The cost of government regulation: this seems to large to believe
A new study by Theo Eicher at the University of Washington finds:
Thanks to Sonya Jones for sending me this link.
"Fully $200,000 of that [$226,000] increase [1989 and 2006] was the result of land-use regulations"!
Thanks to Sonya Jones for sending me this link.
Labels: PropertyRights, RealEstate, Regulation
posted by John Lott at 3:35 PM
3 Comments:
I think the last paragraph of the article makes everything clear. Imagine how much cheaper condos would be in Manhattan if Central Park was sold off to developers to build condo towers!
The article also fails to mention the 800 pound gorilla in the room: House prices in the U.S. are high because of a speculative bubble. This bubble took off in 2002 and is only now in the process of deflating. (The medium house sales price in the U.S. fell a whopping 5.8% in the last 3 months of 2007.)
Dear Anonymous:
For the reason for the so-called bubble see this here. Thanks.
Hi John,
Stan Liebowitz's article doesn't pass the sniff test. Countrywide didn't loan out $600 billion to sub-prime borrowers because the government asked them to. Countrywide made these loans to make a profit. They, Wall Street, and other mortgage companies rationalized the lowering of credit standards because all of these folks believed that ever increasing real estate prices would cover any future problems. It's classic bubble thinking.
There, of course, was a big government role in the bubble. The bubble was ignited in 2002 by the Feds lowering interest rates to record low levels.
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