Wednesday, March 29, 2006

Is the "tear-down" phenomenon good?

   The affluence of the American family and its hunger for a modern house, combined with skyrocketing prices, have led to the “tear-down” phenomenon – homeowners demolishing small homes and replacing them with larger and fancier ones.  A number of factors encourage rebuilding, including the costs of buying and selling, the possible avoidance of some taxes, and relatively modest costs of new construction.  A problem is, of course, that one’s neighbor doesn’t like a “McMansion” being built next door.  Across the nation, governments are debating rules to curb the replacement of existing houses.  While neighbors resent the height, bulk, and ostentatiousness of new construction, preservationists lament the loss of historic and affordable housing forms, such as the modest and charming bungalow style.
   But should law regulate the tear-down phenomenon?  I suggest that governments generally should refrain.  The dislike of a neighbor’s McMansion is of course a variant of NIMBY.  Universal zoning laws, as opposed to ad hoc anti-construction rules, can and should regulate the size of a house and how close to the property line it can be built.  Upset expectations about a view or sunlight might be dealt with more efficiently by rules for compensation from the rebuilder to the aggrieved neighbor. 
   Besides the familiar argument of “property rights,” what benefits might the community get from the tear-down phenomenon?  By allowing families to stay put and still sate their desire for a McMansion, there will less pressure for the “greenfield” construction of suburban sprawl.  Replacing (“tear-down” is tendentious, of course) thus can be seen as a form of infill, which is of course a mantra of smart growth.  The fact that the total acreage of most metropolitan areas has greatly outpaced population growth in recent decades is in part a result of Americans’ fulfilling their desire for newer and larger houses in the exurbs.  Law should welcome a practice that encourages people to stay put.

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