A Remedy for Urban Blight

from Texas Public Radio letters - Mine was on December 23rd, 2010.

What was not mentioned at the Homelessness Town Hall Meeting:

If we start talking about externalities [the hidden costs of economic activity] and start charging fees to those who produce adverse impacts on the environment, we may start to ponder the fact that a property owner who allows vacant or neglected structures to exist on his/her property is causing a negative impact on the surrounding neighborhood.

If there is a general view that there is too high a prevalence of derelict properties, to the detriment of the community at large, then a fee could be attached to property owners who hold those vacant and neglected properties.

Taking account of spillover costs of neglected properties would give property owners incentive to improve derelict properties and make them available for rent or sale, which would increase the housing supply, thus reducing the cost of housing.

The existing housing stock would be utilized more efficiently.

The wealth of a society is subjectively experienced in relation to how efficiently it utilizes resources.

To have widespread homelessness amidst vast numbers of vacant properties is a sign of a malignancy in a society. It is nonsensical, and reflects underlying injustice.

The fee on neglected properties might be quite modest yet effective, or it may in fact be unnecessary. There could be a general fee on impervious land cover (such as asphalt and buildings) as a way to minimize the adverse impact of this kind of land use. (Impervious land cover is a detriment to community well-being because it means that rain showers are no longer a blessing to humans and the larger community of life but are instead a hazard to the community. Rather than soaking into the ground, rainfall washes off rapidly, contributing to flash flood risks downstream.) A fee on impervious cover would give all property owners incentive to ensure that all properties are maintained in usable condition and able to produce income.

A general fee on impervious cover would also tend to bring down the cost of housing AND keep neglected properties to a minimum.

These facts do not spontaneously emerge in the absence of a general discussion of economic externalities and ownership of natural resources.

Why is the topic of economic externalities not discussed on the public airwaves? I have asked my local NPR station and NPR's ombudsman many times but have received no reply.

Still wondering,...






On Tue, Mar 8, 2011, Greg wrote:
John, a few thoughts about the vacant property problem from my perspective:

The property owner normally pays substantial property taxes whether the property is vacant or not, so there is a logical consequence (penalty) for not making the property productive, though not necessarily in the proportion you mentioned.

[My reply to Greg: The public policy question is, 'Is the incentive sufficient so that, in the view of most people, the consequences in the world match what the people want? Does the current tax regime result in a sufficiently low incidence of neglected properties?'.

If there is sufficient incentive so that there is not a higher prevalence of abandoned properties than what a random sample shows is consistent with the will of the people, (if the reality matches what the people want to see in this regard), then the existing incentive is adequate. If the reality does not match (if there are more neglected properties than what most people would want to see), then that is a sign that the incentives to rehabilitate ought to be strengthened.]


Same with landlords who don't offer good or acceptable properties for rent at a fair price--they don't find renters and are generally economically penalized in proportion to their neglect or unfair pricing.

If the owner does not pay required taxes (or mortgage) for long enough, then normally the lender or county forecloses on the property and eventually sells it to someone more committed and able to make the property productive.

[There is less transparency in our society than there might be. We don't know at a glance which properties are held privately and which are held by banks, and which are held by the county. (Maybe something like Google Maps could help change this.) Counties and banks would feel this incentive to make the properties they hold productive, too, if we were to adopt this alternative paradigm, so the question of whether an individual piece of property is held by private owner, bank or county is apparently not relevant to the question of whether this paradigm would produce a better society than what we have now.]


However, properties reach a stage when they are no longer economically worth rehabilitating and should be demolished (with usable elements recycled). But as you know, the process often doesn't work, leading to urban blight and decay.


[I'm offering a proposal that would reduce the problem of urban blight and decay, in case anyone is interested.]


There are many programs that have and are being implemented with various success.


[I think we should aim for (and this proposal would result in) the level of success that is in accord with the will of the people at large.]


Some even involves strategic downsizing of an entire city, like Detroit is doing, and clearing some former blighted properties and making more community green space, parks, gardens, semi-rural farmland, playgrounds, etc.

http://www.washingtontimes.com/news/2010/mar/09/detroit-looks-at-downsizing-to-save-city/

It's a complicated and highly debatable matter to propose extra fees based on a largely subjective sentiments of other residents concerning ...


[How much light pollution is too much is a debatable question, too, and highly subjective. That is no reason to not limit the level of light pollution to levels that most people would say are not excessive. So, although you make a true observation (that the question of how much blight is too much is a subjective question), I fail to see how exactly does it pertain to the question of whether we ought to adopt this alternative paradigm.]


. Municipalities can and often do step in through their Code Compliance depts. to hire contractors to remedy the most egregious safety and health related violations and correctly place liens against violaters' properties.
Greg


[Rather inefficient instruments, those, since the government agencies cannot and do not exercise this power except in the most extreme cases. I think it is 'sometimes', not 'often'.]




From: John Champagne
To: Greg
Sent: Tue, March 8, 2011 8:53:27 AM
Subject: ps: something you do well would [also] be done [well] by more people

If people who hold vacant property that is an eyesore and a perceived detriment to the community were made to pay a fee in proportion to how strongly the community wanted to decrease the prevalence of derelict and abandoned properties, more property owners would have incentive to rehabilitate properties to make them marketable. If fee proceeds go to the people at large, more people have money in their pockets, so they are more able to pay rent.

This policy of charging a fee to those who cause environmental impact, and sharing the proceeds with the people, would mean that people who don't currently have housing could find it (because they would have some money and rents would be lower, with the increased supply), and our neighborhoods would look better.

This is just one way that this proposal would make the world better. (That would be better, wouldn't it?)

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