Publc restrictions on land ownership includes things such as property taxes, escheats, police power, building codes and eminent domain. These restrictions limit the usage and rights land owners have. They can be very controversial, as you can see in the story below.
http://www.statesman.com/news/local/property-taxes-in-texas-up-nearly-200-percent-2440239.html
The above example examines the sharp increase in property taxes in Texas. Property taxes are a very controversial issue partly to the fact that they differ between states. Taxes are never an easy subject to discuss with citizens because they are usually against them and when news that property taxes in Texas have risen almost 200% in twenty years, Texas landowners become unhappy. Comptroller Susan Combs is launching a site to inform citizens of who is taxing them and by how much to ease the public opinion.
Another example of a public restriction is eminent domain which is the taking of private property for public use or benefit as long as the owner receives "just compensation". This process sometimes occurs without the need for the government to get involved but that is not what we see in the case below.
http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20120913_13_E4_ByLaur338661
Many of the people near Beaumont, Texas are unhappy that TransCanada Corp. is trying to buy property for an oil pipeline and they have taken to the courts. It seems that the locals may be given the right to refuse the sale of their property due to a recent decision by the Texas Supreme Court. I believe the government should not be able to tell property owners what they must do with their land and I see this as a win for those who raised their voices.
Sunday, September 16, 2012
Private Restrictions on Ownership
Private restrictions on land are certain restrictions or limitations placed on private land that designate a certain usage or condition for a piece of a property. Examples may include easements that allow usage to another party for a certain purpose or liens that guarantee interest in ownership such as how a bank is allowed to forclose on a house.
One reason why the Mortgage Crisis occurred in 2008 is because so many foreclosures occurred when borrowers could not make their payments. In the video below, reporters say there may be another spike in foreclosures soon. The Fed's plan for Quantitative Easing is targeting mortgage rates to keep them low so individuals can refinance and have more money to spend. This may help those that are on the brink of foreclosure to buy some time and make their payments.
http://video.cnbc.com/gallery/?video=3000115809&play=1#
Easements are another restriction that is used heavily in the oil industry. Many companies have easements to use land in order to gain access to their pipelines or wells. One such example is the story below.
http://www.lansingstatejournal.com/article/20120913/NEWS01/309130066/Enbridge-pipeline-company-using-eminent-domain-project?nclick_check=1
In this article, many of the residents of Michigan are unhappy that Enbridge Energy is going through the court system to gain access to properties that they do not already have easements for. This is upsetting for many of the individuals in the area. Oil companies, however, have much bigger legal budgets than these citizens so I do not forsee this issue going in favor of those that wish to keep Enbridge off of their properties.
One reason why the Mortgage Crisis occurred in 2008 is because so many foreclosures occurred when borrowers could not make their payments. In the video below, reporters say there may be another spike in foreclosures soon. The Fed's plan for Quantitative Easing is targeting mortgage rates to keep them low so individuals can refinance and have more money to spend. This may help those that are on the brink of foreclosure to buy some time and make their payments.
http://video.cnbc.com/gallery/?video=3000115809&play=1#
Easements are another restriction that is used heavily in the oil industry. Many companies have easements to use land in order to gain access to their pipelines or wells. One such example is the story below.
http://www.lansingstatejournal.com/article/20120913/NEWS01/309130066/Enbridge-pipeline-company-using-eminent-domain-project?nclick_check=1
In this article, many of the residents of Michigan are unhappy that Enbridge Energy is going through the court system to gain access to properties that they do not already have easements for. This is upsetting for many of the individuals in the area. Oil companies, however, have much bigger legal budgets than these citizens so I do not forsee this issue going in favor of those that wish to keep Enbridge off of their properties.
Property Rights and Legal Descriptions
Property rights can be defined physically by rights to the air, surface, water and minerals. When owning multiple physical rights to an area of land, you can sell off whatever rights you would like. Depending on the zoning restrictions of that land, there will be different restrictions for the use of those physical rights. In Manhattan, air rights are highly regulated due to the small volume of land available. The article presented below states that the Archdiocese of New York is in favor of a proposition to change current zoning restrictions in the area.
http://www.nydailynews.com/new-york/archdiocese-new-york-sell-lucrative-air-rights-properties-including-st-patrick-cathedral-article-1.1159272
Currently, the landmarked buildings in Midtown are not allowed to sell their air rights and church officials are lobbying for the ability to sell those rights to any property within their zoning area. This will ultimately increase the value of the air rights for such buildings as St. Patrick's cathedral as they will have more options of potential buyers. The church would then be able to use these proceeds to fund their current renovation if they so choose. Below is a story on the renovation, which mentions that the budget is currently underfunded by $50 million.
http://cityroom.blogs.nytimes.com/2012/03/16/st-patricks-to-undergo-a-three-year-177-million-renovation/
As I am not currently an investor in that area, I do not have a passionate stance on the issue. I do, however, believe in capitalism so if the church can make some extra money, good for them. If I were organizing the renovation myself, I would not begin the process until it was certain the entire budget could be covered.
http://www.nydailynews.com/new-york/archdiocese-new-york-sell-lucrative-air-rights-properties-including-st-patrick-cathedral-article-1.1159272
Currently, the landmarked buildings in Midtown are not allowed to sell their air rights and church officials are lobbying for the ability to sell those rights to any property within their zoning area. This will ultimately increase the value of the air rights for such buildings as St. Patrick's cathedral as they will have more options of potential buyers. The church would then be able to use these proceeds to fund their current renovation if they so choose. Below is a story on the renovation, which mentions that the budget is currently underfunded by $50 million.
http://cityroom.blogs.nytimes.com/2012/03/16/st-patricks-to-undergo-a-three-year-177-million-renovation/
As I am not currently an investor in that area, I do not have a passionate stance on the issue. I do, however, believe in capitalism so if the church can make some extra money, good for them. If I were organizing the renovation myself, I would not begin the process until it was certain the entire budget could be covered.
The Importance of Real Estate
Real Estate is a very profitable industry to get into, mainly due to the fact that it appreciates in value. It is one of the most secure investments an individual can make because there is a limited amount of land available to own. Additionally, land gives one the ability to branch out into different industries or begin projects on their own property. Ted Turner is the largest private landowner in the United States and is involved in many different environmental projects on his properties. The article below gives a brief overview into the different things Ted Turner has done with his investments in property.
http://www.cnbc.com/id/39303528/Ted_Turner_Puts_Conservation_Money_Where_His_Mouth_Is
Although Turner may not be the most upstanding peron, there is no doubt that his success as well as land ownership have granted him power.
There is no one else in the US that is fortunate enough to own the amount of land as Ted Turner, and very few who can compare. For the rest of us, we must start somewhere. When asking anyone about the "American dream", they will probably confirm that home ownership constitutes as a part of this dream. For almost all Americans, home ownership is only made possible by taking out a mortgage loan from a bank. Unfortunately, prior to 2008, many banks relaxed on their qualifications for obtaining home loans, and those looking to borrow took advantage of the loosened regulations. Both sides of these transactions began a trend of rising fiscal irresponsibility fueled by less restrictions by banks as well as the nature of average Americans to apply for mortgage loans of the largest possible amount. This fiscal irresponsibility eventually boiled over and caused the 2008 Housing Crisis. This meltdown has been the worst economic recession to occur since the Great Depression. The problem that began in residential real estate eventually bled into almost every other industry within the US economy and has contributed to the Euro-crisis. Since 2008, the Fed has been doing everything possible to deal with this meltdown, including the use of unconventional regulatory methods. One such action being taken is Quantitative Easing, the act of buying financial assets from commercial banks with newly created money. One article that describes the most current act of QE is here: http://www.cnbc.com/id/49018964.
In response to the above article, I believe the Fed has been injecting too much money into the economy. Because our currency is not backed by gold, we need to be frugile with how much money is printed in order to maintain the worth of our dollar.
http://www.cnbc.com/id/39303528/Ted_Turner_Puts_Conservation_Money_Where_His_Mouth_Is
Although Turner may not be the most upstanding peron, there is no doubt that his success as well as land ownership have granted him power.
There is no one else in the US that is fortunate enough to own the amount of land as Ted Turner, and very few who can compare. For the rest of us, we must start somewhere. When asking anyone about the "American dream", they will probably confirm that home ownership constitutes as a part of this dream. For almost all Americans, home ownership is only made possible by taking out a mortgage loan from a bank. Unfortunately, prior to 2008, many banks relaxed on their qualifications for obtaining home loans, and those looking to borrow took advantage of the loosened regulations. Both sides of these transactions began a trend of rising fiscal irresponsibility fueled by less restrictions by banks as well as the nature of average Americans to apply for mortgage loans of the largest possible amount. This fiscal irresponsibility eventually boiled over and caused the 2008 Housing Crisis. This meltdown has been the worst economic recession to occur since the Great Depression. The problem that began in residential real estate eventually bled into almost every other industry within the US economy and has contributed to the Euro-crisis. Since 2008, the Fed has been doing everything possible to deal with this meltdown, including the use of unconventional regulatory methods. One such action being taken is Quantitative Easing, the act of buying financial assets from commercial banks with newly created money. One article that describes the most current act of QE is here: http://www.cnbc.com/id/49018964.
In response to the above article, I believe the Fed has been injecting too much money into the economy. Because our currency is not backed by gold, we need to be frugile with how much money is printed in order to maintain the worth of our dollar.
About Me
My name is Grayson Hogue and I am currently a senior at Texas A&M University. In 2008, I graduated from Cedar Park High School in Cedar Park, Texas, a suburb of Austin. My expected graduation date is December of 2012 and at that time I will graduate with a BBA in Finance. I am currently in the process of applying for post-graduation jobs and I could not be more thrilled to begin a career in finance. Some of my current hobbies and interests include golfing, hunting, fishing and music.
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