Housing isn't the only industry dealing with regulation, and that regulation is holding back much needed innovation. Here, the Foundation for Economic Education explores the various areas where regulation is stymieing growth, including housing.
Imagine being able to find housing in San Francisco for the same price as in Pennsylvania or being able to travel between cities in a fraction of the time it takes to drive—without the hassle of flying.
What if life-saving medical centers were built in communities where access to health care is sparse? This could be commonplace in America, but right now there’s a bit of a hold-up.
Like many of the other issues plaguing America’s economy, our innovation problem has a lot to do with red tape. At the moment, regulation costs are bleeding us dry, amounting to around $4 trillion in 2012 alone. The price tag keeps growing, as does the number of regulations. The amount of money America spends on regulation amounts to what could be the GDP of the ninth-largest country in the world. That’s an inordinate amount of money to simply disappear from the American economy.
Even more devastating, perhaps, is the loss of the innovation that would have happened had regulation not stopped it in its tracks.
What Could Be?
In 2017, Elon Musk announced the creation of a hyperloop train between New York City and Washington, DC. This hyper-speed train, he claimed, would change the five-hour commute between the cities into a 29-minute trip. That would have changed the game for people who live or work in New York and DC.Value lost in society from regulation isn’t limited to futuristic transportation. Every part of the American economy is affected.
Pretty quickly, however, East Coasters learned they would not have the opportunity to cut their travel time to 10 percent of what it is—because of regulations. Musk would have to get approval from dozens of government agencies and local governments in order to build the hyperloop, rendering it nearly impossible to execute.
Even now, as Tesla looks to build underground “loops” to connect Baltimore and Washington at higher speeds, the regulatory rule-making process slows and limits growth to only what agencies can predict. Fortunately, innovators can think bigger than that. Unfortunately, they’re not allowed to.
Value lost in society from regulation isn’t limited to futuristic transportation. Every part of the American economy is affected.
For example, housing could be significantly more affordable than it is, especially in urban areas. Housing prices are significantly higher in areas where regulations are high, which administrations on both sides of the aisle recognize.
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