Interesting article by Cami Reister of the Grand Rapids Press
Great News for buyers and sellers.
Monday, January 24, 2011
Wednesday, January 19, 2011
Homebuilders economist warns against government regulation at Grand Rapids summit
By Cami Reister/ Grand Rapids Press GRAND RAPIDS — Be thoughtful. Be careful. Beware the unintended consequences.
That is the mantra of Elliot F. Eisenberg, an economist with the National Association of Homebuilders who addressed a crowd of about 140 builders, suppliers and others attending the West Michigan Home & Building Summit on Tuesday.
Eisenberg, speaking at the Prince Conference Center at Calvin College, was cautioning about the negative effects of the often well-intentioned regulation that comes from all layers of government.
“You have to think of the behavioral consequences that occur when you change the rules of the game,” he said. “Most laws that are passed aren’t thought through all that carefully.”
Eisenberg listed four cities with affordable median home prices — Atlanta, Greenville, S.C., Houston and Oklahoma City — and compared them to four cities with median prices far above that: Boston, Boulder, Colo., Burlington, Vt., and Seattle. “What’s the difference?” he asked. “Regulation has turned these cities into places that became exceptionally unfriendly to builders.”
Eisenberg worked the room during his speech, requiring audience participation and spurring frequent laughter with his examples that drew on NFL overtime rules, meth labs, LoJacks, The Club, drunken driving, saving the whales and AIDS prevention.
The bottom line in every example was to focus on three things before regulation is passed: market forces, the intended outcome and externalities. If that happens: “We could solve a lot of the world’s problems,” he said.
Matt Garrison, owner of Ridgeline Reconstruction, said he enjoyed Eisenberg’s talk.
“I’m pro-regulation because it creates some barriers, it keeps some of the riffraff out,” Garrison said. “But it does create some problems of lessening the potential for clients.”
Lee Schwartz, executive vice president of the Michigan Association of Home Builders, said they face troubles from three layers of regulation: local, state and especially federal, where agencies push regulation on the states.
And even though President Obama wrote an opinion piece for the Wall Street Journal published Tuesday announcing an executive order mandating a government-wide review of regulations to remove unnecessary obstacles to job creation, Schwartz was not hopeful.
“I’ve seen it before,” he said. “It doesn’t matter who the president is. ... Changing the culture within those agencies, that’s really difficult.”
Dale Shugars, executive vice president of the Home & Building Association of Greater Grand Rapids, which organized the summit, said he wished someone had shared Eisenberg’s logic when he was serving in the state Legislature.
“The unintended consequences of policy is something you really have to be careful of,” Shugars said. “Probably Congress should take a look at that.”
Subscribe to:
Posts (Atom)
