[The Great Yazoo]

I remember similar analysis being discussed more than 20 years ago when I was in law school. The problem with the proposal is not theoretical, but practical.

There's no technical impediment preventing one landowner from obtaining the voluntary agreement of a second landowner not to interfere with the first landowner's view. For example, one landowner could agree not to "improve" the hill, not to harvest the trees on the hill, and not to build anything on the hill, but to maintain the hill forever in its then-current condition, all so as not to interfere with another landowner's view. Generally speaking, restrictive covenants burdening certain lands for the benefit of other lands are really quite common.

There are practical problems with your proposal, however.

Assuming a permanent restriction, at what price (less than the fair market value of the hill property) would the hill owner (the property being viewed) (the "Viewee") charge the hillside homeowner (the owner viewing the hillside) (the "Viewer") permanently to restrict use of the property to be viewed? If the Viewee's land can't be used because of the restrictive covenant, the Viewee's land is no longer an asset but has become a liability (the Viewee must continue to pay taxes on the land). Consequently, the Viewee has no incentive to agree to the restrictive covenant unless the Viewee is paid the land's full fair market value.

That raises a question on the other side of the equation. If the purchase price for the restrictive covenant is same as the purchase price for the land (the land's fair market value), why would the Viewer buy only a restrictive covenant and not the full fee simple absolute (full ownership of the property)?

Then there's the problem of free riders. Why would Viewer buy the restrictive covenant which is enjoyed not just by Viewer, but also by all of Viewer's near neighbors? Viewer's near neighbors benefit from the restrictive covenant Viewer paid for, but pay nothing for it. Again, the Viewer would buy the fee simple absolute for the fair market value, but would have no incentive to buy a mere restrictive covenant at that same price.

One approach would be to have government buy the restrictive covenant. But why would taxpayers across town be expected to pay for a restrictive covenant from which they receive no benefit?

If a single developer developed lands in a neighborhood, that developer could limit use of a portion of the development by restricting use of specified lands ("Common Areas"). Other lands ("Lots") would benefit from the restrictions imposed against the Common Areas. The developer would then sell the Lots, charging a premium for the Lots especially benefiting from the restrictions (in California, it may be a hillside lot; in Florida, lots adjacent to a "water feature"). Lots not especially benefited from the Common Areas would not command a premium price. What I've described in this paragraph is, in fact, the principal way restrictive covenants are used.

The proposal may work if the "view fee" is only temporary. For example, Viewee would agree not to develop Viewee's lands for (say) five years, at the end of which time Viewee would be free to develop the lands.

Viewee would have an incentive to sell viewing rights when Viewee has no present plans to develop (Viewee gets something, rather than nothing, for his vacant property). When the land is to be left vacant anyway is precisely the time, however, that the Viewer has the least incentive to pay the view fee.

Viewee would have no incentive to sell viewing rights when Viewee is planning to sell the land or develop it, however. But that is precisely the time Viewer would most be interested in paying a view fee to acquire viewing rights.

In any event, there is nothing that would prevent landowners from entering into such voluntary arrangements. Obviously, the agreements would need to be adequately documented and would have to be done in such a way as to give third-party purchasers of property adequate notice of the agreements if the Viewer wishes to bind the land.

[Kay Ludlow]

In my mother's neighborhood, back in the 70's, the guy who owned the land behind her street worked up a plan to develop it - essentially adding a new street where she and her neighbors would have houses in back of theirs. The people on the street weren't real happy about it, and talked with the landowner, who encouraged them to buy the lot behind them. Almost all of them did - the value was still low as there was no access. Once almost all the lots that would have been the lower side of the new street sold at low prices, it no longer made economic sense to him to pay the development costs (streets, water, lights, power, etc) for one side of the street. To date, he has still hasn't developed that part of his land. Individual citizens getting together and spending their own money to get what they want - sweet, isn't it?

[Carry_Okie]

I remember similar analysis being discussed more than 20 years ago when I was in law school.

That explains a lot. As it is, lawyers are the source of the problems with regulatory government, making oodles of bucks selling protection rackets through NGOs. Lawyers get brainwashed too, in fact, they are screened for their predisposition to Statist solutions via the LSAT.

There are practical problems with your proposal, however.

Let's see if you understand "my proposal"...

Assuming a permanent restriction,

...and the first thing you do is set up an un-necessarily restrictive case. You are correct that covenants are exchanged all the time, but that they do not respect changes in valuation. I don't recommend such, but advocate term contracts for services.

As for price, you are forgetting all the other uses of property coincident with selling a viewing contract: habitat, hunting, fuel and watershed management... every one of which is currently the exclusive province of regulatory government. Products, services, responsibilities, and risks that have effectively been socialized by regulatory government.

If the Viewee's land can't be used because of the restrictive covenant, the Viewee's land is no longer an asset but has become a liability (the Viewee must continue to pay taxes on the land).

See above. Further, as I have said elsewhere on this thread, property taxes are, IMO, unconstitutional and have no place in the equation. However, even allowing them from the public good perspective, it beats an open space district or an easement, the "practical problems" of which are legion because they too often involve corruption on behalf of developers.

That raises a question on the other side of the equation. If the purchase price for the restrictive covenant is same as the purchase price for the land (the land's fair market value), why would the Viewer buy only a restrictive covenant and not the full fee simple absolute (full ownership of the property)?

Here again, you are only seeing but two uses: develop or not. You say you understand my proposals, but clearly do not. Need an example?

Who would go into the park business competing against an entity that gets all its assets for free, pays nothing in insurance, can get away with a product in lousy condition, and charges virtually nothing to use it? The very existence of an armed government monopoly in the land entertainment business precludes valuable non-development uses of private property.

Maybe you should understand more about "my proposal" before you criticize it, constructively or otherwise.

Then there's the problem of free riders. Why would Viewer buy the restrictive covenant which is enjoyed not just by Viewer, but also by all of Viewer's near neighbors?

As seller, I only care about whether I get my price for my view. If I do a good job of marketing, then I enlist the wishes of as many potential customers possible to maximize total value. As a buyer, I get to stipulate how that view is managed, who gets to use the place as a park, who gets emergency food or shelter from the provider, etc. As to whether others who derive benefit from the view pay or not, it beats using government to devalue my land by force if people like looking at it. It beats NGOs using government to "protect" something on my property in order to put me out of business for quick sale to a preferred buyer. Once my neighbors were confronted with the choice of raising the cash or watching me do something ugly with it, it's amazing how fast people start to cooperate. I can always put up a fence or plant trees near their property line.

One approach would be to have government buy the restrictive covenant.

As I inferred, a typical statist "solution," incapable of overlaying the kind of dynamic complexity of which I speak.

But why would taxpayers across town be expected to pay for a restrictive covenant from which they receive no benefit?

It's called an Open Space District, and yes, cleaning ladies from across town who never see one much less go hiking, pay for the benefit of developers who build adjacent to an OSD parcel and get to market free park access to their wealthy customers for the price of a contribution. It's ugly, but it's very profitable.

What I've described in this paragraph (your Florida California example) is, in fact, the principal way restrictive covenants are used.

Such is an extremely crude system.

Viewee would have no incentive to sell viewing rights when Viewee is planning to sell the land or develop it, however.

To build or not to build, that is not the question. A seller's decision depends upon a whole array of products that don't exist (viewing being but one) and the best combination of each unique to each place (one of the benefits of markets is that they are capable of such complexity).

Lest you think the legal overhead for such a market too high, I give you automated contracting software. Lest you think trading in risk offsets too complex, I give you hedging software. Lest you think organizing a set of owners managing stopovers in an international migratory flyway business, I give you the Internet.

Obviously, the agreements would need to be adequately documented and would have to be done in such a way as to give third-party purchasers of property adequate notice of the agreements if the Viewer wishes to bind the land.

People selling products advertise to maximize their return and find out what customers want. Government cuts special deals in secret in return for favors from the politically dominant, particularly buying bond debt.

[KC_for_Freedom]

Viewee would have no incentive to sell viewing rights when Viewee is planning to sell the land or develop it, however. But that is precisely the time Viewer would most be interested in paying a view fee to acquire viewing rights.

As I see Carry_Okie has already replied, I will just say that the premise, (without going into all the details spelled out in his book) is that players in a property deal include the viewers and potential developers, and regulators (who we are trying to cut out of the mix). The concept may or may not result in no development. The idea is that all the stakeholders can participate directly with the exchange of something of value and the property owner is compensated for his property rather than have the force of government do something that renders his property worth less.

A related idea is that the land owner will want to do what is best for his investment and will take care of the land in a way that is better than government regulation and an attendent breauracucy can do. If development is what is on his mind, then the same capitalist forces will strive in the direction of a development that is in the best interest of the stakeholders, taking into account view and neighbors interest in a better way than council meetings and planning commissions can.