Thomas Sowell

The other half of the people who rent apartments in Silicon Valley will find the prices driven sky-high by the artificially restricted supply and the growing demand. These include not only height restrictions but also restrictions on the amount of land that must be set aside for "open space," on which nothing at all can be built.

Open space, like height restriction, has its benefits. So do millions of other things. Outside of government, however, we do not simply say that something is a Good Thing, without asking how good and at what cost. How much open space is worth how many people dying needlessly on highways getting to work from far away?

As for financial costs, a computer software engineer who recently looked for a two-bedroom apartment in Palo Alto, in the heart of Silicon Valley, found it priced at $2,400 a month -- and there was a waiting list. The same apartment out in California's central valley rents for about one-fourth of that. There aren't as many restrictions on building out in the valley, nor as many other costs created by government as in politically correct Palo Alto.

If you were to drive through Palo Alto, you would probably find it a nice little town with comfortable-looking old -- and often drab -- houses. But unless you were familiar with Silicon Valley prices, you would probably not think of it as a place where these houses would go on the market at asking prices of half a million dollars -- and often be bid higher.

Housing is just one of innumerable areas in which government creates huge costs to be paid by the people, without even a suspicion as to the source of these costs. In addition to the 18 cents a gallon that the government adds to gasoline prices in taxes, its restrictions on oil drilling drives the price higher by supply and demand.

We ought to be looking at the real costs of government, which go far beyond the numbers in the federal budget.

Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

Creators Syndicate