ADC Blog

(Thanks to the the American Thinker for publishing my column over the weekend.)

Now that Herman Cain has become a top-tier presidential candidate for the Republican nomination, he is receiving a greater degree of scrutiny than ever before.  And that includes efforts by the mainstream media to do what they do best to conservative candidates: prove somehow that said candidates are unfit to serve.

First it was MSNBC’s Lawrence O’Donnell playing the role of the white liberal lecturing Herman Cain on what it means to be black.  Now it’s Chuck Todd wondering what did Cain know and when did he know it…about housing bubbles.

During an October 11 interview (minute 4:58) on MSNBC, Chuck Todd said to Cain:

This is something you wrote in 2005, saying, arguing that there was no housing bubble. You wrote this in 2005, in Business and Media Institute, you said, “Coverage of the Bush economy reads like a collection of Democratic Party press releases, calling a strong economy everything from struggling to volatile or dicey. That kind of ignorance makes homeowners fear that their most expensive possession could turn worthless overnight. That won’t happen.”

Cain said he didn’t know “just how bad Fannie Mae and Freddie Mac had distorted the housing market.”

The implication is that Herman Cain is not fit to lead America into economic recovery because he didn’t see the bubble before it burst.  But if failing to recognize the housing bubble and its causes is a disqualifier, then virtually all presidential candidates would be ineligible, including President Obama.

The housing bubble was real, . . .

Read the rest here.

First they came for the lemonade stands , and I did nothing for I didn’t run lemonade stands … or something like that.

We’ve chronicled here examples of government becoming unnecessarily intrusive and either micro-managing private businesses or bullying property owners.  Now Big Government is coming after treehouses!

In Falls Church, Virginia, Mark Grapin spent $1,400 on materials and built his two sons a treehouse on his own property.  Mr. Grapin is far more sensitive to government bureaucracy than I am, for he even called the Fairfax County building department in advance to check on any codes issues of which he needed to be aware.  He was given the go-ahead and built the treehouse.

“It has red clapboard siding, shingles, a slide, a pull-down ladder, two climbing ropes, closed windows and shutters.  It is wrapped around the tree but stands free, not touching the tree. It stands to the side of his house.”

But someone anonymously complained, so local bureaucrats told him he needed to get a zoning variance or take down the – get this – “accessory dwelling.”  So Mr. Grapin spent another $1,800 on the various forms and setting up the hearing only to have is request denied.  Currently, the treehouse is still up as the owner has one last appeal.  If his appeal fails, he’ll have to tear it down.

But even if approved, this is still a stunning indictment on the state of property rights in America.

The city of San Juan Capistrano, California, is cracking down on some miscreants who have the temerity to host a weekly bible study in their own home because they didn’t get a governmental permit to do so.

This post isn’t about religion but rather the right to gather in your own home.  Thus, this is about property rights.  And it’s about a local government being a bully (exerting power simply because it can) and greedy (imposing fines because it can).  There is simply no valid reason for the government to permit or not permit this activity.  There is no impact that imposes a generalized cost on the city’s taxpayers (which might justify a fee to help offset costs).

And the slippery-slope argument is as laughable as it is bogus: There is no indication that – left unregulated – this activity might spark a breakout of widespread bible studies throughout the metropolitan area.  James Madison observed that “there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations.”  That we have gotten to the point where officials in supposedly representative governments can flex such power proves this point.

This is Big Government in Your Backyard.  Thankfully, the Pacific Justice Institute is coming to the legal aid of the family.  We wish them well!

Another city and another effort to mandate Smart Growth planning policies.  Yet the rhetoric is misleading.  “We’re not anti-car. We are all about options,” says Elyse Lowe, executive director of Move San Diego, one of the forces behind a new stringent regulatory process for development.

According to the San Diego Union-Tribune, ”developers will have to show that their projects meet a lot of the smart growth criteria found in the draft Sustainable Communities Strategy, a companion document to the San Diego Association of Government’s epic 2050 Regional Transportation Plan.”  Among the features, projects will need to show that they are “accessible to transit, offer pedestrian and bicycle infrastructure, offer access to retail and employment centers, do not use dedicated open space or protected habitat and are of smart energy-conscious design.”

Smart Growthers like to say that these things are what people want anyway.  But if this is our preference, why must it be mandated?

In the Richmond Times-Dispatch, Barton Hinkle reminds us that local and state governments continue to abuse their eminent domain powers, saying that this is where government shows a real mean streak.  He goes on to mention recent episodes that are playing out.  These caught his attention because the victimized property owners have fought back and, consequently, drawn headlines.  Keep in mind that for every one of these, there are likely dozens of instances where the property owner just knuckles under from the threat and intimidation of Big Government.  And these cases are just in Virginia!

A quick review of just yesterday’s news finds eminent domain action taking place in Louisiana and California.  The Institute for Justice continues to chronicle these public takings of private property across the country and fight against them where they can.  In the wake of the infamous Kelo vs City of New London case, eminent domain marches on.

The on-going abuse of eminent domain powers raises several points.  First, the abuse remains all too frequent.  The government wants all or some of your property and takes it, giving the property owner a low-ball dollar value as compensation.  Second, eminent domain action is often unnecessary but used because it’s the “simple” solution for the government.  Third, because eminent domain is a power granted, it is a power to be abused unless an active citizenry remains vigilant.

Singing from the heartland, John Mellencamp heralded the “little pink houses” for you and me that symbolized the American Dream.  That will remain true only if We the People can curtail government’s “mean streak.”

Owning a home is how many people define the American Dream, but this involves a process, not a single act.  In other words, someone doesn’t wake up one morning and make a rash decision to buy a home.  The process involves necessary steps, and if a step is eliminated, or if too many hurdles are placed in the way, then it becomes less likely the end result will be the home of one’s choosing or even homeownership.

These steps toward the American Dream often begin with renting.  Young couples or singles often rent an apartment first as there is less maintenance required than in a detached house with a yard, and rent is relatively inexpensive.

As the person or couple get secure in employment and begin earning wealth, they usually begin looking for a home and property.  At this early stage, however, it’s unlikely they will have saved up enough to buy their dream home.  So they buy a starter home – a place where they can start a family, have a bit of backyard, and learn the necessities of owning and maintaining a home.  This involves the responsibility of a mortgage.  As they get older (and the family grows), people then look for the home they want to watch their children grow up in.  They look for the right school district or the right neighborhood.  And they buy a bigger, more expensive home with more property.

Unfortunately, this process – imperfect but functional – is now jeopardized.  The Los Angeles Times reports that homeowners who want to trade up – that last link I’ve described –  are stuck waiting due to collapsing prices.

“Potential move-up buyers … are largely sitting on the sidelines these days, leaving a key part of the housing market stuck in neutral. The promise of rising prices and upward mobility, once a powerful force in the American housing narrative, has been all but shattered by the downturn.”

With so many people stuck in step-up homes, the next generation will likely have difficulty buying the start-up homes they need in this process toward the American Dream.  With the collapse of the housing bubble, this and other critical links have been severely weakened.  Although homeownership rates remain high, they’re likely to begin falling in the coming years.

Here we go again.  As a result of America’s “excessive emphasis” on homeownership, we have:

mistakenly relied on homebuilding for economic stimulus, and fostered misconceptions about homeownership and financial independence. We’ve diverted capital from more productive investments and misallocated scarce public resources.

So says Robert Bridges, professor of clinical finance and business economics at the University of Southern California’s Marshall School of Business, in the Wall Street Journal.  This adds to an earlier piece by respected opinion writer Robert Samuelson of the Washington Post, who refers to this quintessential version of the American Dream as a “homeownership fetish.”  Samuelson says the national pursuit of homeownership has outlasted its usefulness, but Bridges argues that it was never that useful anyway.  To his credit, Bridges recognizes that “owner-occupied homes will always be the basis for healthy and stable neighborhoods” but challenges whether they are “good investments on the road to financial independence.”

The ADC believes that homeownership has many benefits and that for some people it is a good investment leading to financial independence.  And we do believe that – as an ideal – it remains a key element of the American Dream.  The housing bubble and subsequent crisis that followed is more the result of excessive governmental regulation and intervention in the housing market than the result of too many people pursuing their dream of owning their own homes.

Here are a few principles on which a sensible housing policy should be based:

I would be interested in hearing other suggestions.

If you’re concerned with the role states play in fostering job growth and economic development, you’ll know there are two models on the spectrum of growth management.  The first is California, which pioneered many of the growth management laws and regulations that have been adopted to different degrees in many states.  The other state is Texas, and when you talk about Texas you can immediately sense the dripping disdain of the professional planning community.

Texas doesn’t regulate much and the many cities and metro areas in the Lone Star State don’t regulate much either.  So what you have in cities like Dallas, Houston, San Antonio and even “progressive” Austin is a laissez faire environment as close as you can get to the ideal as you’ll likely find anywhere else.

Government planners hate it, but evidently job creaters love it!

A new report by The Business Journals finds that in the past ten years, Texas added the most private sector jobs.  But even that statement doesn’t do the numbers justice.  Texas added 732,800 private sector jobs.  No other state topped 100,000.  Arizona comes in 2nd place with just 90,200 private sector jobs created in a 10-year period.

Meanwhile, the “model” state upheld by urban planners and Smart Growth politicians – California – lost 623,700 private sector jobs during this same period.  There are lessons to be learned for those serious about economic recovery.

As odd as this sounds … there’s some news out of California that meets the standard of good common sense.  I know, odd.

California Governor Jerry Brown is proposing to eliminate the state’s 400 redevelopment agencies.  His motive seems to be strictly fiscal – it will save $1.7 billion dollars in a state that is $25.4 billion in the hole.  More accurately, it will redirect $1.7 billion to services like police, fire rescue and public education.  See, redevelopment zones “capture” the new tax revenue generated through redevelopment in “distressed” areas.  The new taxes cannot be used for essential, core services but only for projects that contribute to redevelopment – e.g., street scaping, facade grants, corridor improvements (usually transit amenities but not capacity enhancements).

Over at the Volokh Conspiracy, Ilya Somin adds another benefit of eliminating redevelopment agencies: ending eminent domain abuse.  With the legal designation of a redevelopment area, local governments, sometimes working through a publc-private authority, can condemn private property if they have a redevelopment plan that promises greater tax revenue.  In other words, instead of the traditional (and rare) use of eminent domain for public uses likes roads, resevoirs, schools, etc., redevelopment-oriented eminent domain can be used for public purposes … like bringing more tax revenue into city or county coffers.

This was exactly the rationale used in the infamous Kelo v New London eminent domain decision that reached the Supreme Court.  The liberal majority’s reasoning was that the New London Redevelopment Agency had a “comprehensive plan” and that redeveloping that area for mixed-use retail, which would generate higher tax revenues, satisfied the “public purpose” test and, therefore, was a justifiable use of the government’s takings powers.  Homeowners and private property owners beware.  Your rights are nothing if your local government has a plan!

Of course, Kelo was in Connecticut, not California.  The inherent problems with eminent domain abuse and tax diversion coming from redevelopment agencies is a nationwide problem.  So,  yes, Governor Brown … eliminate redevelopment agencies to save money.  But let’s do it in every state that authorizes these schemes.

Then support private property rights.  Glenn Reynolds says the rich and powerful don’t lose their homes because of eminent domain condemnations, but the less affluent and less connected sure do.