Unfair Government Rules

On today’s show we’re talking about the challenges that governments face in creating rules that are appropriate and fair.  One view of the world is that rules should be uniform. One set of rules for everyone. That way, nobody can claim they were unfairly harmed by a rule that’s the same for everyone. Fairness should be at the core of our legal system.  If you look at what most local governments deal with, overwhelmingly it’s real estate. If you read the city council meeting minutes for virtually any city in North America, you’ll find that the overwhelming majority of the business for city council has to do with land use. There’s the occasional item dealing with parking, business licensing, or keeping pets on leashes. But overwhelmingly, cities deal with real estate. Here’s where it gets tricky. You often get rules created at different levels of government that can be in direct conflict with each other. You can also get rules that are NOT fair to everyone because the circumstances locally on the ground are different. If policy changes are brought into place to cool off the economy, or cool off a real estate market, that could be very appropriate for a city like Vancouver or Toronto.  At the same time when Toronto experienced an 11.5% increase in prices, Calgary’s prices were essentially flat. Applying the same medicine to both markets might not be appropriate. Housing affordability issues in Toronto and Calgary are not the same. A set of rules that limit development in a dense urban situation might not be appropriate in an area of declining population. You may want the opposite to stimulate the growth of jobs and population.  OK. So we get that rules should not be uniform.  You can consider rules to be a set of constraints that are being placed upon you, attempting to limit what you can and cannot do.  Another way to look at government rules, is as a set of incentives. Government in essence is showing you the path to make investments.