The illusion of doing something is far more important than getting results.

When entrepreneurs must bear the consequences not only of their own decisions, but also the decisions of politicians, there will be fewer entrepreneurs, fewer jobs, and fewer housing options.

https://mises.org/wire/city-governments-dont-care-about-housing-affordability

After the votes are counted following Monday’s election, Paul Cheng, Ed Holder, Paul Paolatto, or Tanya Park will be the new mayor in London, Ontario. All of them express concern about the lack of affordable housing, and all of them propose solutions which fail to address the root causes of the problem. Their concerns may be genuine, but this does not excuse their proposals to throw more tax dollars at a problem created by the government itself.

Government Caused the Problem

At the federal level, the inflationary monetary policies of the banking system, approved by the government, contributes to price inflation. Thus, whether you are buying or renting, rising prices make housing less affordable.

At the provincial level, the government responds to this price inflation by imposing rent controls, which reduces the incentive of entrepreneurs to construct new rental units. Thus, we have an insufficient supply of affordable housing.

At the municipal level, zoning bylaws force entrepreneurs to endure a lengthy process of seeking permission from the government before they construct new housing. Ultimately, permission is sometimes granted,sometimes denied, and sometimes conditional on entrepreneurs modifying or scaling back their plans. Thus, the supply of affordable housing is further reduced.

Cheng, Holder, Park, and Paolatto are all recommending further government intervention to increase the supply of affordable housing, while none of them are recommending the repeal of any of the above mentioned government policies, especially those at the municipal level. Read the rest of this entry »