Tuesday, August 19, 2003

The piece I did last week on homeowners' associations and libertarianism seems to have gotten more than the usual level of comments in response. To recap: a homeowner was told by the homeowner's association to take down the UN flag which had replaced his US flag -- a content-based speech restriction which would not be legal for a government body. But his options for dealing with the situation -- fight in court, petition the board to change its policies, or try to join it himself, are, at best, the same he could use in fighting the government.

Unfortunately, a lot of the responses were a bit clueless, like this one, from the libertarian I cited, who points out that homeowners' association covenants can be drawn up to be less restrictive than government powers, and that only governments have the right of eminent domain. But the homeowners' association in the case at issue was exercising powers which the constitution (after the 14th amendment) forbids to government at any level. And while homeowners' associations don't have the power of eminent domain, many of them can foreclose on homeowners that run afoul of them; to the guy being bought out, this is a distinction with precious little difference. Then there's this post, which argues that homeowners' associations are less of a threat than local governments exercising the same powers because the associations are local. And so forth.

A more interesting response comes from Julian Sanchez, who arrives at this conclusion:

If you look at a narrow case, many years down the line, it may well be that the choice faced by someone moving into a home bound by contract to an association is the same as that of someone moving into a zoned area. But this elides the very different processes by which the degree of collective control over property was arrived at. The private process should give us far greater confidence that the tradeoff is efficient than the majoritarian one, whether or not it yields the same outcome.

... based on the argument that at some point, individual homeowners faced a choice to join the association or not, and made that choice on some rational economic basis.

Which is odd a few respects. First off, as an empirical matter, many homeowners' associations are associated with whole new subidivions from the word go, and are not formed by the individual choices of homeowners over time. But even if not, arrangements which were economically efficient at one point may not be decades down the line; time was that the major business in what's now Silicon Valley was orchards. And the policies of the association can likewise change, as noted in the comments here:

Covenants and busybody homeowners associations stick in my craw and I'd avoid them at all costs, but i have sympathy for those who'd get stuck in a fix when they bought a house they loved in a great spot and figured it would be OK, then later got surprised when the assoc got taken over by a bunch of tightpipes. I'm not especailly troubled by reasonable and sensible appearance restrictions. But regardless of private property rights, people deserve some protection from arbitrary and capricious rule by the burghers of Elm st. ...

So, even if you believe that homeowners' associations start more efficient than zoning boards -- of which I'm not convinced -- they're hardly guaranteed to stay that way. And when they go bad, they get to do it with the exercise of powers that governments lack. Is there any other reason to prefer them? Sanchez actually starts from another, which is this:

First, if you're not a pure consequentialist (and even if you are... but hold that thought), it might well be the case that two actions or situations have precisely the same practical consequences but differ in moral status. The means can matter as much as the end. Let's say I'm looking for gay sex in a small midwestern town. Maybe I'm unable to satisfy that desire because the local sheriff is keen on making sure no such hanky panky goes down in his town. Most folks, presumably Charles included, will say that's wrong. On the other hand, maybe I'm unable to find any because there just aren't any willing gay men in town. The consequence is the same. In terms of "positive freedom," to use Berlin's schema, I'm in precisely the same situation of "unfreedom" either way. What's obvious in this case, though, is that my degree of positive "freedom" here isn't the only possible way of assessing the two situations. One might at the very least make the case that in the latter instance, my (positive) freedom is being limited by those who are perfectly entitled to restrict it -- my prospective partners -- whereas in the second, it isn't.

I'm not sure how exactly this is supposed to apply to homeowners' associations versus zoning boards. If Julian actually means to express a moral preference for private contracts over government accountable to voters... well, I just have to disagree; I tend to favor "one person, one vote" over "one dollar, one vote" when individual rights are at issue, and those are the choices on the menu. I tend to remember, for example, that a lot of our regulatory structures were actually put in place to prevent actual exploitation of the poor by, as someone once said, malefactors of great wealth who were using their influence to systematically exploit the little guy -- as in, for example, the creation of the SEC under FDR in response to endemic stock scams in the 1920s, and the earlier creation of the FDA in response to the exposure of genuinely dangerous packaged foods, all in response to serious pressure from poorly endowed, but numerous voters.

That's not to say that I'm opposed to market-based policies or regulatory structures per se. From what I can tell, for instance, pollution credits seem to work pretty well in practice, and I don't have a whole lot of patience for the moralistic and, frankly, silly arguments of some lefties that a pollution market is evil even if it works because it "removes the moral stigma" of polluting. But it's worth noting that there is nothing "natural" about the market established by a pollution credit regime -- in order to function at all, it requires the existence of a regulatory regime capable of regulating the output of polluters, and keeping them all within whatever emissions are allowed by their credits.

Which brings up another point of dispute with the libertarians, or at least those who claim that "the natural operation of the market" -- any market -- is best left without government interference. Markets, almost by definition, are mechanisms for the exchange of property rights. Property rights -- well, what are they? In America, for instance, holding title to a piece of land does not allow you to keep someone from flying an airplane overhead, but does allow you to keep them from walking on it. Well, barring easements. And in Britain, it doesn't necessarily even let you do that -- people are granted the right to walk "traditional paths" regardless of what the owners of the land underneath them have to say about it. Even in the realm of tangible, portable, personal effects, "ownership" of something does not translate into the absolute right to do anything to that object -- to cite one trivial example, the owner of a gun does not have the unrestricted right to point it wherever they choose and pull the trigger.

So ownership of property -- even simple, tangible property, never mind more obviously artifactual things like stock in a company, or, heaven forfend, mutual funds -- is actually a fairly complex concept, granting certain rights to the property and limiting others to balance the rights of the owners against other people in society at large. And that balance is resolved by different societies in different ways. How? There are only two possibilities -- by main force, in a continual Hobbesian struggle of all against all -- or by some sort of political process.

And this point is directly relevant to the case of homeowners' associations versus zoning boards. Both are, explicitly and avowedly, legal mechanisms set up to restrict the actions of individual property holders -- in other words, to limit property rights -- in order to balance the owners' interests against those of other members of some larger community.

And what goes for the delineation of property rights goes for other aspects of a market as well, such as dispute resolution and enforcement. For which, nota bene, the homeowners' association uses the government -- for dispute resolution (the courts) and enforcement (the police, if it comes to that). Again, the only alternative to Hobbesian battles here is some sort of political process. Politics, then, is not an "unnatural" interference with the "natural" market; rather, political processes are a precondition for the existence a market of any sophistication.

And to get back to our homeowners, signing onto a homeowners' association, as opposed to a zoning board, does not get them away from the exercise of state power. When the associations foreclose, the cops will evict. To that extent, at least, the distinction between "public" and "private" bodies here is an illusion. The main difference, it seems to me, is less that one is public and the other private, than that homeowners' associations use contract law to bypass the limits America's founding fathers put on the actions of government per se. They also limit their voting franchise to propertyholders in a community, which was common in government early in American history, but which government has lately gotten away from, for what most people regard as pretty good reasons.

The difference, in short, is that when a homeowners' association goes bad, the people affected have less recourse against it than they would against government. For someone who values individual liberties, that doesn't strike me personally as a good deal.


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