Economics Questions

Re: A question about property values

Zlatko — Sun, 08 Jun 2008 11:29:32 GMT

The best reductio ad absurdum I've read on this topic I think was from Rothbard:

If you own a business that sells widgets, and I decide to spend my money on something else rather than on your widgets, then the capital value of your business has been reduced. It's obvious that you should not be compensated for this.

Re: A question about property values

Stranger — Sun, 08 Jun 2008 11:23:01 GMT

Anonymous Coward:

JonBostwick:
If the land is truly unused, thus unowned, it is able to be homesteaded by the owner of the multi-million dollar mansion. He definitely could ensure that it remained undeveloped.

Who said anything about unowned?

It could be anything from 'virgin' land that Farmer Bob grazes his cows on to a big plot that some neighbor bought because they like the look of nature.

It doesn't matter.

The real issue is if you can coerce someone into not being able to develop their property.

No, you have to buy their right to develop their property.

Re: A question about property values

Anonymous Coward — Sun, 08 Jun 2008 11:16:03 GMT

JonBostwick:
If the land is truly unused, thus unowned, it is able to be homesteaded by the owner of the multi-million dollar mansion. He definitely could ensure that it remained undeveloped.

Who said anything about unowned?

It could be anything from 'virgin' land that Farmer Bob grazes his cows on to a big plot that some neighbor bought because they like the look of nature.

It doesn't matter.

The real issue is if you can coerce someone into not being able to develop their property.

Re: A question about property values

JAlanKatz — Sun, 08 Jun 2008 07:16:21 GMT

ama gi:
Suppose I own a home, and somebody decides to build, say, a nuclear power plant, across the street. My property value has just fallen through the floor. Should the power company have to buy up all of the surrounding land and before building the power plant?

How would you solve this "problem": You are a male out on the prowl for a wife. Each night, you get dressed up, put on cologne, and head out to a bar to meet women. You have a certain value on the marriage market. I now decide that I, too, want to get married, and so I begin each night to get dressed up, put on cologne, and head out to the same bar. This reduces your value on the marriage market. Should I owe you compensation of some sort?

How about if instead of a power plant across from your house, it's a Chinese takeout store across from your pizzeria? Again, this reduces the value of your property. Is compensation owed also?

Re: A question about property values

Bostwick — Sun, 08 Jun 2008 04:18:06 GMT

histhasthai:
I think we agree?

Yes.

Re: A question about property values

MacFall — Sat, 07 Jun 2008 19:24:21 GMT

Easements can help to preserve the value of the property in terms of what you paid for it, but you do not own other people's subjective values of your property should you wish to sell it. And when you're talking about "property value", you're talking about other people's opinions of your property.

However, it is concievable that one could buy protection in the form of insurance against property value loss...

Re: A question about property values

histhasthai — Sat, 07 Jun 2008 18:13:32 GMT

JonBostwick:
I dont think our examples are analogous.

I was pointing out the distinction between them. Blocking the sun from shining on my property vs the neighbor painting his house an unappealing color. The former you have a right to prevent, the latter you don't.

I think we agree?

Re: A question about property values

Bostwick — Sat, 07 Jun 2008 17:45:33 GMT

Anonymous Coward:
But if you buy a multi-million dollar mansion that borders a large tract of land and expect it to remain undeveloped until The End of Days™ then you are either a fool or a sucker.

Why isn't this undeveloped track of land not part of the mansion's property?

If the land is truly unused, thus unowned, it is able to be homesteaded by the owner of the multi-million dollar mansion. He definitely could ensure that it remained undeveloped.

Re: A question about property values

Stranger — Sat, 07 Jun 2008 17:42:05 GMT

ama gi:

Suppose we are living in a stateless, anarcho-capitalist regime. Does a property owner deserve to be compensated if a neighbor reduces property values?

Suppose I own a home, and somebody decides to build, say, a nuclear power plant, across the street. My property value has just fallen through the floor. Should the power company have to buy up all of the surrounding land and before building the power plant?

I think such a system would be a good idea. Rather obtaining permits from the government, or following arbitrary zoning laws, or using eminent domain, industry would be permitted to set up operations only after internalizing the costs of the depreciated real estate. They would then select their sites based upon a rational economic calculation.

What say ye?

If you care so much about what is built in your neighborhood, then it is your responsibility to buy up all the rights necessary to preserve the neighborhood. That can be accomplished with a market for cities. If you own several square miles of land around your house, no industry can set up shop without your approval.

Re: A question about property values

Bostwick — Sat, 07 Jun 2008 17:33:54 GMT

histhasthai:

JonBostwick:

histhasthai:
You don't have a right to a certain kind of neighborhood.

You certainly do. Someone's use of their property can infringe upon my use of my property.

For example, people are not allowed to build 100 foot walls that block the sun from their neighbor's property,

You made the correct distinction in your previous post, here you seem to be obfuscating it again. You have the right to prevent things that materially affect your property or your use of it, you don't have a right for the view out your window past your property line to be a certain way.

I dont think our examples are analogous.

The destruction of plants from the blocking of sunlight is no less criminal than the destruction of plants from pollution. If my use of land includes sunlight, I have the right to not have it blocked.

Mr. Burn's apperatus to block Springville from the sun is clearly illegal.

Re: A question about property values

histhasthai — Sat, 07 Jun 2008 14:06:03 GMT

ama gi:
people spend thousands, sometimes millions of dollars on homes in comfortable neighborhoods, and people have a right to get what they pay for.

You're right, they do. And part of what they pay for when they buy a house because of the neighborhood it is in are the positive externalities of the property of other people and their decisions about how to use it. Because that is dependent on others, and on their property rights, you're also buying the risk that they will make different decisions later. You can't take the free benefits of positive externalities and then demand that other people's decisions and use of their property are now subject to the maintenance of those benefits. You can, however, negotiate for it by offering them some guarantee of positive externalities from you that they want.

Ridiculous examples like tearing down premium ocean front housing to build an airport or a nuclear power plant aren't helpful. Only a government would ever do that.

Re: A question about property values

Anonymous Coward — Sat, 07 Jun 2008 08:07:44 GMT

ama gi:
What recourse do I have?

You can move...

If you value the view but don't own it then you have no right to determine how the property that composes that view is used.

My theory on matters such as this would be for 'homeowner associations' to get together and manage these things. The really rich people could afford to buy up a buffer zone around their community and either treat it like a commons or use it for economic activity like leasing out space for shops and restaurants or maybe sustainable logging if they owned the surrounding forest.

But if you buy a multi-million dollar mansion that borders a large tract of land and expect it to remain undeveloped until The End of Days™ then you are either a fool or a sucker.

Like a quote from someone talking to their real estate agent while considering buying property in Idaho I believe it was, "you like the view, you had better buy it."

Re: A question about property values

ama gi — Sat, 07 Jun 2008 05:39:22 GMT

histhasthai:

You don't have a right to a certain kind of neighborhood.

Maybe I'm just crazy, but I tend to think that people do have a "right to a certain kind of neighborhood" because people spend thousands, sometimes millions of dollars on homes in comfortable neighborhoods, and people have a right to get what they pay for.

Suppose that I spend millions of dollars on an oceanfront property. I am spending my money because I want a scenic view, the sounds of the waves, the smell of the ocean, and the isolation. Then, somebody else decides to build an international airport just by my house, so instead I have the view of 747's flying overhead, the sound of the engines, the smell of jet fuel, and increased insurence premiums due to the the risk of an aircraft crashing in my backyard. What recourse do I have?

Re: A question about property values

histhasthai — Sat, 07 Jun 2008 05:15:53 GMT

JonBostwick:

histhasthai:
You don't have a right to a certain kind of neighborhood.

You certainly do. Someone's use of their property can infringe upon my use of my property.

For example, people are not allowed to build 100 foot walls that block the sun from their neighbor's property,

You made the correct distinction in your previous post, here you seem to be obfuscating it again. You have the right to prevent things that materially affect your property or your use of it, you don't have a right for the view out your window past your property line to be a certain way.

Re: A question about property values

Bostwick — Sat, 07 Jun 2008 02:16:25 GMT

histhasthai:
You don't have a right to a certain kind of neighborhood.

You certainly do. Someone's use of their property can infringe upon my use of my property.

For example, people are not allowed to build 100 foot walls that block the sun from their neighbor's property, as this infringes upon my prior homestead.

But if I have 100 foot walls and you build your house under it, I am not required to demolish the walls. The sun was not hitting your property when you acquired it, so you have no right to sunshine.