Bacon's Rebellion

Democracy Thrives in Sunlight

AFFORDABLE AND ACCESSIBLE HOUSING — FROM BAD TO WORSE

—

by

James A. Bacon
in

We have not addressed the Affordable and Accessible Housing Crisis in some time, however, the last few days headlines suggest it is going from bad to worse.

The front page feature in Sunday’s WaPo spotlighted the convergence of bad Agency policies, programs and controls that have created a crisis in the Federal District. (“Forced Out: The Cost of D. C.’s Condo Boom.”)

The news is no better is Fairfax: “Some Homes Once Crowed Now Vacant: Fairfax Crackdown (on “over-crowed” dwellings) Has Unintended Consequences. An Hispanic immigrant was carrying a $550,000 mortgage on a house that sold at foreclosure auction for $120,600?

And the chickens are coming home to roost for Agencies as well. “Damage From Downturn May Be Worse Than Expected: Officials Say Rising Foreclosures and Drop in Spending May Force Revision of Feb. 25 (Fairfax County) Budget Proposal.”

On Friday the business news was headlined by “Investors Dump Securities From Fannie, Freddie: Mortgage Sector Strongholds Falter.” We have said for years the crime at Fannie and Freddie was not the huge salaries and coverups but rather the loan bundling was location-blind thus leveraging support for building the wrong size houses in the wrong locations.

Speaking of crimes, CNN reports that the FBI is looking into fraud at Countrywide Mortgage. Citibank is reported to be in trouble with subprimes…

And the ads keep rolling in; on paper; on Television; and on banners running over Google searches and under AOL e-mails for refinancing…

Financial Enterprise deregulation has really worked well. For lawyers and criminal investigators.

It is not just homeowners that are hurting from a drop in dwelling values and wild lending practices. The whole economy is on weak grounds.
You may have missed it but the Federal Reserve on Thursday announced that for the first time since 1945, owners equity in homes in the US of A dropped under 50 percent. Since 1945! Recall how many new houses were built and sold with very low down payments after World War II. But then this: The only reason that the 1945 date was in the press release is that 1945 was the first year they kept this record.

See “Good News, Bad Reporting” at db4.dev.baconsrebellion.com

Note for Larry Gross:

I just saw your note to us under the Atlantic Reality Falls Church post by Jim Bacon.

You are right “RuralZED” housing is not a useful term. I will check out the links you provided when I get back to the Housing Chapter of TRILO-G.

In the meantime, just because a dwelling has no connection to the grid for energy, water or sewer does not mean it does not have location-variable costs. There are 35 + / – other goods and services to be concerned about.

And speaking of eco-footprints, Larry, check out “Eat Locally, Ease Climate Change Globally” an op ed in WaPo Sunday. A farmer from Abingdon provides some numbers on the cost of food transport.

I know, I know you worry about mangos and papayas when you cannot eat them right off the tree. Do not get me wrong. We love mangos and papayas. Mangos are called “winter peaches” in our Household.

The answer is the same, price them for what they really cost to grow and ship and then let the market decide if they are a four times a week item or a once a month item.

Of course if you do not have a house and no refrigerator you may have to wait until Global Climate Change allows them to be grown in Appalachia. But maybe they can be now in that big green house… Does not look very wind proof…

EMR

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  1. Anonymous Avatar
    Anonymous

    “There are 35 + / – other goods and services to be concerned about.”

    Nonsense.

    RH

  2. Anonymous Avatar
    Anonymous

    “An Hispanic immigrant was carrying a $550,000 mortgage on a house that sold at foreclosure auction for $120,600?”

    How did the place ever get to be “worth” $550,000? The bank got out from under it for $120,500, but then, the bank doesn’t need a place to live. Does that mean the house is now “worth” $120,500? I’ll bet it isn’t appraised for that.

    Interesting thing is it was sold to Deutche Bank, apparently also an immigrant.

    Is the neighborhood better off with forclosed housed being sold at low prices, or with homes occupied as boarding houses?

    What happened to the people who were living there? Are they living in better, or worse conditions?

    What happened to the vendors they used to buy goods from? To the customers they provided services to?

    ————————–

    In the District, the government attempted to give people who did not own the property a say in what happened to it. The results were predictable.

    ——————————-

    Was the Fannie Mae loan bundling was location-blind to prevent redlining?

    ——————————-

    “According to a 2001 study by the Census Bureau and the Department of Housing and Urban Development (HUD), “nearly 40 percent of all residential properties in the United States, owner-occupied and rental units, are not mortgaged but are owned free and clear.”

    http://ask.yahoo.com/20060314.html

    My guess is that the Federal reserve figures applied only to homes with mortgages. Otherwise, with forty percent owned free and clear its hard to see how owners equity could be less than 50%.

    ———————————-

    “The whole economy is on weak grounds.”

    Those people that produce something of value will still have customers. Business has never simply stopped.

    Anyway, this means less gross consumption, and that’s a good thing, right? Maybe we are just having a correction in the index of sustainable economic welfare.

    RH

  3. Anonymous Avatar
    Anonymous

    RH –
    Until we all live in condos, walk to any and all destinations and have switched to a socialistic form of government EMR will never be happy. The housing crunch is just part of our capitalistic cycle. It has happened before and it will happen again. Since our world has become closer and more inter-dependent upon all the various countries the depressed economy will be hitting all the countries, not just us (although we seem to the first). In less than 10 years, probably about 6 or 7, our economy will be booming again and EMR will still be crying for a society that crams us into too small a living space, severely limits our ability to travel and our ability to improve our lot in life; i.e. a socialistic society.

  4. Larry Gross Avatar
    Larry Gross

    “There are 35 +”

    I, for one, would like to see the 35 enumerated in a rank-order list.

    Just like a zero-emission house, town or society is probably not possible at least tomorrow night to achieve a zero-emissions world, it similarly would not be possible to create a complete self-contained balanced-community …

    … but it would be useful and instructive to know which of the 35 are the most important and deliver the most return…

    .. say we nail 25 of the most important so that we actually REDUCE the location subsidy by 50% – then we HAVE achieved something worthwhile and we have started what has to be an evolutionary process (as opposed to an overnight Armageddon collapse of civilization).

    Here’s what we don’t have.

    We don’t have a template for change.

    We don’t know of the 35, which are most important and return substantial benefits towards less dependent development.

    And we don’t have a path for evolutionary change.

    At this point all we have.. that I can see.. are predictions of change.. forced on us.. as the economy reconfigures itself as a result of traumatic in the energy landscape.

    .. which I have not been convinced .. is particularly plausible as a scenario.

    .. it’s true.. if Global Warming occurs at the doom and gloom scale.. it will “fix” location variable costs for sure.. just as surely as a meteor striking the planet will…

    .. but I’m assuming that the idea behind location-variable challenges is.. meant to be futuristic in vision as opposed to the final chapter of something that says we were doomed to fail from the start.. and the current dialog exercise is basically a pre-post-mortem.

    🙂

  5. Larry Gross Avatar
    Larry Gross

    Here’s something some bloggers here might appreciate and perhaps would want to attempt to explain:

    “Assessment taken to the extreme

    While the real estate slump drove down home values, the cost of land in Stafford County skyrocketed, sending shock waves through neighborhoods with the most green space.

    Residential land values shot up 38 percent, leaving many property owners afraid of their looming tax bills.

    An extreme example is that of sisters Ann Rhodes and Barbara Gallahan. Their property’s value soared by nearly 600 percent. The assessment on their 48-acre parcel increased from $1,305,900 in 2006 to $6,974,200 this year.

    Rhodes, 64, said she didn’t expect such a large increase during a real estate slump.

    “I thought in this market it would probably at least stay the same or go down,” she said. “Do you know anybody else who’s had a 600 percent jump in their values?”

    okay – here’s the part I think bloggers should notice:

    “IT’S ABOUT LOCATION

    The sisters inherited the property in the 700 block of Garrisonville Road. Rhodes and her husband live in a California-style bungalow there. The house itself was assessed at just $5,000.
    …..

    The spike in their property value can be attributed to its location. The value of land in high-growth areas such as State Route 610 and U.S. 17 is influenced by commercial development, according to Commissioner of the Revenue Scott Mayausky.”

    and especially so – THIS PART:

    “So even land zoned for agriculture increased in value because of surrounding development pressures.

    The sisters’ land was compared with other agricultural properties under the same commercial influence.”

    So – here’s the deal.

    The County – DOES NOT INTEND – for this land to remain undeveloped even though they have it designated as Rural – they VALUE it as DEVELOP ABLE land.

    They are, in essence, inviting … no coercing the current owners to sell the land for development.

    Which leads me to ask the question – why is it designated as rural to start with”.

    further.. if it’s REAL ultimate designation is NOT RURAL then why is it .. single family subdivisions rather than city-grid-street type development?

    In other words – why not designate it as ultimately developable NOT for subdivisions but ONLY for truly “Smart” Compact-Use development.

    My purpose here in the above is to point out that the appraisal process… PRE-Ordains eventual development and if the county is going to do that – then why does it not also Pre-Ordain the type of development that is also part of their planning process?

    Why … have a policy that presumes … development… and not also presume the density allowed or not?

    EMR and all smart growth advocates .. I would have thought.. would have zeroed in on this aspect of the land appraisals.. long ago – to demonstrate – that counties like Stafford .. their policies.. are .. in fact.. oriented to development and not preservation nor density.

    The appraisal process… as currently practiced.. appears to me to be a potent motivator of “sprawl”.. and worse.. an absence of a companion plan for.. roads necessary to serve that sprawl.

    This explains perfectly why land gets developed.. that predictably .. over and over…. outpaces and overwhelms the transportation grid necessary to serve it.

    thoughts?

  6. Anonymous Avatar
    Anonymous

    “predictions of change.. forced on us.. as the economy reconfigures itself as a result of traumatic in the energy landscape.”

    We will undoubtedly have change. People will adapt to the forces that are applied, and they will adapt in an economically rational manner. That might not be the same as an environmentally rational manner.

    How traumatic the changes are remain to be seen. But, Jim Bacon is right in saying that we hamstring ourselves with zoning laws that are primarily designed to prevent change, rather than to promote good change.

    RH

  7. Anonymous Avatar
    Anonymous

    If it is zoned at rural/agricultural it should be valued as rural agricultural. The difference you note shows how political the process is: we’ll call it rural to placate the neighbors, be we really know better. Another example is the requirement that when rural property is developed, we charge back taxes on it for five years, as if it had really been developeable land all along.

    And they (the sisters or others in similar situations) are being coerced to sell only under certain conditions. My supervisor told me to my face that his plan for my wife’s property was to have someone wealthy buy it, so it could be placed in conservation. Other localities and other leaders may have different biases, but the result to the owner is the same kind of coercion.

    “why not designate it as ultimately developable NOT for subdivisions but ONLY for truly “Smart” Compact-Use development.”

    Like I said, other locations and other leaders may have different biases, but the end result is the same kind of coercion.

    Allowing only two kinds of development (rural and dense) you create a binary market, with much less diversity than now available.

    If they prefer, the sisters should be allowed to keep their land as it is, and not be forced out by paying much higher taxes to keep it, based on the actions of others around them. At the same time, they still have some obligations to their (new) community. We should be able to balance those conditions.

    By creating only two kinds of development, they might be coerced into keeping land that might have much higher value than allowed, far longer than they wish. keeping their land off the market, then, effectively subsidizes those that are able to build so called smart developments. That might be OK, and the best thing to do overall, but we should recognize that this is a case where the winners need to subsidize the losers, so that the benefits are evenly distributed among those that make the benefits possible.

    ———————————

    “land gets developed.. that overwhelms the transportation grid necessary to serve it.”

    I think this is an unsupported assertion. Popular, widely believed, but fundamentally the result of an oft repeated Big Lie.

    We have very little evidence that other forms of development actually result in less travel or less expensive travel. What we do know is that economic activity is closely related to travel. And yet we persist in thinking that we cannot “afford” this much travel.

    That might actually be the case, but we cannot make the savings at “no cost”.

    Suppose the sisters are disinclined to move or develop at this time, so they borrow against their new equity, knowing that the day of coercion is at hand.

    Then their zoning gets changed, such that their equity disappears, and their loan goes belly up.

    Are we going to blame the financial markets for that?

    RH

  8. Larry Gross Avatar
    Larry Gross

    “land gets developed.. that overwhelms the transportation grid necessary to serve it.”

    I think this is an unsupported assertion. Popular, widely believed, but fundamentally the result of an oft repeated Big Lie.”

    The number that VDOT, AASHTO and virtually EVERY authoritative transportation institution including the Feds FHWA uses is that each single family detached residence …

    …. GENERATES ten vehicle trips per day…

    … if you have authoritative information that refutes this – you should provide it…

    .. rather than calling info you don’t like or agree with – “a lie”.

    When you develop 100 acres into 400 1/4 lot homes… you WILL generate 4000 auto trips a day.

    This is not an unsupported assertion.. .this is proved by traffic counters.. over and over.. to the point where it IS used for planning.

    What I was pointing out was that the county designates land as RURAL that it, in fact, expects to be developed into subdivisions that will generate 40 trips per acre in traffic… WITHOUT ..ALSO putting into those same plans.. the roads that WILL be needed to serve such development – much less where the money will come from to build those roads..

    This is one of the most potent reasons why we have folks that are opposed to growth..

    … because they know from experience that the so-called planners and elected officials actually do not intend to deal effectively with the known impacts of growth…

    .. for the folks who are concerned about what they feel are unfair restrictions on growth .. if those folks are truly interested in developing better policies…

    .. if you refuse to understand and acknowledge the potency of the publics attitudes about growth along with how they vote at elections…

    .. then .. what can I say.. you basically refuse to deal with realities…and instead want to believe what you want to believe.. and then whine when the public insists on even more restrictive policies…like adequate public facilities.. etc….

    you can’t have it both ways..

    either deal with the realities.. to develop better ways of dealing with growth .. or pretend otherwise and watch even more restrictive policies get implemented…

    the ” to heck with the facts.. approach” won’t work…

  9. Jim Bacon Avatar
    Jim Bacon

    When all is said and done, I think we’ll find that fraud and criminal activity, all driven by greed, played a large role in the inflation of home values, the dispensing of loans to people unqualified to carry them, and the multi-trillion dollar write-downs of the sub-prime mortgage mess.

    Fraud: Real estate appraisers inflated the value of properties to help justify larger loans.

    Fraud: Borrowers over-reported incomes and/or under-reported assets in order to qualify for bigger loans.

    Fraud: Commission-driven mortgage brokers aided and abetted the previous two activities and took God-only-knows what other short cuts to move mortgages and cash in commissions.

    There were many other elements to the lending crisis, of course, as EMR rightfully points out: the securitization of loans and the decoupling of those who made the loans from those who lived with the consequences of bad loans; and a system that subsidized “building the wrong sized houses in the wrong locations.”

    As Americans go about the usual post-mortem witch hunts and superficial patch jobs to prevent a reoccurrence of events, we need to bear one thing in mind. The proclivity to greed and the temptation to commit fraud is a universal in all human societies. The job of government is to create rules and them police them. One of the reasons that greed ran rampant (not the only reason but a big one) was the failure of government at all levels to police the rules we already had in place. In other words, government failed in its most elemental responsibility.

    As we think about how to reform the system that bred the sub-prime fiasco, we also need to think seriously about the role of government (through the instruments of Fannie Mae and Freddie Mac)in securitizing mortgages, and the impact of that financial innovation on (a) divorcing those who originated the mortgages from the consequences of bad loans, and (b) the role securitization had in favoring the development of cookie-cutter subdivisions on the periphery of metropolitan regions above the re-development of aging neighborhoods closer to the urban core.

  10. E M Risse Avatar
    E M Risse

    Jim Bacon said:

    “The proclivity to greed and the temptation to commit fraud is a universal in all human societies. The job of government [The First Estate, Agencies] is to create rules and them police them. One of the reasons that greed ran rampant (not the only reason but a big one) was the failure of government [Agencies] at all levels to police the rules we already had in place. In other words, government [Agencies] failed in its most elemental responsibility.

    Exactly what Reich says in “Supercapitalism.”

    You are right on with the other points as well.

    Hope you are having a great trip.

    EMR

  11. Larry Gross Avatar
    Larry Gross

    great comments Jim and ditto.. hope you are living it.. (hint) if you cannot downhill… try x-country…

    re: fraud

    re: subsidies breed fraud

    when the Government offers money for someone to do something.. guess what often happens?

    When the government tells folks that NO MATTER how high the interest rate is on a home.. that they can write it off…

    … and at the same time.. the Government relaxes/ignores it’s own equity requirements on loans that it essentially guarantees… we get the same outcome when the Government … guarantees JUMBO CDs … aka the Savings & Loan snafu…

    It wouldn’t be so bad if we actually “learned” from the mistakes.

    I must conclude that the idea is not to learn.. but for greedy folks to figure out how to leverage tax-payer funded loan guarantees…

    for those that enjoy for fun and profit “gaming” the system.. only the name of the game changes…

    as taxpayers get “burned” .. and the government responds by bailing out those who should not be bailed out… and institutes ‘reforms”.. they are more than happy to entertain from business interests the next grand idea of the government promising to incentivize until it gets out of hand… and ends with another bailout.

    We are looking at a system that basically allows business interests to operate the government .. for fun and profit.. guaranteed by the same folks who toil away as workers struggling to make ends meet.

    It’s like average taxpayers .. are fiscal and physical beasts of burden… for monied interests…

  12. E M Risse Avatar
    E M Risse

    Jim Bacon:

    One other thing:

    A few days ago I was tempted to suggest that your “Watch Out, Poor Peope…” post about pay day lending legislation was a bit over the line.

    Here is something to think about when you are cross-country skiing:

    How do you compare and contrast that post with this comment:

    “The proclivity to greed and the temptation to commit fraud is a universal in all human societies. The job of government [The First Estate, Agencies] is to create rules and them police them. One of the reasons that greed ran rampant (not the only reason but a big one) was the failure of government [Agencies] at all levels to police the rules we already had in place. In other words, government [Agencies] failed in its most elemental responsibility.”

    Seems to me those who need a pay day loan are more in need of protection than those who qualify for a mortgage.

    Happy skiing.

    EMR

  13. Groveton Avatar
    Groveton

    EMR:

    “…but rather the loan bundling was location-blind thus leveraging support for building the wrong size houses in the wrong locations.
    “.

    Do you have any statistics to indicate that homes you consider to be the wrong size and in the wrong location are foreclosing at a higher rate than homes you consider to be the right size in the right location?

    Regarding your 4:05PM post – I was thinking the exact same thing about Jim’s mortgage vs. payday lending thoughts.

    Jim:

    Have fun in Wy.

  14. E M Risse Avatar
    E M Risse

    Groveton:

    “Do you have any statistics to indicate that homes you consider to be the wrong size and in the wrong location are foreclosing at a higher rate than homes you consider to be the right size in the right location?”

    Actually we do for past downturns and for the current one the numbers appear to be consistant.

    Early in a downturn (we all hope this is a “downturn” that is a trajectory that has a “early” and a “late” indicating it is not just an infinite multi-decade slide) it is the wrong location houses that you can pinpoint first.

    Check the forclosure notices by Radius Band.

    You can see the problem with wrong size by the percent drop in value, also by Radius Band.

    Fewer wrong sized dwellings are foreclosed because in this case “wrong size” means very large — the need is for workforce housing closer to work places — and bigger houses tend to be owned by those with resources to weather the storm longer.

    The fact that dwellings near METRO stations and otherwise “well located” have held their value is a good indicatior of what data will document in a couple of years.

    (Only developers have the resources to track this on a short term basis. Given your view of devleopers they may not share their information with you :>)

    On another note, did you see that the Vatican has made the wealth gap a mortal sin?

    Have a good trip to San Jose!

    EMR

  15. Anonymous Avatar
    Anonymous

    AASHTO has been under fire for some time for problems in its manual.

    95% OF OUR TRAFFIC CONGESTION TAKES PLACE ON 10% OF OUR ROADS 15% OF THE TIME.

    That is a long way from being overwhelmed. We have oodles of unused or little used roadway.

    Therefore the idea that land gets gets developed necessarily overwhelms the transportation grid necessary to serve it is an unsupported assertion. Popular, widely believed, but fundamentally the result of an oft repeated Big Lie.

    I say it again, and I stand by it. When our roads are overwhelmed, it isn’t because land was developed it is because too much stuff, primarily too many jobs, are put in one place. Otherwise, we have plenty of road capacity.

    EMR thinks the answer is to share cars, I think the answer is to share jobs. You think the answer is to prevent development. You are welcome to your opinion, and I think it is based on a widely beleived and often told lie.

    It isn’t the houses making ten trips a day that causes the problems: it’s that one trip per house going downtown at rush hour.

    “WITHOUT ..ALSO putting into those same plans.. the roads that WILL be needed to serve such development – much less where the money will come from to build those roads..”

    And there you have it: it isn’t the development that causes the problem but failure to plan and pay for it. The reason people are opposed to growth is they don’t want to pay for it.

    Even though they cause it and they profit from it they want the other guy to pay for it because “he caused it.”

    It’s a big lie. As you say, it’s an attitude with potency.

    If people were more opposed to certain kinds of growth than others, or if they accepted growth at some price, then I would agree with you. But what happens is that someone is always opposed to every growth project.

    They either want the benefits of growth without having to pay for it, or they want the benefits of preventing growth without having to pay for it. THEY are the ones that can;t have it both ways, and that is the truth.

    RH

  16. Larry Gross Avatar
    Larry Gross

    “They either want the benefits of growth without having to pay for it, or they want the benefits of preventing growth without having to pay for it. THEY are the ones that can;t have it both ways, and that is the truth.”

    hmmm..

    I bet the ex-BOS of Loudoun County know the truth about what people want… right?

    How do you reconcile the fact that folks have the right to vote out of office.. those that hold your views about growth and development?

  17. Anonymous Avatar
    Anonymous

    What is it you thik my views about growth and development are?

    I think they have the right to vote to prevent growth, they have the right to vote to promote growth. Loudoun has done both.

    Which ever way they vote, they do not have the right to take action that they benefit from at other people’s expense. But, some people are willing top spread lies to see that it does happen, whoever winds up in power.

    The people in Loudoun County started off 30 years ago pretty much on a par with people in Fauquier county. Today, they own more valuable property, per capita, and they earn more money, per capita than Fauquier residents.

    They also endure more congestion and pay higher taxes (which they have the money to do). Fauquier has more conservation land, open space, and farms. But, compared to Loudoun resididents it cost them something like $10,000 per person plus $3000 per year.

    Maybe it is worth it and maybe it isn’t. But, if they think they are saving money, they are lying to themeselves. The additional regulations raise the cost of housing at the expense of other valuable goods and services. They pay nothing to their neighbors who are excluded from future development.

    As far as I’m concerned they are just as bad as developers who profit at the expense of the community, and they are just as bad as existing do nothing residents who profit at the expense of developers and newcomers.

    Somewhere, there is a middle ground. I don’t know where it is. But what I see is a troika of circular lies, each designed to benefit one at the expense of the others.

    So yes, they have the right to prevent growth, and in doing so they enjoy the benefits of other people’s land and pay nothing for the benefits. They have the right to institute mob rule and discriminate against the minority. And they can lie themselves to sleep every night, if their conscience will allow it.

    But, if they do it thinking they are saving money, or that preventing development will prevent congestion, and solve all their problems, then they haven’t thought it through. They let someone else lie to them and get away with it.

    Those people in Springfield complained about the boarding house and got it shut down. Are they better off? Do they experience less congestion?

    Maybe.

    Now think about the people in Springfield plus those that got kicked out. Are they better off as a whole? Did they wind up with less total travel, or more?

    Who knows?

    Like I said, some people want the benefits of development without paying for it, and some want the benefits of preventing development without paying for it. As far as I’m concerned, they are both wrong.

    RH

  18. Larry Gross Avatar
    Larry Gross

    “Which ever way they vote, they do not have the right to take action that they benefit from at other people’s expense. But, some people are willing top spread lies to see that it does happen, whoever winds up in power.”

    well yes..they do… as long as they have the right to vote.

    and we talk about lies… which are what is said.. about growth verses what people actually encounter when they drive or take their kids to crowded schools.

    The Loudoun County BOS kept telling people that growth was good for them.. but everyday they saw more traffic and more crowded schools.

    So who were the people to believe?

    The supervisors that told them that growth was “good” or their own eyes and daily experiences?

    You keep saying that Adequate Public Facilities and management growth are “lies” and you’re certainly entitled to your opinion but then so is everyone else and when it comes time to vote at elections…

    if voters had the right to approve Adequate Public Facilities – you would lose .. not by a close vote but by a huge margin.

    You also keep talking about how Facquier County has stopped growth.

    Please explain if that is true how come they have a growth rate almost 3 times that of Virginia – more than 3% a year?

    That’s 2000 new residents a year – 800 new homes a year.

    http://quickfacts.census.gov/qfd/states/51/51061.html

    That’s not “no growth” by any stretch of the imagination.

    Some would say that Facquier is actually doing what most folks in Loudoun would have preferred and that is to grow only as fast as the infrastructure can be upgraded.

    In other words, Fauquier is actually practicing “adequate public facilities”.

    Would it be wrong or unfair to characterize your views as supporting unlimited growth, no zoning and no right to deny rezones?

    Are you in fact, in favor of unlimited growth without restrictions?

    Don’t you, in fact, believe that Loudoun and Fairfax have growth restrictions that you disagree with?

    Are you, in fact, an advocate of no restrictions on growth at all?

    Are you not in favor of any landowner being able to develop his/her property at any density that they desire?

  19. Anonymous Avatar
    Anonymous

    “You also keep talking about how Facquier County has stopped growth.

    Please explain if that is true how come they have a growth rate almost 3 times that of Virginia – more than 3% a year?”

    Good point. It’s all relative. look at Fauquiers three closest neighbors, which are growing several times as fast as Fauquier. how much of that is because it isn’t happening in Fauquier?

    I’m near the western edge of Fauquier. Drive down 55 and there is pretty much nothing, util you hit the Warren County line. At that point, Sprawl happens.

    Has Fauquier done the environment a favor by sending people farther west?

    ——————————-

    “Are you not in favor of any landowner being able to develop his/her property at any density that they desire?”

    No. I’m not in favor of factories or pig farms, or high rises in residential areas. I’m not in favor of any kind of nuisance that would have gotten you sued before zoning.

    But, I’m pretty sure that zoning has long since morped out of its original intent, and has become an engine for social engineering. And, because of the way the legal history has developed, it is pretty near impossible to sue for satisfaction. At least under nuisance law you got a jury of your peers.

    I think that if you bought a lot with certain restricitons in place, then you got what you paid for.

    I think that if you act to impose NEW restrictions on your neighbors lot then you are getting something you didn’t pay for.

    I think that even if you bought a lot with restrictions,those restrictions should be reviewed periodically. Say your property is on the boundary between half acre zoning and one third acre zoning. Your neighbors house comes up for sale and now you have an opportunity to get one acre on the boundary to one third acre homes.

    Even though your lot is restricted, considering other factors over time, then there should be a clear and unambiguous path which would allow you to buy the neighboring home with the assurance that you would be able to “join” the neighboring one third acre zoning.

    I think as a general rule, there should be clear an unambiguous steps you can take to move from one zoning category to the next higher – even if one of those steps involves payments to your neighbors.

    That way, everyone knows what the rules are, and everyone has the same opportunity. If the payment tou your six nearest neighbors is $50k apiece,they can be pretty sure nothing is going to happen. But, when prices on the optional higher zoning rise enough to make those payments feasible, they will be able to see those facts coming and prepare accordingly.

    I think zoning should be designed to accomodate at least as much change as it prevents.

    So, if you look at Fauquiers neighbors, Fauquier has prevented from 15 to 30% growth and allowed 3% growth. That is out of balance, considering the present realities.

    I think there should be a price on rezones. Fauquier claims that every new house costs them $2700 a year in expenses over taxes paid. Clearly, that is an outright lie. Some fabulous homes pay far more than they cost.

    But even for a modest home, suppose the prospective owner says, OK fine. I’ll pay you my taxes AND I’ll pay you an extra $3000 a year. Considierin ghis potential increase in net worth, it could be well worth the money to him.

    What is the county’s argument then? In Fauquier, the answer would still be No, and the reason is that we can. Not because it makes economic sense. Not because it is equitable. And the (false front, red herring, and probably wrong) argument is “We are protecting our quality of life and the environment” (at somebody else’s expense).

    But then, you go back and look at TMT’s argument “It would take decades for us to pay for the new infrastructure we already need and never built.” Then think about the county’s argument that every new home costs us $2700 a year. Well, why is that? BECAUSE THEY AREN’T PAYING ENOUGH AS IT IS.

    So, if the guy who offers $3000 a year was smart he might offer less and still come up with a “fair” offer. Maybe it’s only $2000 a year extra.

    But it won’t make any difference, because as you point out, the existing residents have the votes. I think it is stupid to have such a dogmatic view. If someone offers enough money, then it is stupid to turn down a rezone, and yet we do it all the time.

    So, going back to my staring point. If you buy a lot with restrictions then you got what you paid for. So, we could have situation like this: You buy a one acre lot or larger, it comes with the following restriction: large lot upzoning is for sale by the county and the price is $xxxx.xx.

    Now, everyone knows what the rules are going in. They know that they have nor right to simply say No, and get away with it at no cost. And they know that when the time comes and change happens, they will see some benefit.

    Some people will pay more to live in neighborhoods where the restriction price is high, and others will pay more to live in neighborhoods where the restriction price is low – but opportunity is higher.

    This would eventually put an end to your argument about what pople “want”, because there would be a market for it. If it is really what they want, there would be a way for them to pay for it.

    In short, I am no more in favor of any landowner being able to develop his property at any density he desires than I am of any landowner being able to restrict density (of someone else) to any he desires.

    RH

  20. Anonymous Avatar
    Anonymous

    “Estimates of the model, using a rich data set on individual land parcel owners in the San Francisco Bay Area, indicate that changes in the value of the right-to-build are the primary cause of house price appreciation and that the demographic characteristics of existing residents are determinants of the cost environment.”

    http://www.econ.duke.edu/~ado15/supply.pdf

    RH

  21. Larry Gross Avatar
    Larry Gross

    Thank you for providing the link.

    It is an interesting paper.

    here’s something it says that is interesting:

    “The analysis
    focuses on the development of individual parcels, where this type of infill construction covers
    approximately fifty percent of all single family residential construction over the sample period. [footnote] I exclude large housing developments or new subdivisions.”

    and then why would a guy from Duke choose San Francisco – a very mature urban area as compared with places like NoVa, or Raleigh-Durham, Charlotte, etc?

    IN reading his conclusions on page 47

    “To that end, I estimate a model of parcel owners’ development decisions. By combing the
    static continuous choice of what size to build with the dynamic discrete choice of when to build,
    I estimate the parameters of the prot function at a ne level of geography and still retain
    computational tractability.”

    Remember .. this is part of his conclusion.

    How in the world do you determine a “parcel owners’ development decisions” on a large scale study basis?

    He’s admitting:

    1. that he’s not looking at large scale development and

    2. that his study depends on understanding each parcel owners decision process about what and when to develop the parcel.

    so Kudos for providing the link.. but this particular paper is pretty flawed in my view…

  22. Anonymous Avatar
    Anonymous

    He is telling you what the limitations are, so he isn;t selling snake oil.

    Other authors have come to similar conclusions. You need to read more to understand the methodology.

    What is really interesting is another study by Glaeser in which he studies the greenness of various cities. (You will have similar reservations about his study techniques, but take it for what its worth).

    Greenness is not ONLY associated with density. The greenest cities have the most severe building and operating restrictions: they are more expensive and grow more slowly.

    Because of the expense, people are fleeing the green cities in favor of the brown ones. Because of the restrictions people see that their investments won’t grow in highly retricted areas. San Francisco was mentioned by name.

    Or as I put it: If you want conservation to pay, you have to make sure it is worth more than it costs.

    RH

  23. Larry Gross Avatar
    Larry Gross

    these are really silly and really unsupported ideas.

    Name the top 5 cities that have suffered from what you claim.

    Now name the top 5 who have prospered by NOT having green space.

    this is so much bull-feathers.. you know…

    It’s wrong twice:

    1. – there is no rational basis for the claim

    2. – even if there were – there is no suggested specific solutions.

    this is like counting rabbits from 10,000 ft.

  24. Anonymous Avatar
    Anonymous

    Unsupported?

    Would youlike a few dozen links from a few dozen other PHd’s that come to similar conclusions based on different bases?

    Or would you simply continue to dismis out of hand anything you disagree with?

    He is not in the policy business, he is in the measuring business. He tells you what the situation is, and the policymakers deal with it.

    He doesn’t have to get elected, so he is free to tell the truth as he sees it. And to have his ox gored in public by anyone who has a valid criticism.

    That means you need a rtional basis for the claim he has no rational basis.

    RH

    RH

  25. Larry Gross Avatar
    Larry Gross

    We all kmow that a PHD is not necessarily a badge of rationality.

    That’s why we differentiate PHDs sometimes by saying a “respected” PHD .. sez this…

    Legitimate PHD credentials are often confirmed by a body of work , replicated by others.

    they follow the asserted process .. and they confirm for themselves that it works as advertised.

    So lets do that. Name the top 5 ranked places that the actual DATA demonstrate this thesis.

    Until I see some real data, these guys are blowing smoke.

    So give the top five “green” cities that as a direct consequence of being “green”, have higher than median housing prices as compared to “brown” cities.

    Don’t you think if this were actually true – that it would call into question – the current policies?

    If this were true – NYC and Chicago would have to go back and think about how the lives of it’s citizens would be improved by selling Central Park or the parkland by the lake in Chicago.

    All the parkland in DC and NoVa would be converted to affordable housing.. right?

    if this thesis were true -we could actually show that people are economically harmed in urban areas by the presence of parkland…

    this is the kind of thing that in my view.. seriously erodes the credibility of the property rights folks…

  26. Anonymous Avatar
    Anonymous

    I don’t understand what you are getting at.

    Here is a guy who says that changes in the value of the right-to-build are the primary cause of house price appreciation. And he uses San Francisco as an example. In the article he describes where the data comes from, and (I think) he says he did (lesser)analysis on several cities to verify his techniques.

    This is consistent with several other articles posted here, by other authors that calculate how much of housing costs is due to regulation, and again, these are compared across multiple cities.

    And, as it turns out, Glaeser and Kahn also pick out SF as an example of a city which is growing slower than some others – and point to environmental regualations as a cause. So, they reach a very similar conclusion, coming from an entirely different directions.

    I don’t see anything in their work that stikes me as wrong. In fact, it seems to me to be merely substantiation of things that are intuitively obvious.

    We can ignore the fact that good things cost money, and pretend it isn’t so. Meanwhile more people move to less green places or are forced out of green places, and then we wonder why our “green” efforts wind up with MORE overall pollution and not less.

    If we think that creating green enclaves for the wealthy is good for the environment, then we need to think again.

    RH

    (How did tearing up central park for affordable housing get into this?)

  27. Anonymous Avatar
    Anonymous

    “this is the kind of thing that in my view.. seriously erodes the credibility of the property rights folks…”

    how do you get that? Glaeser has NEVER been known to be associated with the property rights nut cases. If anything he is on the othaer end of the spectrum. He’s trying to show that it IS homes in center city ARE more energy efficient.

    And then he points out, that the amount of energy saved by city varies, and it just happens that the most efficient ones are also the most expensive. It just so happens that previous different authors have told us why they are more expensive, and still others have told us how much more expensive.

    I’m not saying this means we should not do certain things. I’m saying that if we expect to be successful as environmentalists we can’t bury our heads in the dogmatic sand. We need to recognize these kinds of things, and then figure out how to make them work to our advantage.

    Otherwise we wind up like the poor SOB who spent two months trying to march eastward on the polar icecap – before we learned that it rotates westward.

    RH

  28. Larry Gross Avatar
    Larry Gross

    In order for any model to be valid – it means that it will consistently and correctly generate answers than match real world reality from the input conditions.

    What these guys are doing instead is asserting – without ANY definitive proof, relationships that could (or might not) be causal.

    If what they say is true then you should be able to replicate it across random cities to generate the actual rank order of green cities vs “ungreen” cities and they don’t do that;

    so, for instance, you could go to any random city.. calculate the green space.. and then predict the housing cost increase and that means you should be able to take any 5 or 20 cities and rank order them.. the more green space.. the higher the impact on prices and that rank order.. the bottom of the list should be the less “green” or even the “un-green” or brown cities.

    If you can not produce that list – then what is the value of their “study”?

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