mnot’s blog

Design depends largely on constraints.” — Charles Eames

Thursday, 23 June 2005

Another, More Disturbing Reason Not to Buy a House

Filed under: Economics

As you might guess, I’m not too keen on buying a house at the moment, due to what I (and others) perceive to be a bubble in prices.

That’s a situation that will undoubtedly correct itself in the long term. However, the Supreme Court has just made buying a house in the US a much more risky proposition, and because of the way that the legal system works here, there isn’t much recourse.

In a nutshell, they’ve decided that towns, cities and presumably other jurisdictions can decide that the public good outweighs your property rights, effectively forcing you to sell them your property for a price that they name (as long as it’s a ‘fair market’ price).

This is called eminent domain, and it’s not new. What’s changed? In the past, the new use of the property had to be for the public good — e.g., for a highway, school or air force base (so that we can bomb other countries more effectively). No more; now public good includes selling the property to a private developer, with the notion that what they’ll do with the land you previously owned will generate jobs and tax revenue.

That’s right, it turns out that your locality’s tax revenue is more important than your fifth amendment rights.

“Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random,” O’Connor wrote. “The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.”

Now, if you’re familiar with the details of the case, which involves a few houses in a burned-out neighborhood that’s essentially on the wrong side of the tracks, you’ll say “it won’t happen to me, in my nice neighborhood.” Don’t be so sure; the reality is now that there’s a decision from the Supreme Court directly authorizing whatever nut-ball manages to get into your town council to take your property. I bet you’ll vote in that local election now, won’t you?

One of the functions of government is to provide a stable environment where contracts are honoured and property is sacrosanct. There are many examples of third-world economies that can’t get off the ground because there’s too much corruption, and because people and businesses don’t trust the government to protect their property; why invest in a country, or work hard, if the government can take away what you “own” on a whim?

What a nasty precedent. It shows the arrogance and mislaid faith in redevelopment that Jane Jacobs railed against in The Death and Life of Great American Cities;

The economic rationale of current city rebuilding is a hoax. The economics of city rebuilding do not rest soundly on reasoned investment of public tax subsidies, as urban renewal theory proclaims, but also on vast, involuntary subsidies wrung out of helpless site victims. And the increased tax returns from such sites, accruing to cities as a result of this “investment,” are a mirage, a pitiful gesture against the ever increasing sums of public money needed to combat disintegration and instability that flow from the cruelly shaken-up city. The means to planned city rebuilding are as deplorable as the ends.

She was writing about urban renewall in the 1950’s, but I have little more confidence in today’s developers, despite the advent of new urbanism and its limited charms.


8 Comments

Winter said:

“new urbanism and its limited charms”

Why does New Urbanism have limited charms?

Friday, June 24 2005 at 12:43 PM

Ian Bicking said:

I think it’s just an attempt to cherrypick aspects of mature cities, and it’s hard to do that. For instance, mature cities are full of people who are used to living in those cities. A large portion of the people grew up there. They’ve used a bus before. Little things like that help people live in a city properly.

The same is true for businesses – local businesses are hard to start, and with an upstart/artificial community there aren’t any local businesses. Chain stores pop up based on a plan, but local businesses simply don’t and can’t. A mature city has an economy that grew slowly and incrementally, along with a class of local businessmen and established businesses.

And maybe it’s not the New Urbanists’ fault – they can’t make magic happen. However, I’m much more interested in how to improve the good cities we have, instead of mimicking them in part. There’s still a huge amount to be improved, as well as the potential to physically grow a city without just growing suburbs – cities should physically grow again, but they aren’t really.

Wednesday, July 6 2005 at 1:10 AM

DJ Adams said:

There’s a similar issue in Spain, with the so-called ‘land-grab’ law. For example, see http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/04/17/wspain17.xml&sSheet=/news/2005/04/17/ixworld.html

Wednesday, July 6 2005 at 3:10 AM

Patrick Calahan said:

Not sure this would rank high on my list of considerations when buying a house, but I also found it quite disturbing. And I’m not exactly what you would call a libertarian.

The story has a pretty hilarious epilogue, though:

http://en.wikipedia.org/wiki/Lost_Liberty_Hotel

On Monday, June 27, 2005, Logan Darrow Clements faxed a request to Chip Meany, the Code Enforcement Officer of the Towne of Weare, New Hampshire seeking to start the application process to build a hotel on 34 Cilley Hill Road. This is the present location of one of Mr. Souter’s homes. Part of the process of building the hotel would be the seizure of Souter’s home under new powers of eminent domain declared permissible by the Kelo decision.

Wednesday, July 6 2005 at 9:59 AM

ron said:

“New Urbanism” sounds remarkably like it suffers from “Second System Effect” as per Brooks… it has all of the misfeatures: bloated, tightly coupled architecture, featuritis, overanalysis of the requirements, uses constrained to the preconceptions of the architect etc etc.

Wednesday, July 6 2005 at 12:01 PM

Patrick Calahan said:

Ugh, it gets even worse:

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=45851

Monday, August 22 2005 at 9:15 AM

orrin pierson said:

i am a farmer .could you please send me examples of farm land taken.

Thursday, November 24 2005 at 4:58 AM

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