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Cities, make up your mind — cheap housing, or expensive housing?

From a link at the foreclosures site, we see an interesting story on another town that thinks it owns the residences’ properties. I hear endless stories about towns in the Chicago area that wanted to “do something” about rising housing costs. My business partner lives in a lower class versus upper class community called Evanston, Illinois that very recently wanted to pass legislation to mandate cheap housing.

But now it seems that the housing bubble burst is leaving towns changing their minds. Instead of forcing housing developers to make cheapers, some towns are now forcing housing developers to make no houses. Both sides of the city debate show what government can do to the market when they want to.

Private property is just that — private. The owner should have a wide berth of what they can do with that property, and in my opinion they should have absolutely no limits as long as they don’t trespass or pollute on their neighbors. Yet cities believe they own your land — and they’ll tell you what to do with it.

If developers want to keep building in your area, it may leave an increase in supply, bringing down housing prices. Homeowners cry foul, as if the current value of their home has any reflection on their short-term financial future. It does limit how much equity they can extract to take another cruise vacation, but you made the decision to live near open fields — and someone who owns those fields should be free to make the decision to develop them.

The housing bubble will leave us with a myriad of conflicting laws and regulations. You might have towns that mandate low-income housing, but then mandate building no housing at all. How can developers survive if they can’t develop? Even worse, some towns have taken out million dollar bond issues in hopes of paying off the new super-school, while watching residents flock out of the town because of higher taxes and living expenses (due to the bond issue!).

Rather than asking cities to make up their mind about what they want, maybe we need to demand that cities back off from our properties and leave home owners to make the decision on what they do with their land. Here’s a hint: if you don’t want your neighbors “messing up” your property values, own enough property that you don’t have neighbors. Problem solved.

Discuss this at the housing bubble forum.