4 ms·

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

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.
  - technobabbler 5y ago
    Because otherwise it'd be a case of the perfect being the enemy of the good? That scenario would happen anyhow even at market rate. As a taxpayer I'd rather see some money wasted, and some progress being made, rather than nothing getting done ever. Corruption and waste are tolerable to some degree, IMO. "Government wastefulness" is too often code for not letting the government do anything at all. I just don't think our current societal bottlenecks are due to a budget or GDP crisis. There is so much wealth locked away, I'd rather it be spent on public works even if it means losing a few cents on the dollar to corruption along the way. It's not like the private sector is risk free, or that the government doesn't waste money on wars and questionable foreign aid already. There is such a backlog of infrastructure to build, whether roads and bridges or prisons and schools and climate change mitigation or renewables or nuclear... we gotta do something about that. If that means a slumlord getting rich, I guess it's a cost of doing business? Or what's a better alternative?
- DennisP 5y ago
  I used to know a former state senator, who would say "the road to riches in this state is cheap land and cheap politicians." She had a background in forensic accounting, was instrumental in getting a particular state senator convicted of corruption, and lost the support of the state party in the process.

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.
- technobabbler 5y ago
  Because otherwise it'd be a case of the perfect being the enemy of the good? That scenario would happen anyhow even at market rate. As a taxpayer I'd rather see some money wasted, and some progress being made, rather than nothing getting done ever. Corruption and waste are tolerable to some degree, IMO. "Government wastefulness" is too often code for not letting the government do anything at all. I just don't think our current societal bottlenecks are due to a budget or GDP crisis. There is so much wealth locked away, I'd rather it be spent on public works even if it means losing a few cents on the dollar to corruption along the way. It's not like the private sector is risk free, or that the government doesn't waste money on wars and questionable foreign aid already. There is such a backlog of infrastructure to build, whether roads and bridges or prisons and schools and climate change mitigation or renewables or nuclear... we gotta do something about that. If that means a slumlord getting rich, I guess it's a cost of doing business? Or what's a better alternative?
DennisP 5y ago
I used to know a former state senator, who would say "the road to riches in this state is cheap land and cheap politicians." She had a background in forensic accounting, was instrumental in getting a particular state senator convicted of corruption, and lost the support of the state party in the process.