How the Federal Government Dramatically Skews the U.S. Real Estate Market

One of most persistent canards about American communities is the idea that they’ve been built entirely by demand. People live in the suburbs because they want to. Drivers commute on highways by choice. The market long demanded single-family homes and strip malls, and so that's what the invisible hand delivered.

Of course, plenty of people do want to live in single-family suburban homes, and they happily choose to get from there to the office, the grocery store and the kids' school by car. But in the aggregate, the built environment we’ve created in American cities, suburbs and rural towns owes much more to the federal government than it does the free market. Not buying it? Here’s a price tag: According to a new report released this morning by Smart Growth America, the federal government influences our real estate sector – with tax credits here, loan guarantees there, grants and other programs – to a tune of more than $450 billion a year.