Limiting Property Rights
in the Community Interest
Edward J. Dodson
[An unpublished essy, December 2007]
Despite the demographic trend bringing people back into cities to
live, large sections of our cities remain nearly empty, with hundreds
or even thousands of abandoned, boarded-up buildings. As city agencies
demolish these buildings, the number of empty lots expands - lots for
which their is no market demand (not even by speculators).
Not more than a few decades ago, these properties were occupied and
used.
Abandonment and dereliction occurred rapidly, however, as employers
moved elsewhere to protect profit margins or went out of business
altogether. The most-skilled young followed them, leaving poorer
residents of an older generation behind to age in place. Again and
again, these older residents were joined by even poorer people who
leased deteriorating housing from absentee owners who cared little or
nothing about their properties or the communities.
For many reasons, including ignorance, destructive public policy and
corruption, governments proved unable to respond to this crisis. The
quality of life for millions of people suffered while our societal and
institutional framework slowly adjusted. In many U.S. cities, a long
process of negotiation and engagement brought public and private
resources together to stimulate housing and business investments in
targeted areas. Subsidies were and continue to be utilized to get the
ball rolling, so to speak, and
market forces are then unleashed with a long list of
unforeseen consequences.
The remnants of historic neighborhoods avoid the wrecking ball and
gradually recover to become the heart of a city's residential
community - occupied, now, by high income households -- who return to
the city when children have grown -- or professional singles who value
the cultural diversity of urban living.
This progress of gentrification has occurred in U.S. cities
such as Philadelphia, Boston, Chicago, Baltimore, Charleston, and
Savannah. In the nation's heartland, the revitalization of
Chattanooga, Tennessee is frequently pointed to as a remarkable
success story. Even so, nearly every city continues to suffer from
blighted sections. Gentrification succeeds at the price of diminished
economic diversity, the poorest citizens pushed into the areas with
the worst housing, poorest services, highest crime and lowest quality
of life.
As we know, none of these cities has taken the step to shift taxes
from property improvements and onto land values. As indicated above,
the core parts of the cities are doing fine; poorer citizens are even
more marginalized today than in the past; and, some sections of the
cities continue to deteriorate while ringed by a very limited and
selective prosperity.
Altering the source of public revenue is, ultimately, the solution to
this problem. Then, market forces will gradually create a full
employment economy. These critical measures are not even on the reform
agendas of the main political parties, unfortunately. Only a
scattering of local officials have come to appreciate the harm caused
by how public revenue is today raised. They face determined opposition
by entrenched interests who benefit by existing socio-political
arrangements.
Even with tax shifting (i.e., land value capture) measures in place,
communities ought to exercise rights to protect their quality of life
against those who leave property unattended for an inappropriate
length of time. Under current laws, the process of condemnation of
derelict properties takes forever. Only when the owner fails to pay
property taxes for several or after numerous complaints by other
residents will government move to take the property at a tax sale.
What happens then only makes the situation worse: the property goes
into the city's inventory with no firm plan for rehabilitation or
demolition. Years pass, and properties become a worsening blight on
the neighborhood.
City government needs to work in tandem with neighborhood
organizations able to take properties, quickly make repairs and return
them to occupancy. This could, be accomplished by deed restrictions
stating that ownership of land and the improvement thereon is
conditioned upon continued occupancy, that if the property becomes
unoccupied for a period of three or five years, ownership would
automatically be transferred jointly to the community and a nonprofit
community development organization.
Special circumstances will always occur; for example, the owner of an
aging building in need of extensive rehabilitation and modernization
might need to remove all tenants for an extensive period while
rehabilitation is underway. However, when abandonment has clearly
occurred, the community's interest ought to take priority over any
privacy or property interests of the deedholder. Communities will
remain communities only when empowered to protect the overall quality
of life.
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