June 28, 2008

Local politics explained in one sentence

Politicians control developers, so developers control politicians.

My published articles are archived at iSteve.com -- Steve Sailer

17 comments:

beowulf said...

This is true. Thanks to legal favoritism at every level of government, an absurd amount of our national wealth is tied up in real estate holdings. Certainly national (both Congress and the Federal Reserve) and state policies play a big part in real estate values. But its the gaming of local planning regulation that can reliably and quickly make real estate developers a fortune.

The more I'm involved with planning issues, the more I like Houston's lack of zoning regulation. From what I've read about it, land use is still regulated by the building code and deed restrictions, but the fewer planning regulations, the less incentive to buy and sell local politicians.

For anyone who wants to get in on the zoning racket, the finest book on the subject is Dwight Merriam's "The Complete Book of Zoning: How real estate owners and developers can create and preserve property value".

Anonymous said...

Steve,

Where I live the developers ARE the politicians. In my town a developer is the mayor, and the board is comprised of builders, real estate agents, loan officers from the local banks, and a few of the larger business owners in town.

Land here suspiciously gets zoned as commercial when its owned by these people, homes on lots get zoned as commercial (meaning you cant even refinance them or sell them unless its to a commercial bidder--who will dissapoint you with his bid I assure you) and often gets bought cheaply by people affiliated (suprise!) with people on our local board.

The typical junk is run also---things like your house getting appraised higher and higher each year so the mayor can say "I didn't raise your property tax". No, he didn't, but my house is appraised at least 10% higher than I could ever sell it and Im paying taxes on that price.


Growing up getting a public school education I, of course, wasn't warned about any of this. We know we will be getting liquor by the drink in our town fairly soon for instance because a couple of the big wigs are already building what looks like will be liquor stores, so the vote will come in just in time for them to open---before any competition can set up and even get going. Thats how it is here in my pleasant suburban town of 35,000. It is a nice place though, I do admit, even though its being run by very self-interested rednecks.

Anonymous said...

I'm not sure if local politics is COMPLETELY explained merely by the fact that developers control politicians.

Although if a municipality happens to be in the midst of widespread development - such as in urban areas near mass transit today - this is certainly the case.

These days local politicians seem to almost think they are justified in being "owned" by developers. The attitude, in so many words is : "Hey, people, the world runs on money. What else do you expect?"

How about holding an elected office and doing what is best - nonpartisan for the citizens who elected you, and not for who is going to fill your pockets, buy you a vacation home at the beach, buy your daughter a BMW?

Let's recall Forrest MacDonald, "Novus Ordo Seclorum" - noting that, at the Founding, the only people allowed to vote were people who owned property. The only people who held office were people with property, wealth. There was no temptation to make political decisions based on who was going to make you "rich"

These days of course on the local scene, getting elected to office is another way for certain people who are never going to make real money in the real world to get it through donations, developer kickbacks, etc.

Patel-motel said...

This is the heart of public choice economics, which is a part of libertarian political theory, which is second only to leftism as a target of political criticism on this blog and in its comments.

Come to think of it, the part of the political spectrum most supportive of the anti-federalist position is also libertarianism.

Hmmm... maybe there's something to it after all?

David said...

Beowulf, zoning is good. No sane person wants a chicken factory or Section 8 housing next door. I say this having no connection to the real estate business (thank God).

Regulations are necessary - if only to keep the streets clean and crime down. "Preserving property value" is a perfectly honest and defensible goal.

And if government doesn't do that, who will? Block associations of civic-minded Hmung?

"An absurd amount of wealth is tied up in real estate holdings" - this means it's absurd that anyone cares about where they live. After all, shouldn't they invest their wealth in things more important than land and home? Things like buying modern art, attending hip=hop concerts, making endowments to Harvard, and contributing to African charities?

Zoning ain't the problem, government ain't the problem, and real estate ain't the problem - the problem is a certain ideology, pushed by certain people.

testing99 said...

Somewhat OT, Steve, but since you wrote about him:

Steven Hatfill got a big settlement from the Justice Dept. -- $5.8 million.

See here

Talking about politics, there must be some monumental screwups Justice wants to hide.

Don't forget (back OT) that organizations take on lives and agendas of their own. Not even developers can fully control them (particularly things like Environmental Agencies).

TGGP said...

Sounds like the Public Choice theory of regulatory capture.

dollmaker said...

Steve's theory would explain the intense mobilization against insane state laws like this new one in NJ, which requires a % of all new development to be "affordable housing." As NJ segregates into upper-middle-class white/NAM and black/Hispanic towns, the Democrats' War on Wealth continues unabated. Corzine, still stinging from his failure to raise tolls, is closing hospitals (many nearly bankrupt due to illegals, I can report firsthand), and doing everything he can to force the middle class out to PA. Of course even if this bill survives, the "affordable housing" will be for seniors rather than NAMS, since school systems are most towns' main selling point and eat up 75% of local taxes.

http://www.nj.com/news/index.ssf/2008/06/nj_towns_mobilizing_against_ne.html

Svigor said...

Hmmm... maybe there's something to it after all?

The trouble with libertarians is their first principles. Start from homo economicus, and from there it's straight over the cliff.

Then there's their insistence on consistency, only, they aren't consistent (thinking of the intersection, or lack thereof, with race-realism here).

Dovetails with their tendency toward obsession with ideological purity; "must open borders... must be "consistent"... even if it means... suicide."

Obviously groups outcompete individuals and most libertarians won't acknowledge this.

But hey, libertarians who've solved these problems are welcome in my book! But would they even be libertarians any more?

I guess universalism is the problem with libertarianism. I'd be fine with libertarianism contained within the ingroup portion of an ingroup-outgroup dual morality. Interestingly, that may be the only way libertarian principles can survive.

Martin said...

"David said...

Beowulf, zoning is good. No sane person wants a chicken factory or Section 8 housing next door. I say this having no connection to the real estate business (thank God).

Regulations are necessary - if only to keep the streets clean and crime down. "Preserving property value" is a perfectly honest and defensible goal."

Exactly so. Although libertarians do have some valid points (as Patel Motel indicated), there are other, greater considerations when ordering a society, than merely economic ones.

Anonymous said...

David - zoning doesn't protect you from Section 8. If I own the house next door, and I decide I want to buy some neighboring houses, I can sign up for the Section 8 program, and advertise for a section 8 tenant, and there isn't a damn thing you can do about it.

Anthony

Half Sigma said...

Where I live the developers ARE the politicians. In my town a developer is the mayor...

I can trump that. Where I live, NY State, the former governor, Elliott Sptizer, was heir to a family owned real estate business worth half a billion dollars. Luckily he got kicked out of office because he got caught paying for sex.

Grumpy Old Man said...

"Create problems to sell solutions."

Anonymous said...

I live in Houston and I can assure you, no zoning is a disaster. It might work in an ethnically homogenous city, but here, it has served to push whites farther and farther out of the city. Only the very wealthy live in the city anymore. What happens is a nice neighborhood is built. Then multi-family units are built around it. When the economy slows, the units fill up with criminals, illegals, and anyone the owners can stick in the place. The nice neighborhood quickly deteriorates, and whitey is pushed farther out. Five years later the cycle repeats. It...is...unbelievable... With zoning, whites might have a fighting chance. With no zoning, developers win huge because they get to repeat the cycle every five years or so, all over the city.

poolside said...

One fascinating thing about Houston is the relatively young neighborhoods -- with houses built 20 to 30 years ago -- that are out-and-out slums. It's amazing how quickly entire areas of the city have basically disintegrated due to:

1) Cheap housing construction.
2) No zoning.
3) Plentiful, cheap land further and further away from the city.
4) The city's strong reputation among NAMs, and massive immigration.

David said...

anonymous said

With zoning, whites might have a fighting chance.

Nope. "Red lining." Move again!

Property regulation is like a gun. In the hands of the right people, it's good; in others, look out.

Clearly "red-lining" (anti-discrimination) laws do not work especially hard to preserve property value. This is the kind regulation that gives regulation a bad name among good people.

Ronduck said...

Local politics explained in one sentence:

Politicians control developers, so developers control politicians.*

*The above sentence is not applicable within the city limits of Detroit.