Property rites

Posted: Dec 29, 2004 12:00 AM

When I was house-hunting, one of the things that struck me about the house that I eventually settled on was the fact that there were no curtains or shades on the bathroom window in the back. The reason was that there was no one living on the steep hillside in back, which was covered with trees.

 Since I don't own that hillside, someday someone may decide to build houses there, which means that the bathroom would then require curtains or shades and our back porch would no longer be as private. Fortunately for me, local restrictive laws currently prevent houses from being built on that hillside.

 Also fortunately for me, my continued criticisms of such laws in this column have not made a dent in the local authorities.

 But suppose that someday either the courts will strike down land use restrictions or local officials will respect property rights. Maybe I will be long gone by then and the new owner of this house will be angry at the diminished privacy -- and consequently the diminished value of the house, caused by the building of houses on the hillside.

 Would that anger be justified?

 The fundamental question is: What did the homeowner buy? And would a change in laws deprive him of what he paid for?

 Since the house and the wooded hillside are separate properties, the homeowner never paid for a hillside wooded in perpetuity.

 If whoever owns the hillside finds that his property is worth more with houses on it, what right does the adjacent homeowner have to deprive the other owner of the benefits of building on that hillside or selling it to a builder?

 True, my house was worth more because of the privacy provided by the wooded hillside. But there was no guarantee that the hill would remain wooded forever. Whoever buys the house buys its current privacy and the chance -- not a certainty -- that the hill will remain wooded.

 If a homeowner wanted a guarantee that the hill would remain as is, he could have bought the hill. That way he would be paying for what he wanted, rather than expecting the government to deprive someone else for his benefit.

 Many restrictive land use laws in effect turn a chance that someone paid for into a guarantee that they did not pay for, such as a guarantee that a given community would retain its existing character.

 In the normal course of events, things change. Land that is not nearly as valuable as farmland as it would be for housing would be sold to people who would build housing. But restrictive laws prevent this from happening.

 Such laws help preserve the existing character of the community, at the expense of farmers and others who would gladly sell their land to builders if they had a chance to do so. Because they can't, their value of their land is reduced drastically.

 The biggest losers are those families who are deprived of housing and those families who are deprived of the standard of living they could have if they did not have to pay for sky-high rents or home prices due to an artificial scarcity of housing.

 The biggest winners are existing homeowners, who see the value of their property go up by leaps and bounds. Also benefitting are environmentalist groups who are able to buy up farmland at a fraction of its value because there are so few alternatives for the farmers.

 One of the rationales for such land use restrictions is the "preservation" of agricultural land. But nothing is easier than to dream up a rationale to put a fig leaf on naked self-interest. Far from being in danger of losing our food supply, we have had chronic agricultural surpluses for more than half a century.

 Another rationale for laws restricting land use is that "open space" is a good thing, that it prevents "overcrowding" for example. But preventing people from building homes in one place only makes the crowding greater in other places. This is just another fig leaf for the self-interest of those who want other people to be forced to live somewhere else.

 Whatever their rhetoric or rationales, environmentalists have no more rights under the Constitution than anyone else -- at least not until liberal judges began "interpreting" property rights away.