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Want to increase business? Answer your phone

Do you want to sell your listing faster and for more money?  Answer your phone

Do you want to work with more buyers?  Answer your phone

Lenders, do you want more loan business from agents?  Answer your phone

I know this sounds simplistic but more sales are made on the phone then are made via text or email.  This year, I made a conscious effort to ANSWER every phone call which come in.  I even bought a contraption which charges my phone and puts the calls on the car speakers.  The connection sucks but it allows me to acknowlege whomever called and to “triage” why they are calling.  If it’s a “money” call, I tell them that I will pull off the freeway and call them in a matter of minutes.  If it’s something to do with something other than work, I ask them to send me a text so I can call them later.

It doesn’t always work.  Sometimes, I’m a in a meeting and can’t answer the phone but by changing my mindset to believing that every single phone call represents a five-figure check, I am conditioned to sell.

Most importantly, our high tech culture has made incoming phone calls a “nuisance’ to many people.  if you are on the dialing end of the phone call, a voicemail or text, instead of an answer, tells you that you just might be bothering someone.  If you call me, I try to make you the most important person in the world.

You ARE the most important person in the world because you are the one paying my bills.  So call me at 858-777-9751

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Real Estate Auctions: Not Just For Foreclosures Anymore

Two years ago, I started paying MLS, NAR, CA, and SDAR dues.  Since my wife Debra was taking on more of the lending responsibilities, I spent the bulk of my time working with the real estate agents.  Having MLS access allowed me to hold broker opens for my agents, hold open houses for their listings, and act as a de facto “buyer’s agent” for them when they were out of town.

I had a few “orphan” clients and, in the past 30 months,  I represented about a dozen buyers and listed and sold two properties as a real estate agent.  It’s not something I love but understanding the brokerage side of the business enhanced our knowledge as lenders.  We understand contracts, deadlines, contingencies, and conversations with our agent clients better.  Throwing mom and dad in the station wagon, showing homes, writing offers, meeting property inspectors, negotiating repairs, and closing deals has made us better lenders so I’m grateful for the experience.

Eight years ago, a local hedge fund type started an online real estate auction site.  I wrote about it here and was tangentially involved but it never really took off.  I think it was more because of the online component and less of the auction component.  Generally speaking, when tech types and hedge fund guys try to disinternediate the local brokerage, they lose.  Greg wrote about the next flop yesterday.

I have always been intrigued with auctions so it shouldn’t surprise you that I have followed Harcourts, the New Zealand real estate brokerage’s entry into the Southern California market.  Harcourts has been holding non-distressed auctions for two years now with tepid results.  I had a few thoughts about why its results are mediocre so I started to form a new firm; California House Auctions.

We are a vendor.  We have an exclusive agreement with one of the top auctioneers in California.  He’s held over 600 auctions in the past thirty years and is well known in the community.  We’ll be helping ANY real estate brokerage to sell their (non-distressed) listing through a live auction.  We’ll charge a fee for each successful auction (paid at close of escrow to a licensed real estate brokerage).

I am still slogging through some legal and licensing stuff but we should hold our first auction later this month.

That’s my latest scheme and I hope to get your input as we progress.  We think this could be a great way to sell non-distressed properties and we think the live auction on the front lawn will help our brokerage clients earn more listings from the neighbors.

I’m thrilled we kickstarted RE.net2.0 and can’t wait to see what all of you have been doing these past five years

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My ideal closing date is always yesterday: The perfect real estate listing in the reckless teenage years of the new millenium.

On Facebook of late I’ve written about the idea of the perfect offer – the sum total purchase contract package most likely to win the de facto auction I am holding for my real estate listing.

We’ll talk about this in some detail, in due course, but for now the decision matrix for the ideal offer is obvious:

Highest safest soonest closable net return.

The price is the price, and you can lose me fast by dicking around. List or better? I like cash now, financed fast and FHA almost never. We’ll discount your offer for the time-value-of-money, obviously, but also for the closing-risk entailed by every new dawning day. My ideal closing date is always yesterday.

The corollary of the perfect offer is the perfect listing, and that’s an elusive prey. What we want is a marketing presentation – home, listing, photos, collateral – that cannot not elicit avid offers.

I list almost never lately, mostly repeats and referrals, which for me means a lot of investors. My sellers can be tight with a buck, but they’re rational. That matters, because a perfect listing wants a near-perfect house.

How near-perfect? FHA/VA-able, obviously, but I want more than that: Turn-key livable from Day One, with upgrades and spruce-ups as needed, cleaned to mother-in-law perfection and staged to charm. I want to be indubitably appraisal- and inspection-prepped, but more than that I want to be better than my competition – by a lot.

I don’t have to be luxurious or dramatic, just two or three cuts above everything else my potential buyers are seeing. For the same money or a little more, my house is your new home – and everything else is a work-in-progress.

We list just after midnight on Friday morning, this to maximize the marketing benefit of the Days on Market tally but also to maximize buyer frenzy: We offer up the scratch when we know buyers will be itching. My listing should be referenced in many, many “We must see this Saturday” emails.

The listing price? My best guess of the full appraisal value on the day of listing – no discounts, no testing-the-market, just what the home is actually worth in fair-market-value terms. Every good agent will know I’m right – and accordingly will know not to dick around.

But then what’s the point of being FHA/VA-able, since closing-costs offers are likely to fail? To drive up the numbers on the all-cash and conventional offers, for one thing. And who knows? Maybe the appraiser will find the number he’s looking for, should we end up taking an offer with costs coming back.

My baseline assumption is that a listing like this should produce multiple full-price-or-better offers within the first ten days on market, ideally within the first three days. I’m not always right, but when I am, I’m a market-maker: My all-cash deals make nearby financed purchases more appraisable.

There’s nothing like a seller’s market, I know only too well. But even when it’s easy to make deals, going the extra mile goes miles and miles in extra money for the seller.

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What is Position Zero on Google? All sales fundamentally start as questions….

One of the easiest things to understand in sales is that everything starts with a question. How much home can I afford? How do I deal with foreclosure? Who is the best REALTOR? Where is the best neighborhood for my family? There are literally millions of questions starting an equally impressive number of sales out there.

And the wild part is that REALTORS get asked those questions every day. The REALTORS that utilize those questions to start conversations (google Cluetrain Manifesto) and who turn those conversations into relationships and action generate stellar incomes. Those who find themselves incapable of that, well, notsomuch.

The trick is to find the right questions, the trending questions. The ones that are being asked. The ones that answers in the form of content provided on a site will result in Google putting you up there for the world to see. The ones that are WORTH blogging about.

How do you find them? Google it. I am not being a smart aleck. Check out what Google provides currently when you Google “How to Sell My Home”:

They show you both alternative questions to blog about and the FORM that you should use with the answer. (more on that later) Conform your answers to their style whether table, paragraph, list, or etc and watch what happens. Geotarget your answers gently for some extra fun and results.

Additional note: Want to expand the number of questions that Google displays and build yourself a month or more of blogging subjects? Click on each of the current questions in the Google search and Google will provide similar stuff. In a matter of seconds your list can look similar to this, but longer:

Position zero on Google (that’s the one above Zillow, kids…the one with the picture and a list). That’s the one reserved for the boys and girls with authority who a) pick the right questions b) answer them in the form that google wants and c) uses correct formatting…etc but whether you get Position zero or not, you WILL be answering questions that are being asked and you WILL be starting those conversations that lead to sales.

Have at it, y’all. Have some fun with it.

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RE.net 2.0

Here’s a preview of what I have in my mind :

1- Facebook ads (as an agent)
2- Value-added services for real estate agents (as a lender)
3- Non-distressed auctions for real estate brokerages (as a vendor)

I have posted a few things since the content slow down on Bloodhound Blog but a lot has happened since 2012-ish.  The market has recovered nicely and most of the contributors are probably too busy listing, showing or financing property to write.  Bloodhound Blog was on the cutting edge of the RE.net:  provocative, hard-hitting, curious, and innovative.

Let’s start howling again

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Is it me or have underwriting…

My wife and I downsized earlier this year, to save money, reduce debt, and put money into the beginning of a rental empire we hope to build.  We have good cash flow, income, and excellent credit.  And yet, maybe because we earn money as a small business – read: law firm – the underwriting process was hellish.

This wasn’t our first time on the rodeo.  We have bought and sold – having moved a number of times, once from Phoenix to North Carolina, and several times in each state.  But it seems as thought these last two mortgages were the most difficult to get, even though we are in the best spot financially we’ve ever been in.

My wife, who did most of the legwork in tracking down last-minute documents requested by the bank, remarked that if they made it this difficult on us to close, imagine how difficult it must be for an average buyer.

I suppose part of the problem is that we are self-employed, and so there is quite a bit of (understandable) concern about the stability of our income.  But, having filed and reported above-average incomes for 5 years straight, you’d think a mortgage company would take those seriously – after all, we aren’t exactly excited about paying high taxes to Uncle Sam, and it would be stupid just to do that in order to show good “income” to a future mortgagor.

Any thoughts?

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Getting a San Diego Condo VA-Approved Adds Value To Service Members

Debra Brady and I are experts at VA-financing.  One of the things we do very well is secure a VA condo complex approval for condominiums which aren’t agency approved.  Some comments from a recent YELP review:

I started the home buying process while still on deployment, and Brian graciously worked with me across 13 time zones to begin explaining the ins and outs of home buying.

This is actually kind of fun for me.  With technology, deployed service members can communicate with me well in advance of buying.  Many times, when deployed,  they have free time with little to do.  They use Gchat, Facebook Messenger, Skype, and email to communicate with me.  Sometimes it makes for some weird hours but I enjoy finally meeting them when they return to the States.

I googled VA home approval, and his was the first name to pop up.  Brian is an absolute master at working with the VA.

That’s what I love to hear–that we come up first on Google Search for this topic.

Brian took my wife and I out for cocktails to explain in person the different loan rates and explain the decision making process for each of them, and Debra worked like a fiend to make sure thinks were done WELL ahead of time.

This is how Debra and I work.  I spend most of my time “selling” real estate agents and educating clients and Debra gets the loan done.  When we’re clicking properly, I am “Mr. Outside” and she is “Mrs. Inside”.  Clients know that she is in the office, every day from 8AM until 230PM each day and available on the telephone.  This frees me up to: (a) find more business for us and (b) properly educate home buyers about the process.  We pride ourselves on “no surprises” during the loan process.

To any Servicemembers who are interested in using their VA loan option, look no further than Brian, he is THE expert who will get you into the place you want.

That’s what I hope to hear on every VA loan we close.  It doesn’t ALWAYS happen but, I’m proud to say, it does happen more often than not.

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The Real Housewives of Redfin

“Couldn’t you, just once, tell somebody what they really want to hear?” my wife asked, almost immediately after I got off the phone with the Redfin recruiter.

“Is that a rhetorical question? You just asked me a rhetorical question!” I snapped. Ever since I turned fifty-five I get snappy when someone I love questions my intentions, especially when I’m hungry.

She didn’t answer but instead, continued her Words With Friends game on her iPad. I walked into the kitchen.

“They’ll call me back,” I said after a few moments of silence, my fat head deep into the refrigerator looking for just one thing to shove into my mouth that didn’t have soy as its main ingredient; something with a little gluten, perhaps. Is this too much to ask?

“No they won’t,” she countered from the other room. “You just used the F word during a job interview.”

“No I didn’t.”

“Yes you did. I heard you.”

I walked over to the sofa with some type of pickled vegetable wrapped in a grape leaf. My wife did not look up from her backlit screen.

“Does Xerox really have two x’s in it? Is that even a real word?” she asked.

“I don’t know,” I said, now a little stunned by what might have just happened on the phone; not sure of anything at that moment. Appetite quickly waning.

“Two x’s? I don’t think so. Well, maybe…And it wasn’t really a job interview. It was only an initial phone call. Introductory.”  No longer hungry at all, I tossed the unsavory snack into the waiting mouth of our slobbering dog who, in turn, spit it immediately onto the floor.

“Hmm,” my wife said to nothing in particular, or perhaps, to everything in general.

——

That was six months ago, and although the names and details are a bit blurry now, the gist of the episode remains clear.

It all began with a conversation I had earlier that same week with a fellow Realtor—-an old-schooler, like me. We were seated at our favorite Starbucks window bar nursing triple espressos when he mentioned a new type of Redfin partnership program that offered leads to selected non-Redfin Chicago brokers.  You just had to pay a referral fee at closing with no other upfront costs. He pointed out two young women with strollers who were enjoying mommy-time with their toddlers out on the patio.

“Both of them are Redfin partners who work part-time in my office,” he said. “Pretty sure one of them doesn’t even know how to spell condominium and she already has three deals this month. I think the other skinnier one is a yoga instructor for her real job.”

“A yoga instructor?”

“I think so,” he said. “She’s always wearing yoga pants. At the very least that makes her a housewife. Either way, they both drive nicer cars than me.”

“If this Redfin thing is such a good deal, why don’t you sign up for it?” I asked.

“I hate this business too much already,” he said. “What I don’t need is a flock of twenty-somethings texting me every time they log on to Trulia and get a real estate stiffy.”

While my buddy, clearly, was too jaded for the job, I somehow felt that I wasn’t. With fifteen years experience, I figured I was a slam dunk partnership candidate; just what the Redfin folks might be looking for—a full-time, condo slinging, non-yoga instructing, ass-kicking, downtown Chicago real estate professional. And besides, business was slow and I could use a little boost. A slow drip of fresh blood would blend nicely into my current marketing mix; a few extra ‘my watch cost more than your car‘ condo buyers here, a couple ‘coffee is for closers’ listing appointments there. A steady stream of new prospects could keep me in the real estate game until retirement. All I needed were the good leads. The Glengarry leads. You know, the ones Mitch and Murray send in from downtown…

So I Googled Redfin, found the program, applied on-line, did the tutorial, attended the interactive webinar (even kept my mouth shut), and scheduled my initial phone interview which, true to form, I forgot to enter into my calendar and promptly forgot about.

A couple days later, my phone rang at an inopportune time–as it always does, the screen flashing a familiar Seattle area code. I was certain it was that Dave character from Zillow’s advertising department who had been calling every month  for three years trying to get me to pay him for posting my listings on his real estate site. Go figure. Anyway, when I answered the call I was ready to let poor Dave from Seattle have it, right between the zillows.

“Hi GG! Sky from Redfin here! Can you talk?!”

“Who?”

“Sky (or maybe it was Sea) from Redfin! We have your interview scheduled for 2 p.m. Pacific!”

“Oh yes Sky. Of course (??)”

“Cool. GG. Let’s do this! What made you want to become a Realtor?!?!?”

“…”

It was such a stupid question I honestly don’t remember what I told him. Truth is, seven years ago I wouldn’t have even considered such an arrangement. Everybody and his gardener had a real estate license back then but we were all stacking paper. My biggest professional worry in those days was which Rolex to buy next and how to keep the nicks and parallel parking scratches off the bumpers of my big body Benz.

“What are your best qualities as a Realtor, GG? What makes you outstanding?”

Or something along those lines. And to be fair, there was an echo on the phone connection so maybe I was imagining the GG part. Maybe I was just in one of my snappy ‘Meano Geno’ moods that day. (Another Realtor actually called me that once, right before hanging up on me. “Meano Geno!” Click.) Anyway, like I said, this all went down six months ago. And I’m getting old.

“What I’m really good at, Sky, is negotiation. I’m really good at getting the other side to cave-in, thus procuring the best possible deal for my client.”

“Cave in?”

“Yeah. Cave in. You know, win,” I said.

“Win/Win, you mean?” he asked.

“Yeah, I guess. Win/Win. Sure. Why not.”

“Okay, cool,” he said. “Now, what do you think makes you exceptional as a real estate agent?”

“I don’t know, Sky. I suppose the fact that I’ve negotiated over three hundred deals and more than a hundred million in transactions in my career. Something along those lines. What do you think?”

Coool. And how do you envision the Redfin Partner Program fitting into your current business model?”

“Come on man. What kind of questions are these? You send me the leads. I get them to buy something they like.  Get them a good deal. Everybody’s happy. It’s pretty simple. Just keep me on the North Side. No foreclosures. No suburbs. No ghettos.”

Okaayyy…..What was the biggest obstacle you’ve ever had to overcome as a Realtor?” he asked.

“You’re f*king kidding me, right Sky?” I replied…

Anyway, it was about two seconds after that when my wife asked me the rhetorical question.  A week later I received the following email:

To: Geno Petro
Subject: Redfin’s Partner Program

Hello G,

Thank you for giving us the opportunity to consider you for the Redfin Partner Program and taking the time to speak with us. While we are impressed with your success as an agent, after careful consideration we have decided to pursue other candidates in your market at this time. We will maintain your application in our active files and contact you if there is an opportunity for a future partnership.

We do wish you continued success in your real estate business. Thank you again for your time!

——

To be honest, I forgot all about this nonsense until a Redfin ‘Partner’ called on one of my listings last week, requesting a 7 p.m. showing on a Friday night. After bitching about the time (and weather) for thirty seconds, I finally agreed. And even though I’m apparently not qualified to have her job (but am somehow qualified to show her one of my properties on a Friday night in the middle of a week-long ice storm), she sounded very nice. Like someone’s wife.

So she shows up thirty minutes late with her three-year old daughter and a 2014 Infiniti QX60 full of Millennials. Everyone was holding Starbucks cups and wearing North Face and UGGS.

“Sorry we’re late. Traffic sucks,” she says.

“Yes it does,” I tell her. “That’s why I left my yoga class thirty minutes early. To arrive here on time.”

“You practice yoga?” she asks me.

“No,” I reply, as I watch them slosh, one by one, across the family room carpet, “I just like wearing the pants.”

 

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Hey, @Zillow: Why are you calling the Realtors and lenders you prey upon #racist?

And why on earth do they continue to do business with you?

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How Are YOU Getting Real Estate Leads?

Let’s get back to it.

We’re all sitting around today, plotting and planning our strategies for 2014…

Writing down goals. Looking over our numbers, canceling the crap that aint working and signing up for stuff that might…

For me, (ever since I read MREA back in 2004) the modus o has always been “If I get a shitload of traffic, and generate a shitload of leads, and set them all up for some kind of semi-automated follow up, I’ll make more money.”

Guessing a lot of the folks reading this agree, though some of us have bigger “balls” then others and are willing to spend a lot more on lead gen then we do on food…

Right now my favorite way to generate leads is with dirty little Facebook ads that drive traffic to dirty little squeeze pages like this.

Screen Shot 2013-12-31 at 9.45.41 AM

How are you doing it?

(I’ll show you more about mine if you show me yours…)

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Most Creative Loans We Funded in 2013

1- We funded a $900,000 Orange County purchase with just 6.5% down payment and no mortgage insurance

2- We funded an Orange County condo, with a VA loan, and got both the Master Association and Condo Association VA approved in 30 days

3- We funded a $600,000 San Diego County purchase, with just 5% down payment and a seller-carry back second mortgage and a conventional first mortgage.

4- We funded a 7-unit San Diego apartment property, $820,000 purchase price with just 10% down and a 20% seller-carry back second mortgage.

5- We funded an “underwater” property with loan values at 135% of the appraised value in Los Angeles County.

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Celebrating the father of our freedoms: The freedom to own real estate

Kicking this back to the top. Happy Independence Day! — GSS

 
This is me in today’s Arizona Republic (permanent link):

Celebrating the father of our freedoms: The freedom to own real estate

By the time you read this, Independence Day will have passed, but I thought I’d give you one more reason to celebrate our freedoms: Real estate.

We call our culture Judeo-Christian, but we owe our laws and political institutions to the Greeks and the Romans. The Greek Hoplites, in particular, are the model upon which Western Civilization is based: Individual family farmers, freeholders in the land they farmed, who owned their own weapons of warfare and who banded together as a virtually unconquerable infantry when their lands were attacked.

What accounts for the independence of the Greeks? Was it their unprecedented military tactics? Was it their superior weaponry? Or was it the savage dedication of free men fighting for their own land?

The Hoplites fought against ragtag slave armies, engaging in combat only out of fear of the lash, never losing sight of the chance to dessert. But the Greeks fought to retain the rights they had wrested from despots, rights ordinary people, until then, had never known.

We derive many more treasures from the Romans, among them the story of Cincinnatus, the retired general called back to battle and given dictatorial power because the situation was so dire. Instead of abusing that power, Cincinnatus won the war, set down his arms and picked his plow where he had left it.

We honor the citizen-soldier in the conduct of George Washington, who could have declared himself king of America, but who instead, like Cincinnatus, surrendered his power and went back to his farm.

Politicians will tell us that we owe our freedoms to representative government. This is twice false. The interest we share in government is the land we each own individually, like the Hoplites. Moreover, representative government without free ownership of the land is tyranny in camouflage.

Americans are free because we have the uncontested right to buy, use, enjoy, rent, let and sell the land we live on. If you have any fire-crackers left over, you might light one for the freedom that is father to all the others: The freedom to own real estate.

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Seven years of the dawgs: Reflections on BloodhoundBlog’s anniversary.

We started here, and still the question rings in my ear:

If almost-as-good is free or nearly free, what is the market value of slightly-better?

Big changes in the world since then. Brick ’n’ mortar retail is all but dead. Books, records and software ‘apps’ are aiming for a price point under ninety-nine cents — many of them all the way under. The supermarket real estate magazines are gone, and the thinning out of the classifieds put the newspapers on a strict diet. Their putative replacements, realty.bots like Zooliapads.com, are by now just sleazoid lead vendors. Unwired Realtors are enjoying their retirements while we are doing business without a fax line or even a land line.

That much is cool. I’m less sanguine about the people in this business than I am about the business itself. One of the things I haven’t loved about real estate has been seeing some of the incredibly scummy things people will do. Most of my clients have been great, and I love all of the people I work with long-term. But I’ve fired people who have left shit on my shoes forever, and this is not a happy outcome for me.

BloodhoundBlog has been a similarly-mixed blessing. I’ve met some wonderful people through this blog, and we’ve published some remarkable content. But I’ve seen the howling mob at its worst, and every day I get to see sleazy SEOs working overtime to make me regret sharing link juice with commenters. And meanwhile, the vendorsluts and their raving wraiths have turned our part of the internet into just another Realtors’ brothel. Don’t get any on ya.

And I am off to Planet Elsewhere. I wanted to hit the road for a while in the first quarter, but my Mammy died and then Odysseus started looking all deathful. So here I am mounting the expedition in the third quarter instead. I’m going to be in Las Vegas for the last three weeks (three nundinae, actually, but who’s counting?) of July, and then I will be in Orlando for the last three nundinae of August. I’m interested in making plans for September, October and beyond if you would like to see me in your town.

Meanwhile, there is the question of what to do about BloodhoundBlog. I’m not writing here much, nor is anyone else. I think this is a valuable resource, especially when the entirety of the vendorslut mafia is howling as one mob. But it’s stoopid to have thirty mug shots staring at us from the sidebar and have all but none of them writing new content.

So I need for the dawgs to figure out what they want from this place. When I come back from Sin City, I’ll reconfigure the roster accordingly.

Your call: What happens next?

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Practical ontology in real estate? Who ever heard of such a thing?

NewHomeBuildingInPhoenix

From KJZZ Radio in Phoenix, The Way of the Bloodhound:

‘“From now on whenever you’re driving on the freeway look for a truss,” Swann said, referring to a roof truss on the back of a truck. “And when you start to see a truss every day, then things have turned around. If you see three trusses a day, then things have really turned around. But if you can go five days without seeing a truss on the freeway, then no one is building anything.”’

The linked story is from Peter O’Dowd, a journalist for whom I have huge respect — not alone because he listens when I talk about bug’s-eye-view real estate.

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Reason Magazine: “How established homeowners use regulations to stop new low-cost homes.”

It’s not mentioned in the Reason article, but the real curse of zoning is the prohibition of innovation. By forbidding all projects, land-use tyrants exclude not just the dreck but also the sheer genius. Some builder coud have come up with the modern equivalent of Wright’s Five-Thousand Dollar Home, but that guy works in software instead, where innovation is celebrated and rewarded.

Meanwhile, the hard consequences of coercive land-use regulations:

When a news crew showed up to film a public meeting in tony Darien, Connecticut, in 2005, some of the residents were less than thrilled. “Why don’t you fucking shoot something else?” one demanded. Hundreds crammed into the hearing, sneering and jeering during the presentation.

The fresh hell residents showed up to protest? A proposal to replace a nondescript single-family home on a one-acre lot with 20 condos for senior citizens.

In Snob Zones, journalist Lisa Prevost describes the heights of entitlement to which property owners ascend when faced with the prospect of new development, especially multi-family dwellings in neighborhoods dominated by single-family homes. Prevost tours New England and finds an aging, declining populace bent on excluding outsiders. In town after town, affluent and working-class alike, residents line up to shout down new development no matter how modest.

In Darien, the need for the proposed project was clear; the town’s senior housing center had a long wait list, as did the last condo development built in the area (in 1994). Still, many townsfolk, expecting the project to open the floodgates to more high-density projects in the resolutely low-density burgh, were incensed.

Incumbent homeowners have a powerful weapon for vetoing change: zoning. In Darien and other exclusive zip codes, mandated minimum lot sizes kneecap developers who want to build something other than super-sized homes. In the process, they put entire towns out of reach for all but the wealthy. In hardscrabble Ossippee, New Hampshire, where it’s not uncommon for the working poor to live in tents during the summer months to save on rent, the zoning code flatly prohibits new apartment buildings.

Though Prevost, who covers the real estate beat for The New York Times, has no problem with the traditional justification for zoning (but for it, she believes, dirty industries might locate in residential neighborhoods), she has written as damning an indictment of zoning as any free marketeer could hope for. “The market is hungry for apartments, condominiums, and small homes,” says Prevost, “if only zoning restrictions would get out of the way.”

Where libertarians see an infringement on property rights, Prevost sees a problematic tradeoff between local demands for low density (tinged with fears that undesirables might move in next door) and regional needs for affordable housing. It amounts to the same thing, however: established residents using government force to kill the low-cost housing that would exist in a free market. In the words of the pioneering community planner (and ardent urban renewal opponent) Paul Davidoff, those who wield zoning laws “have not bought the land but instead have done the cheap and nasty thing of employing the police power to protect their own interest.” Nice.

Read the whole thing. Here’s a sweet joke for incentive:

In the words of one developer who switched to building cottage homes during the recession: “I used to say, we’re building homes for people who can’t afford them, with money they don’t have, to impress people they don’t know. You could just see it—it was stupid.”

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