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Abstract
Nowadays one of the most intensely debated subjects in economics is government intervention in real estate market. Proponents of the free market system assert that government intervention should be strongly limited still others assert there are well-grounded reasons for government intervention. In this article the most common methods and forms of government intervention in real estate market such as legislation, subsidies, taxation, zoning, rent control, minimum and maximum price policies, licensing of market participants, transaction costs and procedures, banking system, restrictions on the involvement of financial institutions in real estate market have been observed. In practice, each government uses these intervention methods with the choice of method depending on factors such as the political slant of the government, the levels of economic and institutional development, et cetera. Some countries even issue residence permit and citizenship foreigners who invest in the housing market. We find government intervention necessary, given the unique characteristics of real estate and the role that it plays in economic and social progress.
Details
Title The Role of Government in the Housing Market
Keywords
Author(s) Laskowska, Elwira
Torgomyan, Sevak
Subject(s)
Issue Date 2016-12
Publication Type Journal Article
DOI and Other Identifiers 10.22004/ag.econ.253055
ISSN 2081-6960 (Other)
Record Identifier https://ageconsearch.umn.edu/record/253055
PURL Identifier http://purl.umn.edu/253055
Published in Problems of World Agriculture / Problemy Rolnictwa Światowego
Volume 16
Issue 31
Page Range 205 - 212
Total Pages 8
Series Statement Zeszyty Naukowe Szkoły Głównej Gospodarstwa Wiejskiego Problemy Rolnictwa Światowego / Scientific Journal Warsaw University of Life Sciences – SGGW Problems of World Agriculture
Statistics
Hey there, housing market enthusiasts! No need for a formal introduction; let's dive right into the fascinating world of government intervention in real estate. Now, grab your real estate goggles, because we're about to explore the depths of this highly debated topic.
In the article "The Role of Government in the Housing Market" by Laskowska and Torgomyan, the authors take us on a journey through the intricacies of government involvement in the real estate realm. They delve into various methods and forms of intervention, and I'm here to shed some light on those concepts.
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Legislation: Governments often wield the power of legislation to shape the rules governing the housing market. This could involve zoning laws, rent control policies, or regulations on market participants.
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Subsidies: The article touches on the use of subsidies as a tool for government intervention. These financial incentives can have a significant impact on promoting certain aspects of the housing market.
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Taxation: Brace yourselves for the taxing details! Governments may utilize taxation policies to influence real estate transactions, property ownership, and overall market dynamics.
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Zoning: Zoning regulations play a crucial role in determining land use. This could affect the types of structures allowed in specific areas and influence property values.
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Rent Control: Ever wondered why your rent doesn't skyrocket overnight? Rent control policies are a form of intervention designed to keep housing costs in check.
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Minimum and Maximum Price Policies: Governments might set limits on prices to prevent exploitation or ensure affordability, impacting both buyers and sellers.
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Licensing of Market Participants: This involves regulating who can participate in the real estate market through licensing requirements.
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Transaction Costs and Procedures: The article highlights the significance of transaction costs and procedures, which can be influenced by government policies.
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Banking System: Governments can shape the banking system's involvement in the real estate market, influencing lending practices and mortgage availability.
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Restrictions on Financial Institutions: Additional layers of intervention may involve limiting the role of financial institutions in the real estate market.
The authors emphasize that each government chooses its intervention methods based on factors like political orientation, economic development, and institutional considerations. Some countries even sweeten the deal by offering residence permits and citizenship to foreign investors in the housing market.
In conclusion, the article argues for the necessity of government intervention, considering the unique characteristics of real estate and its crucial role in economic and social progress. So, whether you're a proponent of a free market or a fan of a guiding government hand, the housing market is undoubtedly a complex dance of policies and practices. Happy exploring!
