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Wednesday Morning Rant

The Road is Long

When a government steps onto the road to expropriation of property, it is often a long journey. While the grand, fast expropriations of communism in various forms are certainly real, this method is not preferred by those who wish to boil the frog. A long, slow erosion of property rights and the gradual muscling out of former owners in favor of the state or state-connected cronies is much preferred.

Property taxes and regulation are the obvious examples of this. Just keep pushing on the tax rate. Impose new taxes. Drive taxes inexorably higher every year, until the owners cry uncle and sell. Who gets the property in the sale? People who can afford those high taxes - or who have friends in government who can get them abatements. The former owners get to become renters. If the taxes don't do it, the regulations may. Pass as many rules as possible. Restrict how people use property. If you're truly skilled like California is, make insurance impossible, too. Drive down utility and drive up liabilities until the appeal of ownership vanishes. Sell it off, and get out of the way of the state and her cronies.

I saw two examples of this kind of progression recently, one more subtle than other. The subtle example is old (though new to me) and comes from California. In 2014 and in the midst of a drought, California passed the "Sustainable Groundwater Management Act" (SGMA), which reclassified water rights. Water rights stopped being a thing as such, with groundwater recast as a "shared resource":

The law asserts that groundwater is a shared resource. While it upholds a farmer's right to pump, it imposes rules on its use. For the first time in California history, managers of the state's 140 most overdrawn groundwater basins must balance the amount of water being pumped from, and recharged into, aquifers by 2040. It allows increased pumping during drought only if no major problems result.

With old water rights (or at least standards and practices governing use) gone and water now community property by law, then came the metering of once-private - and still privately-maintained - wells. Then in 2021, as predictable as the sun rising in the east, came the billing:

Growers are billed $246 an acre-foot, the equivalent of an acre of water one foot deep. In four years, (that's this year, and how I learned about it. -ed) fees will jump to $346. Those who allow their property to be flooded with stormwater, helping replenish the aquifer, can earn rebates. The agency also offers inducements, such as efficiency gadgets and incentives to fallow land.

A handful of farms have refused access; their bills are estimated, with stiff penalties added.

Of course. Compliance and the stiff penalties are the point. That and driving agriculture out of business, of course. And fees, as always, continue to rise.

I am originally from Colorado and understand the perils of not enough water. Water can indeed be a "shared resource" and water rights are therefore a ruthless and cutthroat battleground - sometimes literally. The laws are often arcane and puzzling it out can be extremely difficult. But not even Colorado went so far as to just declare that water rights don't exist. It isn't as far along the road as its colonial master is.

Another is so-called "ghost taxes." What is a ghost tax? Also called a "vacant home tax," a ghost tax is an explicit attempt to force owners to sell by making taxes onerous:

These kinds of taxes or fees are imposed on landlords whose properties are vacant and not rented for an extended period of time- typically about six months.

They are used as a tool in a handful of American cities and Canada to encourage property owners to rent or sell their homes and thereby increase the stock of affordable housing.

This article is about Denver, but they aren't the only ones pursuing it. San Francisco tried a version of it (deemed unconstitutional), Oakland and Washington DC have versions of it, Honolulu is also floating the idea, and various foreign cities have equivalents.

In explaining the vacant home fee proposal, Alderman said, "We want to encourage landlords to lower their rents on units that are sitting vacant while people are living outside. Is there a way to incentivize that lowering of rent so the working-class folks and the people experiencing homelessness in Denver have a chance to get into a rental unit? I think vacancy fees might be a way to think about that," said Alderman. "This is one potential option of many that we think is worth exploring."

"I don't think it's unreasonable to ask the housing community, when they have empty units for long periods of time, to consider making those units available to lower-income households," said Alderman.

You're not proposing to "ask." You're proposing to compel by means of extortion. Call it what it is, Ms. Communist. Even if we assume that landlords holding out on price cause street-level vagrancy (they don't), this wouldn't do a thing to fix it. Even in the ideal scenario where rents are all slashed immediately and vacancy falls to zero, it would do nothing to reduce vagrancy. But that won't happen, and it isn't supposed to. That isn't the point. This has nothing to do with vacancy rates and everything to do with extracting cash and forcing sales - sales to those who meet with Ms. Communist's approval.

Waving away water rights, assessing "ghost taxes," driving up liabilities and countless other approaches are all steps down the road of expropriation. The rubes can't be having property. That's only for the politically connected.