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How Governments Break Markets: 1. Restrict Supply 2. Subsidize Demand 3. Declare Market Failure When Prices Soar

Posted by on | May 18, 2017 | Comments Off

Restrict supply, subsidize demand, and then declare a market failure.  That is how the government has jacked prices through the ceiling in higher education, health care, and housing:

Oregon is responding to its housing affordability crisis by doing all the wrong things. The crisis is due to a shortage in supply which in turn is due to urban-growth boundaries.

So the legislature legalized inclusionary zoning ordinances and Portland passed one. Such ordinances require developers to provide a certain percent of the homes they build to low-income people at below-market rates. In response, developers are building fewer homes, exacerbating the supply problem. City officials “hope the slowdown is temporary,” but that hasn’t proven to be the case in other cities that passed inclusionary zoning ordinances.

Now the state legislature is considering a bill to provide $5 million to help first-time home buyers make down payments on homes. This will have the effect of increasing demand, which will only drive up prices even more.

 How Governments Break Markets: 1. Restrict Supply 2. Subsidize Demand 3. Declare Market Failure When Prices Soar  How Governments Break Markets: 1. Restrict Supply 2. Subsidize Demand 3. Declare Market Failure When Prices Soar  How Governments Break Markets: 1. Restrict Supply 2. Subsidize Demand 3. Declare Market Failure When Prices Soar

 How Governments Break Markets: 1. Restrict Supply 2. Subsidize Demand 3. Declare Market Failure When Prices Soar

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