This is worth considering, but I don’t (currently) share your conclusion. In many cases, the (often past, not current) residents made the areas valuable by doing things they’ve since disallowed, things which would in fact continue to make the area (including their own property) more valuable. One of the key questions is: who gets to determine the cost or benefit to current residents of new development?
If a developer is asking to buy my property, then I do, that’s easy.
Otherwise, if we’re talking about compensating property owners for externalities caused by actions to develop land they don’t own, then how far do we push the reasoning? If developers need to compensate nearby property owners for negative externalities imposed on them, then who compensates the developer for the positive externalities they cause on properties the developer doesn’t own? Because if the answer is “no one” then this is a pure disincentive on development, even development that would net-benefit every single person in the community and surrounding communities.
Right now builders face an enormous number of veto points in any construction process. Of course, so do current homeowners looking to improve their own property. I once looked into converting a half bath in my home to a full bath. I was told 1) You’re not allowed to have a full bath on any level that doesn’t contain a legally- recognized bedroom, because someone once decided that this makes it possible to be used as an illegal apartment, and 2) You won’t be allowed to get any room on a walkout basement level recognized as a bedroom regardless of code definitions, for the same reason. So an action that imposes no cost on any residents, and in fact would likely drive up home values nearby, is disallowed, and overcoming the restrictions was far more costly than the value to me.
residents made the areas valuable by doing things they’ve since disallowed
It’s not mainly the buildings that make an area valuable, it’s who lives there. If there’s a problem in how appreciation is distributed I’d say it’s that non-resident property owners capture some value that they don’t deserve to.
If developers need to compensate nearby property owners for negative externalities imposed on them, then who compensates the developer for the positive externalities they cause on properties the developer doesn’t own? Because if the answer is “no one” then this is a pure disincentive on development
...governments do? It’s common for big commercial/industrial projects to get big incentives from city and state governments.
Right now builders face an enormous number of veto points in any construction process
someone once decided that this makes it possible to be used as an illegal apartment
People vote for ideological anti-development hardasses because other people kept getting bribed to look the other way while developers got special permission for an apartment next to your house, or because houses in the area got split by 10 guys.
This is worth considering, but I don’t (currently) share your conclusion. In many cases, the (often past, not current) residents made the areas valuable by doing things they’ve since disallowed, things which would in fact continue to make the area (including their own property) more valuable. One of the key questions is: who gets to determine the cost or benefit to current residents of new development?
If a developer is asking to buy my property, then I do, that’s easy.
Otherwise, if we’re talking about compensating property owners for externalities caused by actions to develop land they don’t own, then how far do we push the reasoning? If developers need to compensate nearby property owners for negative externalities imposed on them, then who compensates the developer for the positive externalities they cause on properties the developer doesn’t own? Because if the answer is “no one” then this is a pure disincentive on development, even development that would net-benefit every single person in the community and surrounding communities.
Right now builders face an enormous number of veto points in any construction process. Of course, so do current homeowners looking to improve their own property. I once looked into converting a half bath in my home to a full bath. I was told 1) You’re not allowed to have a full bath on any level that doesn’t contain a legally- recognized bedroom, because someone once decided that this makes it possible to be used as an illegal apartment, and 2) You won’t be allowed to get any room on a walkout basement level recognized as a bedroom regardless of code definitions, for the same reason. So an action that imposes no cost on any residents, and in fact would likely drive up home values nearby, is disallowed, and overcoming the restrictions was far more costly than the value to me.
It’s not mainly the buildings that make an area valuable, it’s who lives there. If there’s a problem in how appreciation is distributed I’d say it’s that non-resident property owners capture some value that they don’t deserve to.
...governments do? It’s common for big commercial/industrial projects to get big incentives from city and state governments.
People vote for ideological anti-development hardasses because other people kept getting bribed to look the other way while developers got special permission for an apartment next to your house, or because houses in the area got split by 10 guys.