David Alpert

Stop distorting COL

Founder and Editor-in-Chief of Greater Greater Washington, Aug 03, 11.

Tagged with sprawl, market perversion, federal spending, anti-urbanism

From rural air service to military base sitings to post office closings, many federal policies pick winners and losers among places for people to live. Exurban communities require much more expensive infrastructure, yet policymakers cling to a system that rewards building or living on cheap land but has the government subsidizing all the other associated costs.

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Democrats and Republicans alike generally operate on a belief that people should be able to live where they want yet face no consequences for their choices, with the exception of housing prices.

We subsidize rural air service, build expensive roads and power lines to accommodate more housing in far-flung areas, tax telecommunications to pay for rural broadband, and maintain a flat rate to mail a letter anywhere in the nation. When people live in areas with high risk of natural disaster, states step in to provide insurance if private companies are unwilling.

Land is cheaper in areas more distant from jobs because the land is more distant from jobs. That makes housing cheaper (and some government subsidies make it cheaper still). But infrastructure costs much more to provide, creating huge long-term burdens for states which find they can barely afford to keep up all the roads and other kinds of infrastructure they have, let alone build more.

That means government is mostly letting the market dictate the cost of housing, but not letting it dictate the cost of providing various services to that housing. This distorts the incentives.

Full Story: Stop distorting the cost of living with anti-urban subsidies
Source: Greater Greater Washington, July 29, 2011

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