The Government takeover of Real Estate is well underway

by Al Lorenz

Realtor, Media Mogul

Author website

Earlier, there was a discussion of the possibility of a government takeover of real estate brokerages. We had a bit of a lively discussion about the possibility of a governmental takeover of real estate brokerages.  But I’m here to tell you, it will never happen because in the end, the government will have no need for brokerages.

The government takeover of all real estate is already pretty far along.  Growth management, shorelines management, local municipalities, county, state and federal regulations have all taken unprecedented freedoms from landowners and redistributed them to government in the name of the “public.”  Many cities’ zoning codes are in the process of not only defining what uses to allow for land in their jurisdictions but they are implementing design standards that strictly control how such structures must look.  In the county that I live, government already owns 88% of all the land and that percentage is increasing.

Oppressive property taxes in many areas are themselves rent on the land from the government who believes itself to be the true owner.  Don’t pay those taxes and you quickly find out who really owns the land.  Generally based on assessed valuation, property taxes in periods of increasing value are a tax on an unrealized gain to the property title holder who is then taxed on the gain, as both a capital gain and an excise tax, when it is realized.

You may remember a Supreme Court ruling in Kelo vs. City of New London in 2005 that greatly expanded eminent domain to include seizure of privately owned property for redevelopment and resale to other, more politically favored, private owners or developers!  Since that ruling governments can, and have, taken private lands for any reason, including simply selling them to preferred private owners.

The drumbeat continues.  The new Secretary of Housing and Urban Development is using Fair Housing laws as justification for new requirements he is placing on cities and developments to provide diversity of housing to obtain a “fully integrated society.”  “New Urbanism” and “Smart Growth” are simply terms for the latest planning fads of social engineering under the guise of “public” planning.  They purport to know how better to arrange a property owner’s options on how they use their property than their owners would themselves.  In the name of affordability, limiting sprawl and reducing carbon emissions they increase property prices, create sprawl and increase carbon emissions.

We have housing authorities that are quasi governmental bodies who live off state and local taxes and funding from the Department of Housing and Urban Development that simply take tax money taken from some people and dole it out as rent payments or as subsidized housing to others, while skimming the cookies for themselves.

Do not be surprised there are those amongst us those who claim that housing is health care and should be a “right” provided by government as well.  Housing is just a bit larger slice of personal expenditures than health care and the two are inseparable in the eyes of many.  Housing expenses have risen even faster than health care expenses so don’t they cry out just as fundamentally for government intervention as health care?  Never mind that government policies, just as in health care, are the major cause of the rise in housing expenses.

Just as the government declared war on the SUV and business jet, the McMansion will be villainized to create class envy and get empathy for a government takeover.  It does not matter if people have uses for and desire a certain type of home.  Of course, we know the government still speeds the ruling elite around in Suburbans and flies them about in government business jets! What is good for the populace is never the same as what is “deserved” by the czars who arrange the lives of the peasant class.  What the government takeover of real estate would eventually mean for most is welcome to the projects.

If you don’t believe the “ruling class” is already taking advantage of the rest, consider that their pay is nearly double the private sector.  Don’t fear, there will still be the White House for the President and, of course, there will be mansions for governors and housing fitting for the station for the ruling elite bureaucrats.  In the name of historic preservation, posh homes and those McMansions will be assigned to other important members of the directorate.  Those who write the rules will not need to abide by them, only the unwashed masses, you and I, would have to follow them.

So, you need not fear the government takeover of real estate brokerages, since the final government real estate reform has no need for brokerages.  The thing to fear is what is already happening every day in both my neighborhood and yours as our property rights are peeled away by each group of citizens wishing to take something away from the others. Remember the end game when you celebrate the tax credits for home buyers and lobby for more.  Once the government controls your access to medical care and access to your home, won’t government pretty much control you?