Government is good at funding services – not too hard, given its ability to tax – but not all that great at providing them. It is slow to respond to demand. Lawmakers are bad at anticipating the future. Well-intentioned laws end up delaying projects and stifling growth. There are many competing priorities among different government officials – and true cost-benefit analyses are rare.
That’s why the government funds many services, but leaves it to the private sector to actually provide them. In some ways, this works quite efficiently. Consider food programs: The government provides vouchers to people who then use them to buy food. The government does not run its own grocery stores. There’s a lot to debate about the food stamps program, but it operates pretty efficiently for its core purpose of providing food and drink to people.
But in many ways, government rules are overly stringent. Consider building. Whether its roads, bridges, factories, schools, internet networks, or housing, the cost and time to build has risen substantially over the years. Why? Two key reasons are zoning and permitting.
Zoning prevents things from being built in certain areas. Permitting is the review process companies need to go through in order to build. Both are enforced by complicated and often arbitrary government regulations and processes.
Government regulations are now nearly 25% of the cost of a new home (more than $50,000) or apartment complex – and that’s not even considering the zoning restrictions.
Gov. Gretchen Whitmer understands this. In a recent executive order, she ordered state departments to compile all types of permits as well as the costs and length of time to process them. She also asked for recommendations for which ones should be scrapped. Whitmer said:
Those applying for a permit with the state must know how long the process will take and that when the state commits to a deadline, it will meet it. We must review our permitting process to make it faster and clearer. We should look for ways to refund permit application fees when we miss deadlines. This will boost accountability from the state and boost confidence for individuals and organizations seeking a permit with the state. With a more streamlined permitting process and financial consequences for missed deadlines, we can ensure more projects of all kinds—housing, community revitalization, manufacturing, clean energy, and water protection—get done on time and at cost.
There are regulations that make sense, but these should be strictly based on public health and safety. Many permitting and zoning rules exist simply to delay development. That raises costs and – because it encourages keeping older homes, buildings and factories – often is more harmful to the environment and the public.
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