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Barreto will decree a freeze in housing prices

By Miguel Octavio | The Devil's Excrement

17.01.06 | The Mayor of the Metropolitan area of Caracas Juan Barreto said this weekend that he would issue a decree freezing housing prices and would propose to the National Assembly a Bill for the regulation of the price of housing. According to Barreto, people are renovating old buildings and making improvements in order to sell them for more (Sic). He said that people who build luxury housing should be forced to build cheap housing too.

Well, the ignorant revolution marches on! Last year they created a Law to finance housing at preferential rates that were real negative, that they thought would solve the problem and nothing happened. Of course, the limitations were so many and the price that could be afforded with the maximum established in the law were such, that the whole thing has done little to spur housing cosntruction. (There were so many regulations that the Government took a long time issuing the "regulations" within the law, which further limited the impact of the Bill)

But rather than invent more hairbrained schemes, the Mayor should take a basic economic course and realize that this is a problem of supply and demand and the Chavez Government is responsible for most of the problem. Below, I have updated the graph of the housing built yearly for the last fifteen years, using data from the Construction Chamber of Commerce. As you can see, the last seven years have been an absolute disaster. It is absolutely remarkable that EACH and ALL of the last seven years has been worse than any of the previous eight, not one year has it been a better year than in any of the Carlos Andres Perez or Caldera years. And those were not precisely great Governments of our history! But they seem to get reivindicated more and more with the lack of accomplishments of the Chavez administration.

Venezuela has an estimated decifit of 1.7 million housing units. With numbers like those of the graph above, the deficit has grown under Chavez, whose inability to articulate any form of housing program is yet another failure of his incompetent and inefficient administration.

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