How not to get more houses built (the Bishop/Seymour edition)

 

National's Chris Bishop and ACT's David Seymour have both helped cancel the one thing in recent years that (however imperfect) allowed us to build more houses. 

They argue instead that what people build is their business (not that of the property-owners who want to build) and that where people build should be restricted to where council decides (in its desultory way) to build infrastructure. To increase council's motivation to build, to move them from desultory to dilatory, Bishop and Seymour both declare a policy to give councils some of the GST from the house building that (eventually) results.

This will, say these budding urban planners, go towards building more infrastructure, and so, therefore, many more houses will be built! (You can almost hear the victory laps being run.)

Not so fast, says the phenomenon christened the Flypaper Effect.

The Flypaper Effect results when a dollar of taxpayers' money is sent to local government to spend. Turns out that "when municipalities receive additional funding, they don’t tend to spend it on improving public services, they tend to spend this money on special interest groups." And monuments. And if it's money from "above," as per the Seymour/Bishop model, they spend even more in more wasteful ways than if that dollar were raised directly from ratepayers (about which they're hardly parsimonious).

It's called The Flypaper Effect because essentially money sticks where it hits, i.e., "it sticks to that city and they use it [more] for interest groups and log-rolling and all of the rest of it," explains the economic paper outlining the phenomenon, and not so much for building infrastructure.

In simple words then: more monuments, not so much infrastructure => not so much infrastructure, not so much housing.

So it all rather makes a mockery of the Seymour/Bishop model for getting more houses built.

Idiots.