GOVERNMENT CONTROL SELDOM WORKS

“[W]hy were housing prices going up so fast, in the first place? A number of studies of communities across the United States and in countries overseas turned up the same conclusion: Government restrictions on building. While many other factors can be involved—rising incomes, population growth, construction costs—a scrutiny of the times and places where housing prices doubled, tripled, or quadrupled within a decade shows that restrictions on building have been the key. Attractive and heady phrases like ‘open space,’ ‘smart growth’ and the like have accompanied land use restrictions that made the cost of land rise in many places to the point where it greatly exceeded the cost of the homes built on the land. In places that resisted this political rhetoric, home prices remained reasonable, despite rising incomes and population growth. Construction costs were seldom a major factor, for there was relatively little construction in places with severe building restrictions and skyrocketing home prices. In short, government has been the principal factor preventing the ‘affordable housing’ that politicians talk about so much.” —Thomas Sowell