Explaining the exciting world of property rights.

One of the maddening aspects of the anti-historic preservationists here in Newburyport is their total ignorance of what property rights actually are.      I invite you to investigate Niall Ferguson’s fantastic documentary series, Civilization: The West and the Rest that appeared recently on PBS.     It answers the fundamental question, “How did Western Civilization triumph and become the most dynamic and affluent compared to other societies?”      Amongst the points covered: competition, modern medicine, science, religion, western wear and the Puritan work ethic; Professor Niall highlights property rights as a necessary part of Western Civilization’s success.

Property rights aren’t actually rights at all, they are protections.      Our free Capitalist society can not function unless the property of individuals are enshrined by law.    No effort, no labor and no contractual agreement on property would be possible if the land was not legally protected from arbitrary seizure by private or public parties.      No foreign investor would purchase property if it was known that our government could seize it at any time.      Property protections ensure the smooth flow of commerce.

The bottom line definition is that ‘Property Rights’ are laws created by governments in regards to how individuals can control, benefit from and transfer property.     The stronger that a government enforces these rights is a major factor in ensuring the level of economic success.      Individuals will create new forms of property to generate wealth, only when they are assured that their rights to their property will protect them against unjust and/or unlawful actions by other parties.

Traditional principles of property rights include:

  1. control of the use of the property
  2. the right to any benefit from the property
  3. a right to transfer or sell the property
  4. a right to exclude others from the property.

Traditional property rights do not include:

  1. uses that unreasonably interfere with the property rights of another private party (the right of quiet enjoyment)
  2. uses that unreasonably interfere with public property rights, including uses that interfere with public health, safety, peace or convenience.

It is these factors of having all properties protected which is why abutters to an owner who is requesting renovations or additions on their property have a right of say up to 300 feet away from the applicant.    Our Zoning board of appeals is a semi-legislative body and dutifully takes seriously the input from said abutters.   

America’s present view of property rights came from the application of British John Locke’s philosophy and which was applied in varying degrees in the North American colonies.     He states,

“”To this end it is that men give up all their natural power to the society they enter into, and the community put the legislative power into such hands as they think fit, with this trust, that they shall be governed by declared laws, or else their peace, quiet, and property will still be at the same uncertainty as it was in the state of nature.”

To explain the ownership of property Locke advanced a labor theory of property.

The labor theory of property or labor theory of appropriation or labor theory of ownership is a natural law theory that holds that property originally comes about by the exertion of labor upon natural resources. It is also called the principle of first appropriation or the homestead principle.

In his Second Treatise on Government, the philosopher John Locke asked by what right an individual can claim to own one part of the world, when, according to the Bible, God gave the world to all humanity in common. He answered that persons own themselves and therefore their own labor. When a person works, that labor enters into the object. Thus, the object becomes the property of that person.

To apply this philosophy to the new world, the colonial powers setup an indentured servant system.     It often worked as such:     new arrivals would work for another person under a contractual system for seven years.      Afterward, they would then be granted a previously predetermined amount of property.      This encouraged the western expansion from the coast and it also gave someone without wealth an opportunity to gain it plus they were given the opportunity to develop that land which further benefited the advancement of civilized life in America.

Later, as America advanced into the industrial revolution and more contemporary times, the philosophy of Frederic Bastiat was embraced.       He considered property as a commodity of value.     This spawned the modern industry of real estate.      The market value of property increases by considering the relationship between people with respect to an object.       In his own words, he states, “In our relations with one another, we are not owners of the utility of things, but of their value, and value is the appraisal made of reciprocal services.”    

In practical application, people obtain property with the expectation that it will increase in value but only as it is determined by the value as held by others who consider there is ‘value’ in the original owner’s property.       To put it in plain words, “We obtain land and buildings and we hold them with the expectation that others will hold such value in the land and buildings that if we should sell them, we can obtain a higher price than when we purchased it.     It also makes the houses more desirable since financial institutions judge the equity of a house by the ‘value held by others’.

This is fundamentally why the local historic district ordinance is a powerful protection of investments in property.      The Newburyport Historic District’s draw is based on the historical uniformity of the homes and the established streetscapes.      By protecting the historic neighborhoods, the investor knows that the asset will not be harmed in the future by the destruction of the streetscape or the loss of ‘feel’ of the neighborhood.       Thus, individuals, financial institutions and yes, even developers can gain confidence that they will not lose ‘value’ in the future.

This has been dramatically demonstrated in cities such as Charleston, Savannah and even locally in Portsmouth, New Hampshire.

If you would like to read further on the fascinating nature of property rights, I invite you to search the Internet on the subject.      Some excellent links are:

http://www.econlib.org/library/Enc/PropertyRights.html

http://en.wikipedia.org/wiki/Property_rights

http://www.investopedia.com/terms/p/property_rights.asp

-P. Preservationist
www.ppreservationist.com

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This entry was posted in Architecture, Developers, Economics, Education, Health and wellness, Heritage Tourism, Local Historic Districts (LHD), Planning, Preservation, Preservation History, Quality of Life, Real Estate, Streetscape. Bookmark the permalink.

One Response to Explaining the exciting world of property rights.

  1. Port Sanity says:

    You said, “abutters to an owner who is requesting renovations or additions on their property have a right of say up to 300 feet away from the applicant. Our Zoning board of appeals is a semi-legislative body and dutifully takes seriously the input from said abutters.”

    I believe you are confusing two situations. Abutters, and abutters to abutters within 300 feet (not everyone within 300 feet) only have a right of say when an owner is seeking a zoning variance. If an owner’s renovations or addition complies with zoning, the ZBA has no input, nor do any abutters, etc.

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