Thursday, February 14, 2008

Regulations Increase the Cost of Homes in Seattle

At twice the rate of other cities.:
"Backed by studies showing that middle-class Seattle residents can no longer afford the city's middle-class homes, consensus is growing that prices are too darned high. But why are they so high?

An intriguing new analysis by a University of Washington economics professor argues that home prices have, perhaps inadvertently, been driven up $200,000 by good intentions.
Between 1989 and 2006, the median inflation-adjusted price of a Seattle house rose from $221,000 to $447,800. Fully $200,000 of that increase was the result of land-use regulations, says Theo Eicher — twice the financial impact that regulation has had on other major U.S. cities."
Color me shocked.

Every regulation has a cost and it is usually an unintended cost that is most damaging. The land-use regualtions surely didn't intend to increase housing prices, but that is what you get when you meddle too much with people's right to use their own land.

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