Up Sucker Creek

Up Sucker Creek
Photo Courtesy of the Lake Oswego Library

Saturday, November 28, 2015

When a city over-regulates land

No amount of land-use regulation will ever be enough - that would mean government would have reached a state of perfection - which doesn't exist.  What we are left with is an increasingly aggressive regulatory environment that is chasing an ever-decreasing rate of return.  When is enough enough?  Where will we end up?

In every civilized society property rights 
must be carefully safeguarded; ordinarily 
and in the great majority of cases, 
human rights and property rights are 
fundamentally and in the long run, identical.

-- Theodore Roosevelt

Land use regulations exist because some people want to be sure their neighbors act in a way they find appropriate.  Some regulations are good. But when the general public's freedoms are too restricted, people may not want, nor be able to afford to keep up with increasing requirements.  The value of all of the land in the city is subject to a decrease in value when property upkeep and maintenance deteriorates and potential buyers perceive there is an overly-controling regulatory environment.

Who can afford all of the government's rules and requirements?  Why would one willingly subject themselves to an additional cost burden to live in one town if there were better alternatives?

If Lake Oswego wants to be considered desirable and competitive, for residents and business, it needs to examine its regulatory controls over private property and lifestyle choices.  Even the most wealthy resident will not stand by and watch their cost of living go up and up when they can choose to live elsewhere.   Many of Lake Oswego's most onerous land use regulations are "self"-inflicted by our own staff and political leaders.

Be informed about what is going on in City Hall and speak up and vote accordingly.

From PERC:  Property Environment Research Center
By Matthew Turner, Fall/Winter 2014

A new study says a little less may be more

WITH THIS IN MIND, our results are striking. There is a clear decrease in land values as we cross into more heavily regulated municipalities. There is also a steep decline in the share of land developed in more regulated municipalities. In short, the own-lot effect of land-use regulations is clearly negative and sufficiently large to warrant concern.
More surprising, we find that prices drop slightly as we move further into the interior of more regulated municipalities. That is, land-use regulations seem to be having a negative external effect. This suggests that the regulatory burden may be high enough that it reduces people’s willingness to maintain or improve their properties. In this case, as we travel into more regulated municipalities, we are likely to be traveling into neighborhoods that are less well maintained.
The potential upside of land-use regulations—and the reason they are so pervasive—is that regulations might reduce the irritations that your unregulated neighbors cause you. Our data, however, suggest that the external benefits of land-use regulations do not outweigh the costs of regulations, particularly if we account for the decrease in the total amount of land developed. That is, at the margin, land-use regulations are even more irritating than your neighbors would be if they were given a little more freedom.
The implications of our research are straightforward. The benefits from a modest reduction in land-use regulations are likely to be greater than the benefits landowners receive from regulating their neighbors.
Read more: “Land Use Regulation and Welfare,” by Matthew A. Turner, Andrew Haughwout, and Wilbert van der Klaauw. Econometrica, Vol. 82, No. 4 (July 2014).
- See more at: http://www.perc.org/articles/economics-land-use-regulations#.dpuf

1 comment:

  1. I love the Teddy Rosevelt quote. He was such a visionary and most of what he said is eye opening. I feel like no one today correlates property rights and human rights, but they are so connected. Great post and very thoughtfully written. So many of us do not know what is going on in our local government. Not good.

    Daniel Roberson @ Mark Bentley PA