Archive for November 25th, 2009

But At Least You Keep It If You Keep Making the Payments

At least we don’t have New York’s or Connecticut’s problem.  The New Jersey Nets and associated developers have apparently won the right to take someone else’s property for their own use.  Yes, it has to pass through the hands of the State of New York first.  But the State Supreme Court has rules that New York can declare Atlantic Yards blighted, pay off the owners at some price the state determines, and turn the land over to developers for a new arena for the New Jersey Nets, as part of a mixed-use commercial and residential development.  (That prize of a franchise, by the way, has opened the season 0-153.)

Remarkably, the Court declared that this was an act of judicial restraint, arguing that it was bound by the definition of “blight,” which was completely under the control of the legislature.  As with the property in Kelo, the development may not even go forward because of financing.  Some parts of the project have already been delayed or canceled because of the economy.  The bonds must be issued quickly in order to qualify for certain tax breaks.  The article is silent on whether or not the property will be condemned and transferred before the necessary development bonds are issued.

I have no particular opinion on whether the development would be good or bad for Brooklyn.  Certainly, it’s better to finance this sort of thing privately rather than publicly.  The history of sports arenas and their surrounding neighborhoods is mixed, with football stadiums being about the worst, and shared basketball-hockey arenas doing the best.  Coors Field helped revitalize Lodo here in Denver, and the MCI Center (now the Verizon Center) has been a boon for a truly blighted area, downtown Washington, DC.

What’s at issue here is the sanctity of personal property.  Aside from the ideological obscenity of taking your property to give it to someone else for their financial benefit, there’s the overall legal and investment environment that’s created when people don’t really own property that they believe they own.  That sort of uncertainty has got to limit people’s willingness to invest in their land.  And of course, it almost always results in a transfer of property from the less-well-connected to favored groups.

One footnote: this is the same property that the City of New York, in the person of Robert Moses, refused to use eminent domain for in order to build a new stadium for the Dodgers.

Here’s where you can find a map and  photos of the area.

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Mortgages in Colorado

For a long time, we’ve been hearing about how the housing market in Colorado isn’t as bad as in the rest of the country, and there’s some truth to it.  We’re routinely at or near the top of the Case-Shiller index, and foreclosures have tended to lag behind the rest of the country.  But there may be some serious trouble on the horizon.  According to a study in yesterday’s Wall Street Journal, almost 25% of US mortgages are underwater.  That’s not 25% of homeowners, since those without mortgages by definition aren’t underwater, but it’s still a pretty serious number.

Colorado does not fare particularly well in this survey.  While the national average is 23%, 19% of Colorado mortgages are underwater, good for 11th in the country.  An additional 7.8% of Colorado’s mortgages are with 5% of being underwater, 2nd-worst in the country.  With a loan-to-value ratio of 72%, Colorado is 9th-worst in the country.  (The worst in that category is Harry Reid’s own Nevada with a staggering 114% loan-to-value ratio, 23 percentage points worse than 2nd-place Arizona.)

So obviously, Gov. Ritter, the legislature, and the state Supreme Court thing that the right thing to do is to raise property taxes on these homeowners who are already going to have cash flow problems.

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Politicos In Training

This afternoon, I had a chance to tour the YMCA’s Youth In Government program in action.  This week is their annual mock state government here in Denver, and none other than the Governor himself, Dalton Curry, showed me around.  Rep. Ellen Roberts had mentioned her support of the program when we interviewed her on the RMA’s Blog Talk Radio show.  The students model the whole legislative process, from committee work to floor sessions, with a Supreme Court to rule on Constitutionality.  From what I heard and saw, they took it pretty seriously, from drafting bills to the floor debate.  They get to meet in the actual committee rooms, the actual Senate and House chambers, and the Supreme Court meets in the Old Supreme Court Chambers.

At the end of the session, the delegates elect the officers for the following year, including the governor and lt. governor, which makes it more of a parliamentary system, I suppose.

Back in high school, when I still thought the UN was worth something, I participated in the Model UN program.  This seems to be a more worth endeavor.

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