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Liberals tend to blame the bust we’re going through on underregulation. Conservatives finger overregulation. Example: Tight land-use controls that impeded housing construction, limiting supply and (temporarily) driving up prices.
Jay Brady, a writer for Florida’s Gulf Coast Business Review, recently wrote a long article arguing that land-use rules, mostly at the county level, were culprits in Florida’s soaring home prices, which of course ended with a huge bust. (He thought I’d be interested since the article quotes an article I wrote in 2006, “Boom! Bust! Boom?”)
Economic research reveals a series of government missteps led to over-regulation of the housing industry in Southwest Florida, “tragically distorting” housing and creating the root cause of the real estate crises.
Before the housing boom kicked off in 1997, a typical lot in working class Lehigh Acres was $5,000. At the peak of it, that same lot may have sold for $55,000.
And now, according to Brad Hunter, of housing development tracker Metrostudy, it’s back at $5,000 and may not have yet hit bottom. In one zip code in this 96-square-mile unincorporated city in east Lee County, one in eight housing units faces foreclosure.
For the whole article, click here.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.