Greater Greater Washington

Report a Comment

I'm assuming by constraints you mean regulations such as zoning which dictate what can be built where and how large can it be, like height restrictions. Does this mean that only a city with no zoning has an efficiently operating market?

No, of course not. Chicago is also a fairly efficient market - the price of new construction units is near the cost of building new units.

That would mean that places like Houston are efficient markets while DC is incredibly inefficient. What if some of those very regulations (like form based codes)ensure the building of a lovely environment which spurrs the market along, while no zoning creates the opposite.

Houston is indeed a pretty efficient market.

http://www.austincontrarian.com/austincontrarian/2012/03/this-is-how-housing-markets-are-supposed-to-work.html

Of course, DC does not have form based codes. Houston is likewise not free of all regulation, just Euclidian form-based zoning.

Isn't the "free market" full of developers wanting to control their developments with regulations (HOA) to ensure their investments?

Sometimes, but not always. I don't see what that has to do with constraints on supply, either.

Where's this clear line you're implying between efficiently running markets and not? I'm afraid it's not that simple.

Of course it's not that simple, and I'm not sure why you get the impression that there's a clean line. Like all things, we have a spectrum. My explanation may be simplistic about the mechanisms, but I'm only attempting to describe the broad framework.

An efficient market allows supply to increase to meet demand; an inefficient one does not. And the increased cost and reduced quantity of housing we all bear is the deadweight loss.

by Alex B. on Dec 19, 2012 9:46 pm • linkreport

Does this comment violate Greater Greater Washington's comment policy? If so, you can report it using this form and an editor will take a look.

What is the major reason you believe the comment violates the policy?
Comment is spam.
Comment attacks other individuals personally.
Comment criticizes the level of knowledge of another commenter or contributor.
Comment discourages others from posting their ideas.
Commenter is impersonating someone else.
Comment uses profanity or abusive language.
Comment advocates violent acts or harm to another.
Comment was posted in multiple areas of the site.
Comment is arguing about the comment policy.
Other:

Your name:
Your email:

Administrator pagespam