These sorts of land use restrictions should be illegal. It's basically a corporation trying to act as a pseudogovernment, enforcing regulations on land that they no longer own themselves.
One could argue that HOAs are kind of a similar issue, acting like a pseudogovernment, with restrictions on housing passing on down indefinitely, even to new owners who may not have wanted to agree to them (but with housing being as constrained as it is, you may not always have a realistic choice).
As a general rule, prior owners probably shouldn't be getting a say in what future owners do with land. Why? Because land is inherently limited in a way in which most other property is not, which reduces the ability of new entrants to 'disrupt' the market by offering people more choice.
If my town only has one car dealership with shitty business practices, no biggie, it's not too hard to go to another town and buy a car, then bring it back. But I can't buy land and bring it back to use it, I'm stuck with whatever's already there.
It seems they already are illegal, at least in some jurisdictions.
> "In June, for instance, Washington state Attorney General Bob Ferguson, who is also litigating against the merger, fined Albertsons $25,000 for imposing a land use restriction on a store it sold in 2018 in a low-income section of Bellingham, Washington. As part of the sale, the supermarket giant put a requirement on the deed that no grocery store could open there until 2038. Ferguson found this provision was a violation of the state antitrust law."
The fine imposed doesn't seem all that significant though.
Perhaps they could also be prosecuted under federal antitrust law?
That depends on which court ruled against Albertsons in the above case. Higher courts are under no obligation to honor a lower court’s ruling; they can and do overturn them.
> These sorts of land use restrictions should be illegal
An easier solution is mandatory sunsets after a period of time. Because the flip side of making them illegal is you'll have a lot more land with conservation easements being exploited for resources.
This kind of reminds me of when airspace was separated from Land property rights. There doesn't necessarily need to be any underlying logic or consistency, so a very tailored legal interpretation could be formed in theory.
That said, I think I'm much more practical solution is to focus on the buyer's rights and non-competitive behavior then limiting sellers rights. It makes intuitive sense that people would be able to option or sell indefinite use rights if they own the thing itself. It is less intuitive that individuals have a right to aggregate such options for Monopoly.
Now that I think about it, it seems there could be some comparison to the corner crossing cases that are being litigated too
I think a really natural solution would be to tax these sort of land restrictions for as long as someone is actually willing to pay. Just assess the value with the restrictions vs without and then tax it at the standard property tax rate. If nobody cares enough to pay for the restriction then it is lifted.
are you OK with charging apartment renters property tax in addition to the landlord?
On a more serious note, I think tax is a terrible solution. Who is going to value all of these use rights, restrictions, and options on an ongoing basis. Why punish everyone with any kind of good faith contract to deal with an extremely niche issue, which may not even be a problem.
Seems like the current solution is best. If someone is bothered, they can complain and the AG investigates. If someone is engaging in anticompetitive action, they get fined. It amounts to the same thing without screwing everyone over.
There's a reasonably simple change that would allow application of Harberger's taxes.
1. Restrictions have to have a "controlling party": a dedicated party that controls the restrictions and can agree to lift it. Classical example would be HOA, but it can also be a seller if they want to sell property with additional restrictions.
2. The controlling party sets the price of a restriction
3. Restricted party can remove the restriction paying price set in 2 to controlling part.
4. The controlling party pays tax as percentage of price set in 2.
> I.e. easements that come from law rather than seller stipulation?
A lot of convservation land in America is put under non-governmental easement [1]. The owner puts a restriction on the deed prohibiting development. They typically require emininet domain powers to be removed.
We can probably define a legal conservation easement as one that prevents further development on a piece of land, as opposed to regulating the uses and types of development.
There are a few historical types of deed restrictions that have been judged illegal and unenforceable. A corporation placing a deed restriction on a parcel to prevent competition with itself sounds like an illegal class of restriction
JumpCrisscross, what do you think of the suggestion elsewhere in this thread[1] to tax the value of that restrictive covenant/easement?
Only saw that idea just now and it seems interesting enough to investigate further. I'm not a tax guy though so don't know if I'm missing something obvious.
That is indeed a downside, but the expectation there should be that the government should be restricting resource exploitation where that's undesirable.
Yes. The contract you signed that restricts this commercial property in order to protect the seller's monopoly. Which is a conspiracy in restraint of trade.
Sure, but it’s a thing that you agreed to when buying the parcel, as part of the overall deal. If you didn’t want that restriction, you may have bid more to get the seller to give that up or you could choose not to buy under those terms.
We need to be careful here. Because we still want people to sell off potentially productive land. Lets say I buy two lots along a highway with growing traffic because I believe in the next 5-10 years it will be a good spot for a gas station/convenience store.
So now 5 years later the highway is developing and I build out my location. I decide I want to sell the other lot since I'm not going to build on it.
Now, I don't need to sell it. I could hold on to it, it's not that expensive to own. It would be a great spot for a fast food joint or what not. But I don't want to sell it to someone who immediately develops it as a gas station.
The public would benefit from developing the land - new services and more tax revenue. So it's in the public's interest for the owner to sell.
So you want to allow some amount of anti-competitive restrictions. I get not wanting permanent non-removable restriction.
There is an inordinate amount of our present economy that is, broadly speaking, anticompetitive.
The government has been mostly disinterested in pursuing antitrust actions for about half a century now, requiring very explicit evidence of very specific forms of price fixing by very unpopular companies to take any action other than blocking the largest of mergers.
Recent political changes over the course of the 2020's have started to change that, and these changes represent significant news relative to the situation for the past couple generations.
There is a difference with an HOA. The HOA can be removed if enough members agree. It's not a restriction added by a past owner that can't be removed by the current owner.
The problem is that anytime anyone tries to outlaw something, no matter how obvious and for the health of the market it may be, "capitalists" will crawl out for the woodwork to exclaim "this is the death of the free market!"
People do it here, constantly. Look at the FTC - they're charged with maintaining and enforcing a competitive free market. But when they make rules or prevent monopolistic mergers or anti-competitive contracts, conservatives and libertarians lose their minds.
There is no single state of capitalism. We should think of markets as a fluid mass filling the vessel that government provides. In some places these practices are allowed, and other places these practices are restricted - markets form elsewhere in those economies.
It's not really capitalism, but its late stage cancerous form, where businesses grow too big (too close to monopolies) and go unchecked, so the markets start to fail because the competition is killed.
I could be wrong, but I think property use restrictions are actually more of a socialist concept. When done right, they're meant to protect others (aka society, in general - not some businesses that don't like having competitors across the street) from various harms, such as emissions, noise, overcrowding or things like that. In other words, not about what goes on at some property, but what happens to the outside because of it. But as the uncontrolled abuse grew unchecked, it became something else entirely.
This stuff, together with non-competes and exclusivity agreements is something different. I don't know what it is, but it's neither capitalism nor socialism "as they were well-meant", but rather a weird amalgamation of perverted concepts from both, leading to both erosion of healthy markets (so, harming capitalism) and degradation of life quality (so, harming socialism).
Noncompetes are capitalistic. Property use restrictions aren't inherently capitalist but how they're used in most cases, particularly within the US, they almost always are.
Single family home zoning is the factor in bloated infrastructure and housing prices going up. This protects capital investment of a necessity which ensures exploitation of the working class.
capitalism is about competition and non-competes are literally named a "not gonna compete" agreement.
I don't see how's that capitalism at all. If Coca-cola and Pepsi signed a agreement not to compete that was made public, the FTC would go after them. If Microsoft made secret backroom deals that gave them an unfair advantage, the FTC would and did go after them. If you don't like competition, having the government come in and say you're the only one that can do that just isn't how American is supposed to work.
Non-competes are anti-capitalism and anti-American. That they're used against bartenders and restaurant servers is just gross.
Don't confuse free market and capitalism. They are operated at same time, but capitalism certainly does not have free market as end goal, it would much prefer to have total monopoly.
It is capitalism, and I think this is inherent in all stages of capitalism. The goal of any corporation is to maximize profit, period. In earlier forms, monopolists and oligarchs may have used different levers of power, but it’s all ultimately the same thing. Use whatever means are available to make profit.
The whole idea of "late stage capitalism" is leftist end times nonsense.
> where businesses grow too big (too close to monopolies) and go unchecked
By this reasoning, the Gilded Age was already "late stage capitalism", and yet somehow regulations were implemented and capitalism continued on, in a less shitty form.
It's literally just regulatory capture. It has nothing to do with capitalism.
In a truly capitalistic economy, there would be no regulations preventing competitors from coming in and creating competition. The propaganda doesn't have to be good when nobody understands what is and isn't capitalism anyways.
That’s correct: Albertsons is responsible for upholding the deed restrictions, and can use any legal means to do so. The regulators could have said that a monopoly has grown too big to enjoy good standing in court, but instead of that they chose a small fee.
You are incorrect. This has nothing to do with regulations.
It's the same as a farmer secretly buying up neighboring already irrigated fields from bankrupt farmers, and not planting on them in order to be able to raise the price on their own crops, assuming that the cost of importing the same crops from elsewhere is prohibitive and there is no other readily arable land nearby (thus they have a monopoly on the local market). So it's cheaper for them to leave the purchased fields fallow, and raise prices, than grow more crops.
This is the type of predatory capitalist practices for which we need regulation in the first place.
When the incumbent owns the vacant lot, it's capitalism. Free formation of contracts (saying you promise not to open a grocery store there, in exchange for getting the land at all) is also a big part of capitalism.
I'm having a hard time parsing what you mean. Are you saying "capitalism did it therefore this is good" and suggesting that people disagreeing are victims of "propaganda"?
How are HOAs any different than a city council, except on a smaller scale? In both cases they're democratically elected, and they enact restrictions that can't be opted out of.
HOAs often enacts rules that would be illegal for a city council to enact. (between the US constitution, US federal laws, State constitution, State laws, and county laws there are often strict limits to what can be done that HOAs are not effected by). Courts have reigned in some of that, but there is still a lot that a HOA can do.
HOAs also tend to be too small - it is hard to find someone qualified who wants to be in charge and so they are often forced to accept some busybody nobody really likes because at least that person wants the job. As you get larger you get a choice of qualified people for the job (but of course also large enough for corruption to take effect).
>HOAs often enacts rules that would be illegal for a city council to enact. (between the US constitution, US federal laws, State constitution, State laws, and county laws there are often strict limits to what can be done that HOAs are not effected by). Courts have reigned in some of that, but there is still a lot that a HOA can do.
Can you give some examples that are applicable today?
>HOAs also tend to be too small - it is hard to find someone qualified who wants to be in charge and so they are often forced to accept some busybody nobody really likes because at least that person wants the job. As you get larger you get a choice of qualified people for the job (but of course also large enough for corruption to take effect).
This might vary on a state by state basis, but there are some pretty "cities" in some states. In Florida, there are plenty with population in the hundreds. In some cases it's due to it being rural, but there's plenty of cases where the city is simply small. For instance: https://en.wikipedia.org/wiki/Briny_Breezes,_Florida
> Can you give some examples that are applicable today?
HOAs are pretty famously restrictive of free speech (house color restrictions, yard sign restrictions, political activism restrictions), and free association (visitor restrictions).
Their are some speech restrictions that governments apply to historic structures, but you would have a hard time as a government trying to register the name of every visitor to a residence, or restricting hours that visitors can come, or how long they can stay, but those are all things that HOAs try to control.
And have courts ruled that cities (or other governments) can't impose color restrictions?
>yard sign restrictions, political activism restrictions
Not sure what's meant by "political activism restrictions", but cities most definitely have restrictions on signs. You can't put a brightly flashing LED sign next to a busy intersection, or plant a billboard to make some money on the side.
>and free association (visitor restrictions).
???
I've literally never encountered this, unless you count having to register to use the visitor parking.
Here's a community that allows political yard signs, but limits their total aggregate area and how soon they must be removed after the election. http://caminovillage.com/pdfs/hoa-ccrs.pdf (bonus: you have to comply with the HOA rules when it comes to any window treatement that is visible from the front. They literally have rules about what they can see through your windows.)
To be fair, though, this thread is about things that HOAs can do but local governments can't, and local governments can and do ban short-term rentals in some places.
I moved to a home that's part of a small (47 homes) HOA.
Here, the visitor restrictions are aimed at commercial visitors. You're not supposed to run a business like a massage parlor or barbershop out of your home.
Hah, "small" -- my HOA consists of two condo buildings, seven units total. We basically have to beg three people to fill out the required three board positions every year, because no one (myself included) wants to do it.
A friend of mine is a member of a little HOA that consists only of himself and his downstairs neighbor.
This is what you have to do to fix a roof or replace a hot water heater. Gen-X has observed what happens when an HOA is dominated by, for example, descendants of the original landowner. It takes someone with organizational skills to help the public good by joining a toxic HOA with the intent of shining sunlight on it.
Cities also have to adhere to cottage laws - it's perfectly legal and protected to run a small business out of your home. Unless the HOA says no. This isn't a power the city has.
I'm very handy, so she has me do things around the house. I don't charge for labor, because she's family and because her hatred for the HOA is only surpassed by her hatred for the geese so it's hilarious.
Also I'm sneaky as all get out. I'm not sure she has figured it out yet.
My HOA is worded such that it must exist for at least 30 years and there are no facilities to dissolving it before that time (after that time, a simple majority can vote to dissolve it, so long as the city agrees to incorporate the land and infrastructure). In this case, it's because the HOA is responsible for the loans taken out and long term leases to manage the sub division's infrastructure.
> My HOA is worded such that it must exist for at least 30 years and there are no facilities to dissolving it before that time
Technically, there are. Lack of an explicit termination clause doesn't mean an agreement can't be terminated. But the party that would object to that termination is the lender. If you had their sign off, you could dissolve the HOA today.
I was assuming that too. At the very least, the CC&Rs/by-laws could be amended to remove that clause. But, right, presumably the lender is a party to the agreements with enough power to vote down that change.
If a deer walks through your yard and poops in it do you go out there and pick it up? Like these are wild animals, they aren't talking about a someone raising geese or something. Wild animals poop, it will quickly disintegrate into the soil. At worst you might run a lawn mower over it to spread it out better.
The HOAification of America has gone too far. There are some places where it's hard to find a home not subject to a HOA. I don't think "well live somewhere else" is a reasonable answer to that complaint. That's definitely a "I got mine, so eff off" sort of response.
Only in newly built out places that didn't have preexisting and sufficiently expansive local governments that could be utilized for such tasks. Those municipalities simply passed local ordinances, many/most of which are still on the books and continue to be used for arbitrary enforcement exactly as envisioned the better part of a century ago.
Quality of your life depends not only on your house but also on houses around you. When I go out, I want to see nice, well maintained houses with no garbage outside. What happens without HOA in low middle class and poor areas are broken cars, garbage everywhere and unkempt lawn. In wealthy neighborhoods you generally do not need HOA as people maintain their property on their own.
We were house-shopping a bit ago, and at one place while the realtor was showing us around there was a knocking at the door. The realtor answered it, and it was an older man, a neighbor, saying that one of our cars was partly off the pavement and on the gravel in the driveway, and that it wasn't allowed. We needed to move our car, we were breaking the rules.
Realtor looked at us. "You're probably not interested in this house, right?" Nope. She read us right. We would never live in a place under the thumb of an HOA.
Goose poop is not very smelly since it's mostly fibre from their all-grass diet. It's not like a backyard full of dog poop. It's no worse than applying manure to fertilize the soil.
Source: I've stepped in goose poop many, many times up here in Canada and it's the least bad poop to step in.
I don't understand why people believe their standards should apply to other people's property. I don't get why you simply being near them in proximity means you believe you're entitled to control over their land.
We've let residential property as an investment go waaaaay too far. And now we have little suburban dictators running around everywhere enforcing whatever the fuck they want, to protect their investment.
I live in rural America specifically because I can do whatever I want to with my property without some retired busybody up my ass.
Spoiler: my property isn't a mess and the house is well kept. Because it's better for me that way. But I can also build a small shed if I feel like it without worrying about other people. And I can pee outside on a tree. That's a bonus as well.
> The HOA fined them before they moved into the house for having goose poop in their back yard.
It's not as dramatic as it sounds. the house was owned by _someone_ before they moved in. at _some_ point the guano was left and the HOA found it (whether that alleged violation cited done in a good-faith effort is irrelevant). The HOA applied their process, and at _some point_ ownership changed. Leaving your sister with the bill, which she is probably able to recover from the previous owners.
HOA's are agreed to by the owners and they preserve the value of everyone's property and enforce common decency. (no trash, overgrown yards, RVs parked). I own a house under HOA and I get a letter or two per year about leaving the garage door open or the trash cans out too late. It's not a big deal and the neighborhood stays beautiful and desirable.
> Leaving your sister with the bill, which she is probably able to recover from the previous owners.
That depends, really. If the unpaid HOA fine was disclosed during the buying process, and the buyer didn't make it a condition of sale that the seller had to cover it, then the buyer is responsible. If the seller didn't disclose it, then the buyer can of course sue the seller, but depending on the magnitude of the fine, it might be easier and less stressful to just pay it.
> HOA's are agreed to by the owners and they preserve the value of everyone's property and enforce common decency.
In theory, yes. In practice, many HOAs are full of busybodies who enjoy the power trip and love to meddle in how other people live their lives. Even in the absence of that, like any institution, the people who are a part of them and subject to them often disagree on the fine details. For example, I'm not convinced it's fair that an elected board of homeowners gets to decide things like what color the curtains on the inside of your windows facing the street are allowed to be. But many HOAs have restrictions on that. I suspect you might think that such a restriction is fine, but that's exactly the point I'm trying to make: people don't always agree, but everyone ends up being subject to whatever the board/majority decides. I don't think we should allow these mini-governments to be able to enact property restrictions that actual governments wouldn't be allowed to do.
My latest fun letter from our HOA was that the paint on some air vents on our roof had faded and no longer matched the color of the roof, and we'd be fined if I didn't have them repainted. What a huge waste of time and money, both for me and for whatever busybody was paid (yes, paid) to drive around the neighborhood looking for these things.
As an amusing aside: not long ago I read of a case where a homeowner had been parking his boat in his driveway for some very long time (like more than a decade), but suddenly the HOA decided to enforce a provision about that not being allowed. Boats had to be put behind some sort of opaque fence or partition, so they're not visible from the street. So he built the fence, parked his boat behind it, and had an artistic neighbor friend paint a mural... of his boat... on the outside of the fence. Loved that.
But other HOAs pave the roads, chlorinate the water, and put out the fires. And decide how to pay for that. It’s a power vacuum that attracts busybodies when the responsibility is fading paint, but sometimes an essential component of property value.
> between the US constitution, US federal laws, State constitution, State laws, and county laws there are often strict limits to what can be done that HOAs are not effected (sic) by
HOAs cannot enforce rules that conflict with State or Federal law or the Constitution.
HOAs often restrict freedom of expression which would not be legal if done by a city government.
The first amendment, however, only protects against government censorship, not private organization censorship so an HOA can force you to paint over the mural on your garage whereas a city government could not*.
Some of this depends on state of course. California, for instance, recognizes HOAs as quasigovernments which imposes some restrictions on an HOAs power to censor speech, but many other states do not.
* Case law on this is actually quite minimal. Local governments do try to ban free speech of course and almost certainly overstep their bounds, but no one has gotten a case to the Supreme Court.
> an HOA can force you to paint over the mural on your garage whereas a city government could not*.
Zoning ordinances (which are the closest analogy to HOA CC&Rs) restrict all sorts of expression but have been held lawful as long as they can be characterized as a time/place/manner restriction. See https://firstamendment.mtsu.edu/article/zoning-laws/ for a pretty good case law overview.
So, dumb question / political hobby horse riding in: if neighborhood restrictions on political speech are considered a time/place/manner restriction, why doesn't that logic also foreclose the majority opinion in McCutcheon v. FEC[0]? How are campaign contribution limits not a time/place/manner restriction?
If money is speech, then me giving a million dollars to a Senator should be analogous to me with a megaphone shouting down anyone who disagrees with me until their eardrums bleed.
[0] The Supreme Court case that invalidated campaign contribution limits and foisted SuperPACs upon us.
Giving money to a person, by itself, doesn’t raise the same sort of immediate quality of life concerns (“quiet enjoyment”) as having someone shout through a megaphone into your ear.
Also, core political speech (and its financing, subject to concerns over corruption) such as electoral or issue advocacy is considered sacrosanct by the American legal system and so government prohibitions on it will receive significantly stricter scrutiny.
HOAs are a creature of state law and only have power to the extent state law confers it. They are not voluntary associations of the sort contemplated by the First Amendment. You can't choose to join an HOA unless you own land that belongs to it, and you can't choose not to be a member when you acquire a property.
Background: Washington, D.C. is not a state and in theory the US Congress performs state legislative practices for it. In practice, Congress has devolved civil policy to a mayor and devolved state court functions to a superior court.
Purple door disputes wouldn’t be a Federal issue, but one of the D.C. superior court. The Feds have only intervened four times, and it was over much bigger features than HOAs. And the Supreme Court has actively closed loopholes where local issues relevant to any other state could become Federally interesting.
Of course they can . . . because it's a "private association," which end-runs the whole idea of constitutional rights, which are designed to limit the power of government. Catholic associations don't have to admit non-Catholics, sororities don't have to admit men, etc. HOAs bastardize this by being "private" organizations that are fulfilling quasi-governmental-at-best roles.
HOAs are a creature of state law and only have power to the extent state law confers it. They are not voluntary associations of the sort contemplated by the First Amendment. You can't choose to join an HOA unless you own land that belongs to it, and you can't choose not to be a member when you acquire a property.
Yes, many HOAs have rules against political signage. This is blatantly a first amendment violation, but since they're technically a private organization, they can do that.
It depends on the state. Many states restrict HOAs from promulgating or enforcing rules about political speech. For those that don't, and where an HOA goes overboard in enforcement, I would very much like to see the case tried in Federal court. A proper ruling on the Constitutionality of certain HOA covenants is long overdue.
They’re not, but I bring them up as mechanisms of how the state or smaller localities can prohibit or restrict a lot of uses of property without raising constitutional concerns. As a general rule, if the state can lawfully restrict certain activities, HOAs can, too.
Some states require HOA disputes to attempt mediation, or mandate arbitration, before going to superior court. So I think you’re right, except in a technical or monetary sense.
State law enforces age restrictions on property in many circumstances. Adults can’t enter school property without registering with the main office. State law prohibits entry into bars and cannabis shops for people under certain ages. State law can prohibit minors from entering adult-oriented shops.
The basis of HOAs is a history of racial covenants. While facially racial covenants are illegal, the enforcement of HOA restrictions is based in racism so the entire concept is rotten to the core.
Nonsense. Theological concepts of original sin don't apply to contract law. Just because there were racist HOAs in the 1950s or whatever doesn't mean a new HOA is tainted. You're not even trying to make a logical argument
One could argue that HOAs are kind of a similar issue, acting like a pseudogovernment, with restrictions on housing passing on down indefinitely, even to new owners who may not have wanted to agree to them (but with housing being as constrained as it is, you may not always have a realistic choice).
As a general rule, prior owners probably shouldn't be getting a say in what future owners do with land. Why? Because land is inherently limited in a way in which most other property is not, which reduces the ability of new entrants to 'disrupt' the market by offering people more choice.
If my town only has one car dealership with shitty business practices, no biggie, it's not too hard to go to another town and buy a car, then bring it back. But I can't buy land and bring it back to use it, I'm stuck with whatever's already there.