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> In short, if private property has absolute veto power, you can never get big public projects done. (This is why eminent domain exists) I wish they'd modify t

> In short, if private property has absolute veto power, you can never get big public projects done. (This is why eminent domain exists) I wish they'd modify the language of eminent domain to reward double, triple or even quadruple market rate. I want people being _happy_ to have their property seized.

scarface74 5y ago
What happens historically that if a government has a choice between destroying wealth in a minority neighborhood or destroying wealth in a non minority neighborhood, it’s usually the minority neighborhood.
rootusrootus 5y ago
Given how the sheer amount of money wasted when even one property owner holds out, it shouldn't be terribly difficult to justify a serious premium on the amount paid to those whose property is seized. In most cases I imagine it's just a small part of the overall cost of the project.
icelancer 5y ago
Exactly. "Market rate" is ridiculous, and justifiably private property owners should be able to hold out sine market rate doesn't factor in switching costs, both financial and emotional. I think 3x market rate is a decent starting place.
- notreallyserio 5y ago
  I think the amount paid should be based on the average market rate of properties where the person must move to have the same commute and amenities. If the government wants to destroy the poorest area, at least folks there can move somewhere nicer without much inconvenience.
BHSPitMonkey 5y ago
This would be a great way for corrupt politicians to funnel large sums of real estate money to their friends and donors (or to trigger wild speculation bubbles anywhere people think eminent domain is likely to be applied). I do think these payouts need to be well in excess of market rates (in order to properly compensate people for inconvenience / related expenses / opportunity costs, but tripling or quadrupling property values is a bit far fetched.
- tinco 5y ago
  You could make it conditional on some things. The goal is to compensate for discomfort, not to compensate lost income. So you could say you only compensate primary residences and self operated businesses, both occupied for 3+ years. Or you could approach it from a different angle and compensate each resident and business operators with $10,000 relocation cost (in addition to buying their property with a 5% extra). That has the added benefit of eliminating more of the market price risk from projections.
  - datavirtue 5y ago
    I think the optimal course is to have a very painful eminant domain process that pays a crappy above market rate so that government is incentivized to offer actual market rate (big project wants your land so market rate is vastly increased as a result). I have seen corn fields sold for millions because a state college wanted it for a new campus. The market rate was well under $1MM. For that land eminant domain would have been a nightmare because of the particular politics and unimproved nature of the site....so they had to offer actual market rate...which is the rate demanded of someone when they know it's a monied developer that wants it.
- technobabbler 5y ago
  Whatever, pork-barrel corruption is already an everyday part and parcel of our system. Paying 2x-4x for some piece of land is still waaaaaaaay cheaper for society than drowning in decades-long quagmire while infrastructure falls apart everywhere. Any time you have a massive building project you're going to get corruption. If you can't even eminent domain it through useful areas, you're just going to get developers buying land in the middle of nowhere and selling it back to the government as the only remaining viable route.
  - randbox 5y ago
    >Paying 2x-4x for some piece of land is still waaaaaaaay cheaper for society than drowning in decades-long quagmire while infrastructure falls apart everywhere. Eminent domain is not only used to acquire owner occupied homes for infrastructure. In some cities it is used to purchase poorly maintained properties from slumlords. Landlords get what rent they can and don't invest anything in upgrades because they know they can cash out with the city government or public land bank. Promising to pay 2-4x may make the problem worse. If a building is nearly fully depreciated, and has $0 building value, and the landlord invested closed to $0 in maintaining it, but the land is worth $200K, why should they get 4x whatever they claim the gamed comparables are and $800K from the public for doing nothing? Maybe 150% of the building replacement cost for owner occupied homes makes sense, but ideally absentee investors holding depreciated properties and vacant lots wouldn't get paid a dime for the land value.
zdragnar 5y ago
That is an incredibly easy way to waste money. Political donor: Hey Mr. Politician, I am going to buy some massive apartment complexes. Do me a favor and put a road through them, would you? Politician: Sure thing, there's an election coming up and I do so love helping out our citizens! holds out hand to receive wads of donations
- p20z 5y ago
  The current model enables the same behavior and makes it harder to track. Stalled projects have ongoing costs that make the project developers real money in exchange for no real effort. The same donor simply says “hey mr politician, give my company the exclusive contract and never mind that my aunt owns a building in our way. I’ll only charge you 30% for each year we are stalled.” We burn money on these projects either way. A good windfall to property owners gives regular families a chance at enjoying some profits… and makes donors who block progress just a little easier to track!
- technobabbler 5y ago
  This is in fact how many projects get built today, even without eminent domain.
  - zdragnar 5y ago
    If graft is a problem, the answer should not be "make graft easier and more common"
    - technobabbler 5y ago
      Graft is just one problem out of many though. Lack of public investment in public institutions, I'd argue, is another, bigger problem. I'd like to see graft tackled by more competitive elections (multi-party, ranked-choice, easier voting processes, etc.) rather than simply gutting the government so it can't do anything at all... I think the conservatives call that starving the beast? https://en.wikipedia.org/wiki/Starve_the_beast https://en.wikipedia.org/wiki/Starve_the_beast That just puts government in a death spiral and drags huge swaths of society down with it. By comparison, a small degree of graft is an inefficiency inherent in any large organization. As a taxpayer or customer, it doesn't necessarily matter to me whether $20 of my $100 goes to a politician's vacation home or the CEO's yacht, as long as the shit gets built effectively. If it gets to $50 or $80 of that $100 though... yeah, shit's broken.
IggleSniggle 5y ago
Don’t want them to be TOO happy to have property seized. Creates a bunch of perverse incentives

scarface74 5y ago

What happens historically that if a government has a choice between destroying wealth in a minority neighborhood or destroying wealth in a non minority neighborhood, it’s usually the minority neighborhood.

rootusrootus 5y ago

Given how the sheer amount of money wasted when even one property owner holds out, it shouldn't be terribly difficult to justify a serious premium on the amount paid to those whose property is seized. In most cases I imagine it's just a small part of the overall cost of the project.

icelancer 5y ago

Exactly. "Market rate" is ridiculous, and justifiably private property owners should be able to hold out sine market rate doesn't factor in switching costs, both financial and emotional. I think 3x market rate is a decent starting place.

notreallyserio 5y ago
I think the amount paid should be based on the average market rate of properties where the person must move to have the same commute and amenities. If the government wants to destroy the poorest area, at least folks there can move somewhere nicer without much inconvenience.

BHSPitMonkey 5y ago

This would be a great way for corrupt politicians to funnel large sums of real estate money to their friends and donors (or to trigger wild speculation bubbles anywhere people think eminent domain is likely to be applied). I do think these payouts need to be well in excess of market rates (in order to properly compensate people for inconvenience / related expenses / opportunity costs, but tripling or quadrupling property values is a bit far fetched.

tinco 5y ago
You could make it conditional on some things. The goal is to compensate for discomfort, not to compensate lost income. So you could say you only compensate primary residences and self operated businesses, both occupied for 3+ years. Or you could approach it from a different angle and compensate each resident and business operators with $10,000 relocation cost (in addition to buying their property with a 5% extra). That has the added benefit of eliminating more of the market price risk from projections.
- datavirtue 5y ago
  I think the optimal course is to have a very painful eminant domain process that pays a crappy above market rate so that government is incentivized to offer actual market rate (big project wants your land so market rate is vastly increased as a result). I have seen corn fields sold for millions because a state college wanted it for a new campus. The market rate was well under $1MM. For that land eminant domain would have been a nightmare because of the particular politics and unimproved nature of the site....so they had to offer actual market rate...which is the rate demanded of someone when they know it's a monied developer that wants it.
technobabbler 5y ago
Whatever, pork-barrel corruption is already an everyday part and parcel of our system. Paying 2x-4x for some piece of land is still waaaaaaaay cheaper for society than drowning in decades-long quagmire while infrastructure falls apart everywhere. Any time you have a massive building project you're going to get corruption. If you can't even eminent domain it through useful areas, you're just going to get developers buying land in the middle of nowhere and selling it back to the government as the only remaining viable route.
- randbox 5y ago
  >Paying 2x-4x for some piece of land is still waaaaaaaay cheaper for society than drowning in decades-long quagmire while infrastructure falls apart everywhere. Eminent domain is not only used to acquire owner occupied homes for infrastructure. In some cities it is used to purchase poorly maintained properties from slumlords. Landlords get what rent they can and don't invest anything in upgrades because they know they can cash out with the city government or public land bank. Promising to pay 2-4x may make the problem worse. If a building is nearly fully depreciated, and has $0 building value, and the landlord invested closed to $0 in maintaining it, but the land is worth $200K, why should they get 4x whatever they claim the gamed comparables are and $800K from the public for doing nothing? Maybe 150% of the building replacement cost for owner occupied homes makes sense, but ideally absentee investors holding depreciated properties and vacant lots wouldn't get paid a dime for the land value.

zdragnar 5y ago

That is an incredibly easy way to waste money. Political donor: Hey Mr. Politician, I am going to buy some massive apartment complexes. Do me a favor and put a road through them, would you? Politician: Sure thing, there's an election coming up and I do so love helping out our citizens! holds out hand to receive wads of donations

p20z 5y ago
The current model enables the same behavior and makes it harder to track. Stalled projects have ongoing costs that make the project developers real money in exchange for no real effort. The same donor simply says “hey mr politician, give my company the exclusive contract and never mind that my aunt owns a building in our way. I’ll only charge you 30% for each year we are stalled.” We burn money on these projects either way. A good windfall to property owners gives regular families a chance at enjoying some profits… and makes donors who block progress just a little easier to track!
technobabbler 5y ago
This is in fact how many projects get built today, even without eminent domain.
- zdragnar 5y ago
  If graft is a problem, the answer should not be "make graft easier and more common"
  - technobabbler 5y ago
    Graft is just one problem out of many though. Lack of public investment in public institutions, I'd argue, is another, bigger problem. I'd like to see graft tackled by more competitive elections (multi-party, ranked-choice, easier voting processes, etc.) rather than simply gutting the government so it can't do anything at all... I think the conservatives call that starving the beast? https://en.wikipedia.org/wiki/Starve_the_beast https://en.wikipedia.org/wiki/Starve_the_beast That just puts government in a death spiral and drags huge swaths of society down with it. By comparison, a small degree of graft is an inefficiency inherent in any large organization. As a taxpayer or customer, it doesn't necessarily matter to me whether $20 of my $100 goes to a politician's vacation home or the CEO's yacht, as long as the shit gets built effectively. If it gets to $50 or $80 of that $100 though... yeah, shit's broken.

IggleSniggle 5y ago

Don’t want them to be TOO happy to have property seized. Creates a bunch of perverse incentives