ROBERT BRIDGES, clinical professor of finance and business economics, USC’s Marshall School of Business
This op-ed originally appeared at Forbes on July 2.
Nearly unnoticed among the marquee decisions by this year’s Supreme Court session is Koontz v. St. John’s Water Management District. The decision granted the plaintiff the right to sue a governmental agency that required a payment – or ‘exaction’ – for public facilities miles away from his property as a contingency for approval of a building permit.
The headlines the morning after the decision heralded the ‘bolstering of property rights,’ but it’s doubly ironic that the integrity of rights in real property have been so badly eroded that it would take an act by the highest court of the land to simply grant the right of an individual to challenge a clearly confiscatory act, and that other forms of exactions – unforced, implied, or provided voluntarily – are an unfortunate but normal part of today’s real estate development process.
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ROBERT BRIDGES, assistant professor clinical finance, business economics, USC’s Marshall School of Business.
This op-ed originally appeared at Forbes.
It would seem that a government seeking to display a true populist streak by helping its citizens buy houses would do so in a way to ensure prices as low as possible. For those who are not yet homeowners, how is it populism when recovery makes houses more expensive rather than more affordable?
For some time now, demand for houses has been artificially boosted by federal and state tax policies, rising governmental involvement in residential-debt financing, and persistently low interest rates orchestrated by the Federal Reserve. This intensified demand has not been relieved by sufficient new supply of houses, resulting in intractable upward pricing pressure that has put home-ownership beyond the reach of growing numbers of moderate-income buyers. Future housing markets are likely to be increasingly vulnerable to destructive price swings if credit-fueled demand and no-growth sentiment continue to flourish.
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