so effectively how much they are needed.


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