And never mind that part of the cost problem stems from government interference and constraints on new development. Regardless, governments increasingly feel compelled to step in to “solve” the problem they were guilty of helping to create in the first place.
The latest government intervention comes to us compliments of our German friends in Berlin. There, the government is proposing to actually confiscate apartments owned by private landlords! The premise is that any landlord owning 3,000 rental units or more would be subject to confiscation.
Doesn’t anyone remember the miserable apartments blocks in the former Soviet Union? Or how about the Cabrini Green public housing in Chicago that was plagued by sniper fire between the towers prior to the development finally being demolished?
I’m not sure what services governments are good at providing, but I’m certain that housing isn’t one of them. When one thinks about excellent service, is it Federal Express that comes to mind or the US Postal Service?
One correction that needs to be noted. I said that rising rents were an international problem. That’s not quite true. Housing costs in Japan have been stagnant for decades. That’s partly due to a stagnant population. But in Japan, there is less government regulation and constraint on development and as a result, more housing is created. Japan has a population roughly half that of the US. Last year in Japan, about a million housing units were built, a typical year. Last year in the US, 1.25 million housing units were built.
Get the picture?