3 ms·
The government's "market prices" and the real value of a property are two totally different things. There is downward pressure to keep the government assessment
by deelowe 13y ago
The government's "market prices" and the real value of a property are two totally different things. There is downward pressure to keep the government assessments low due to property taxes. Where I live, for example, the prices are generally off by a good -10% to -20%. Then you have to add interest, closing costs, escrow, and establishment of utilities on top of that.
You also have to factor mobility into the equation. If I own property that I'm using for a special purpose (let's use an extreme example of a hazardous chemical disposal company), and I'm told to relocate for the "market price" of my property, then I'm stuck paying tons of money and dealing with regulatory hell in whatever I choose as my new jurisdiction to do this. This would quite literally put me out of business due to the insanely high cost of relocating everything.
Also, you have the legal roadblocks that often come up (this is the more common reason property can't be acquired). For example, the property might be owned by a trust, which was granted it's powers through a will. Since it's a trust, the beneficiaries are unknown. The person who maintains the trust isn't returning your calls. Who do you write the check to? You can't just take it from the trust, it doesn't work that way (for good reason, without getting into specifics). There are ways to go about it, but the legal proceedings can take years. We're actually dealing with this exact problem now trying to expand an intersection in my local town.
Unfortunately, it's not as simple as just buying the land/structure and moving the occupants. More often than not, there's a reason why this is difficult.
- mapt 13y agoIt seems like the price of the various measures that avoid invoking eminent domain ends up being so extraordinarily high (hundred-million-dollar bridge trusses and the like), I do not quite understand why offering market plus 100% or something isn't a solution. Not an extortionate rate, but one sufficient to make it a financially favored course of action for all involved landowners. Eminent domain is for the irrational holdouts, not for "offering pennies on the dollar" as opponents say, or for getting just-slightly-submarket-prices.
- gizmo686 13y agoThe problem is that the only people who can say how much money is necessary is the landowners themselves. However, they have an incentive to lie if doing so would allow them to get a higher price. Additionally, different landowners would value their own land at a significantly different rate relative to the market. For example, if you live in a custom built house, with a treehouse that your kids built themselves, that is within walking distance to the school and your place of work, you would need significantly more compensation them most people to move out of your house. I don't see any solution other than letting cases where an agreement cannot be reached go to court.
- mapt 13y agoThere are three people are well-placed to say how much money is 'market value': 1) The owners themselves, by self-declaring asset values for taxation purposes (on pain of having them vulnerable to eminent domain seizure if they under-declare) 2) Independent assessors who do value assessment for property tax purposes already 3) The sellers that granted the owners possession for a certain value