posted
TheReader, you're right. It isn't out of line of *stated* ideologies... but those have been obscured in this country for quite some time.
Yes, "conservatives" (who are often Republicans, but those words are in no way parallel) generally want less government involvement. However, the freeing up of government constraints is often so that business can have its way - less government regulation means more power for wealthy businessmen to make more money, and less need for them to give it back to the government in taxes. So the *stated* goal of smaller government has come to mean something different in practice.
While this ruling expands government's power, going against the stated goal of smaller government, it serves the practical secondary goal of removing restrictions and red tape for land-development-minded businesses.
Posts: 3960 | Registered: Jul 2001
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quote:Dag: lots of people just don't want to sell, so that a developer can't buy at market value doesn't generally indicate what you say it does.
The legal standard is the price that would be paid between a willing buyer and a willing seller, both with complete information.
I agree that my statement doesn't hold true all the time. But I stand by my original assessment that that's the reasonable presumption until proof otherwise is obtained.
Proof otherwise might include a lone hold-out. This would be a strong indication that the market was correct. Not the case with the New London situation. They used the condemnation power on a whole neighborhood, immediately disrupting the market.
Posts: 26071 | Registered: Oct 2003
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Oh, and Flying Cow, as you say, it isn't out of line of "stated" ideologies. It is out of line with distortions heaped on those stated ideologies by their opponents.
Posts: 26071 | Registered: Oct 2003
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posted
I don't believe they can use condemnation without first offering to buy, and a waiting period following that.
Also, market value depends on how the good is being conceived. Is it homes in that neighborhood? Is it homes in similar neighborhoods? Is it homes with similar appraisal values?
Clearly, for the government the specific neighborhood is important, but what's relevant here is what the precedent is for calculating market values.
If your assumption were true, then there'd be no point to eminent domain in many cases, as the government could only buy at the price the person would have sold at anyways.
As the government often applies eminent domain for public works, this is clearly not the case, therefore your method is not the one for determining market value.
Posts: 15770 | Registered: Dec 2001
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quote:If your assumption were true, then there'd be no point to eminent domain in many cases, as the government could only buy at the price the person would have sold at anyways.
I can't tell if you're disagreeing with my statement of the legal standard. That is the legal standard.
quote:As the government often applies eminent domain for public works, this is clearly not the case, therefore your method is not the one for determining market value.
No. For public works, there's no profit motive for the government. Here, there is a profit motive - for the developers.
That's what changes the situation and my initial presumption. Where there's a profit motive, I am immediately suspicious of coercive sales. By definition, the government is interfering with the market, and they're doing it in such a way as to make a private venture or ventures profitable.
Posts: 26071 | Registered: Oct 2003
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Public works are by definition interfering with the market -- for one thing, they're buying up property that was developed through action of the market!
Not to mention there's a considerable profit motive in public works, its just not (usually) for money. Public works are improvements to the city,
BTW, your quote contained one outright falsity:
quote:After all, developers buy land at fair market value all the time and make subsequent profits. So it's not true they wouldn't want it, and it's not true they can't make a profit without paying fair market value.
That some developers make a profit off of buying some land at fair market value is not indicative that all developers which buy land at fair market value are going to be able to make a profit. This is easily demonstrable by appealing to construction ventures which fail.
Furthermore, since you're defining fair market value as what the person asks for, then if, say, all the people in a neighborhood wanted $2 million for houses they could only sell to other potential homeowners for $100,000, then at this "fair market value" there probably isn't a developer in the world who could make a profit on putting a mall there.
Plus, I'm amazed you say that is the legal standard, when it isn't:
For instance, in Michigan (which is apparently better to property owners than most states):
quote:Your award must be based upon the market value as of the date of taking.
A. The highest price estimated in terms of money that the property will bring if exposed for sale in the open market with a reasonable time allowed to find a purchaser buying with knowledge of all of the uses and purposes to which it is adapted and for which it is capable of being used.
Note that its not what the person is asked for, and in fact the sellers opinion doesn't matter one whit. Instead, its the value you'd get if you put up a for sale sign and got the best deal possible.
Posts: 15770 | Registered: Dec 2001
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quote:Public works are by definition interfering with the market -- for one thing, they're buying up property that was developed through action of the market!
Duh! That's my whole point.
quote:After all, developers buy land at fair market value all the time and make subsequent profits. So it's not true they wouldn't want it, and it's not true they can't make a profit without paying fair market value.
Look at what I said: "it's not true they can't make a profit without paying fair market value." I certainly did not mean all developers will always make a profit. It's ironic you seize on this statement, since it was introduced to demostrate the fallay of aspectre's statement being universally applicable.
quote:Plus, I'm amazed you say that is the legal standard, when it isn't
You're misunderstanding what is meant by "willing buyer and willing seller." In this case, the seller isn't willing, so this standard does NOT mean "the person is ask[ing] for." The quote you listed is a restatement of the willing seller standard. Here's one source:
quote: Fair value is usually considered to be the fair market value - that is, the highest price somebody would pay for the property, were it in the hands of a willing seller. The date upon which the value is assessed will vary, depending upon the governing law. If the parties do not agree on the value, they will typically utilize appraisers to assist in the negotiation process. If the case is litigated, both sides will ordinarily present expert testimony from appraisers as to the fair market value of the property.
quote:It is usually said that market value is what a willing buyer would pay in cash to a willing seller. Where the property taken, and that in its vicinity, has not [317 U.S. 369, 375] in fact been sold within recent times, or in significant amounts, the application of this concept involves, at best, a guess by informed persons.
Again, strict adherence to the criterion of market value may involve inclusion of elements which, though they affect such value, must in fairness by eliminated in a condemnation case, as where the formula is attempted to be applied as between an owner who may not want to part with his land because of its special adaptability to his own use, and a taker who needs the land because of its peculiar fitness for the taker's purposes. These elements must be disregarded by the fact finding body in arriving at 'fair' market value.
posted
The interaction between willing buyer and willing seller does not imply that if all the people in the neighborhood are asking exorbitant prices, those prices are fair market values for that neighborhood, which is my primary contention.
Note this part
quote:Again, strict adherence to the criterion of market value may involve inclusion of elements which, though they affect such value, must in fairness by eliminated in a condemnation case, as where the formula is attempted to be applied as between an owner who may not want to part with his land because of its special adaptability to his own use, and a taker who needs the land because of its peculiar fitness for the taker's purposes. These elements must be disregarded by the fact finding body in arriving at 'fair' market value.
That the people in a neighborhood have a particular attachment to their land is "eliminated" from the consideration of fair market value -- even if they're together in that attachment.
Posts: 15770 | Registered: Dec 2001
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quote:That the people in a neighborhood have a particular attachment to their land is "eliminated" from the consideration of fair market value -- even if they're together in that attachment.
I haven't argued that attachment value is included in condemnation fair market value.
You keep making my point for me. If a developer walked in and tried to buy a whole neighborhood in order to build a development, he would pay much more for the last house he bought. This is a well-documented, highly repeated phenomenon. In many cases, this still allows the developer to make a profit.
If condemnation is used, the reasonable presumption is that developer would not make a profit (or an acceptable profit) by purchasing the neighborhood as described above. What's for sure is that the developer will make more profit via use of condemnation than from buying the neighborhood on the market.
Is it really so unfair or distorted? Couldn't it be spun this way?:
<<This ruling will provide a significant boost for the economy, allowing businesses to more easily establish themselves in formerly locked residential areas and create jobs for those living in those areas. More businesses will lead to lower unemployment rates and will put more money in the pocket of the average citizen, increasing their purchasing power and fueling the economy. The ruling eliminates red tape and obstacles to starting business ventures, which will only serve to further fuel the economy, increasing property values and the standard of living.>>
Is that not an argument that might come from the Republican camp?
I mean, I think this ruling is a load of carp, myself, but it doesn't surprise me that our government would churn it out - and it wouldn't surprise me if it came from either side.
Posts: 3960 | Registered: Jul 2001
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posted
Only if you ignore the ongoing attempts, especially in conservative legal circles, to protect private property from government. For examples, look up "regulatory taking" sometime.
Posts: 26071 | Registered: Oct 2003
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posted
Yes, but is this protecting it from government? Or is it protecting it from private interests?
It seems that the ruling is against holders of private property and for capitalist-minded people who want to develop said property. The governmental function in this whole shebang is the newfound power to give the greenlight to private business/industry, rather than a power to take land for themselves.
The government already has processes in place to seize land for things like roads and other public works - this is giving power to private developers more than it is giving power to the government.
I mean, when they built Atlantic City, they drove out all the residents along the beach and constructed casinos - lots of arm twisting and buying out going on, with severely undercut prices. With this legislation, Donald Trump (as an example) would have a lot fewer obstacles in getting the go ahead to develop the whole of the beachfront property in any given coastal residential area into casinos.
Are there conservative circles that are against this? I'm sure. Are there liberal circles that are against this? I'm also sure. Are there circles on both sides of the aisle that are for this? I think there are, for different reasons.
If nothing else, the major campaign contributors for both parties surely made out like bandits in this particular instance.
Posts: 3960 | Registered: Jul 2001
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quote:TheReader, you're right. It isn't out of line of *stated* ideologies... but those have been obscured in this country for quite some time.
That's why I said stated. There are stated ideologies (what they say) and actual ideaologies (what they do). This is a rare case of both sides reconciling their respective stated and actual ideologies. Otherwise you are debating with me about a point I didn't make.
As a person with conservative views, my reasons against the ruling and this use of eminent domain are that I believe that using eminent domain to gain on the competition is unfair to other businesses and creates an artificial advantage, which destroys what the free market is supposed to be. I also believe it is an unfair way to gain property because it effectively bullies people out and virtually eliminates their choice to sell or keep it. That hurts the property market, and much more importantly, the people living there and the neighborhood. This is why eminent domain should be used rarely and solely for government use.
Posts: 684 | Registered: Jun 2002
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posted
The Washington Post is reporting that the case that sparked the latest round of eminent domain battles (made it all the way to SCOTUS) has taken a surprising twist. Because of the furor, the bank that originally agreed to finance the development that the city had favored in their property seizure has backed out. There are also something like 44 states likely to pass laws limiting local government's discretion in eminent domain, especially in cases that would transfer ownership to private entities.
One unfortunate side effect, though, is for the people who agreed to sell. Many of them apparently decided to move already and are now stuck with a house they thought had been sold.
posted
If they agreeed to but, it doesn't matter if teh financing fell through, theose people should get their money...it is still a binding contract, isn't it? Posts: 15082 | Registered: Jul 2001
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posted
I'm sure the developers were smart enough to put a clause in there about the purchase being contingent on being able to acquire 100% of the neighborhood.
There are too many stories of the little house surrounded by sky scrapers for them (or their financers) to not insist on some contingencies.
But I would be disappointed if those people hadn't gotten some up front money that's non-refundable.
I wonder if they'll start a class action lawsuit, and if so, who they would sue: the developers, the city, or the folks in their neighborhood who wouldn't sell.
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