No one would probably argue with the statement that Germany has one of the strongest economies in the world. Did it achieve this by restricting government influence on the economy? The answer to this question is no. The German government from federal down to municipalities is constantly involved in managing the economy and this includes the housing market. German economic policy aims to keep housing prices low and the cost of home ownership high. People are encouraged to rent rather than own their homes. Strong tenant laws help keep renters happy and economic incentives encourage owners to rent their properties rather than occupy them. While this may seem counter intuitive to us in the United States, the German government has found managing the housing market is beneficial; it encourages worker mobility. If a worker must or wants to relocate for employment, he or she is not tied down by a home which cannot be sold. As a result, labor is available where and when it’s needed.
Check out this article in Forbes for the full story.