Tuesday, August 31, 2010

"Let House Prices Fall"

That's what the Calculated Risk blog is calling for in this recent post

I agree with much of the analysis as artificially propping up house prices is like drinking a Red Bull instead of getting better sleep every night--it can work in the short term but the longer term crash is hard and bad.

Now if this call for letting prices fall does occur, then the effects on local land use policies will be interesting to follow.  More renovation, less new building.  Increased rehabs, decreased new construction. 

Though Planning Commission hearings may get shorter (less rezoning, fewer development plans and plats), one could envision Board of Zoning Adjustment hearings getting longer as more people seek variances and special exceptions to modify what they currently have. 

Need a larger house but can't afford one (or can't get another mortgage until you sell your current house)...then maybe a variance to allow you to add another bedroom or two by building into that setback could be your answer...

That's the scenario that falling house prices is likely to instigate.  Is that a good thing or not?

Whatever your answer, this is certainly an interesting time to be a land planning and development prof...

--Chad Emerson, Faulkner U.

http://lawprofessors.typepad.com/land_use/2010/08/let-house-prices-fall.html

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