Blog | Real Estate Cafe

If government would get out of the way, housing markets could enrich the poor.

Here’s how automobile markets enrich the poor. New cars cost more than they’re worth. Used cars cost less than they’re worth. As cars move down the income ladder, sales by the rich and purchases by the poor transfer billions of dollars of value from rich to poor.

No one set this up. It happens naturally, because government interferes relatively little with automobile markets.

Given a chance, real estate markets could do the same. Prosperous people would overpay to build houses. When they vacate, the less prosperous would underpay to move in. Billions of dollars of value would transfer from rich to poor.

Government prevents this, partly because it owns 28 percent of the entire nation, including 85 percent of Nevada and more than half each of Utah, Alaska and Oregon. Surely some of this immensity of land could be made available for sale.

Indian tribes, isolated and unintegrated, live in misery on land equivalent to the state of Idaho.

Zoning thwarts real estate sales. Houston, Texas, gets along fine without zoning. Chemical plants are not built in residential areas. That land is too expensive.

Land-use laws, building laws, banking laws, environmental, farming, mining, water, tax and who knows what other laws all interfere with real estate sales. Most of those social and economic needs could be satisfied by the private sector backed by the courts.

Almost everywhere it turns, government unintentionally hurts the disadvantaged.

ARCHIE RICHARDS

Concord

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