You can't go anywhere these days without hearing about real estate prices. It seems everyone is talking about how much their house is worth, which neighbour sold and for how much, and asking whether the real estate boom can last.

It's a refreshing change, actually. For years, growth in Saskatchewan property values has lagged behind most other provinces - reflecting a flat economy and mass out-migration. It's like Saskatchewan has been missing out on the party all these years, and homeowners finally got their invitation.

Regardless of whether or not the rapid rise in real estate prices continues, it's still good news for the economy. It reflects positive earnings growth among Saskatchewan workers, renewed consumer confidence and an historic resource boom. What's so terrible about that

The flip-side of the coin is that rising rents create hardships for the poor - it's argued -
and high home prices mean fewer people can enjoy home ownership. Landlords are cast as opportunistic villains capitalizing on an out-of-control market by extorting ever-increasing rents from powerless tenants.

There are already whispers that the government should do something about it. What that usually means is millions of tax dollars to subsidize low-income housing and rent control laws. Newly-minted finance minister Pat Atkinson has mused about the need for more public housing and members of the media are starting to talk about the dire need for government intervention.

The problem with rent controls and public housing is they don't achieve the desired objective - low-cost, high-quality housing. They haven't worked any where, any time and they never will work. That's because when the government limits how much people can charge for rent the only certain outcome is reduced supply and quality. When rents are kept unnaturally low it creates a strong incentive for landowners to sell off, convert apartments to condominiums or ignore maintenance requirements.

It's as sure as the Swift Current wind blows.

Rather than creating new rental opportunities, they're reduced which leads to higher prices and deteriorating living conditions for existing renters.

Likewise with subsidized housing schemes, which dramatically undercut private-sector investors. Take away the ability to earn a living renting out properties, and you'll predictably have fewer people interested in investing in real estate. You wind up with increasing demands on government to provide housing for people, and higher rents for those who don't qualify for government subsidies.

If the government wants to help people people feeling the pinch from rising house prices it ought to first look at the factors it directly controls. First among them are school taxes - which by some measures are the highest in Canada and rising quickly. Moreover, they are regressive in that they hurt low-income homeowners and renters more than well-off ones.

It's astonishing that the government would invest millions in inner city housing projects (the slums of tomorrow, today) and then turn around and slap an enormous school tax bill on a low-income family.

Whenever the housing market changes, there are winners and losers. Unfortunately, when the government tries to artificially control housing costs they inevitably create more poverty than would have been the case otherwise.

Reducing costs through lower taxes is helpful. Regulating costs with the heavy hand of government is anything but.