Friday, May 07, 2010

cows bring in da dough$$

In this article, found in the Colorado Springs Business Journal, the author claims that cows bring in lots of money for local economies. In California, however, cattle farms and dairies are being pushed away. The farmers claim that the state regulations are making it hard for them to conduct business. So, places like Texas and Colorado look more enticing to the farmers because of the offer of less regulations. Farmers also claim that they were pushed away from the where they started due to urban sprawl. Can sprawl be to blame for the regulations and dairy farms leaving California?

It is true that more people usually mean that the city will have more regulations. This is because when there is a more dense population the government thinks that they need to keep a firm grip on it. They are afraid to let go of any power, so they instate more force among the citizens in the form of regulations. These regulations would make it harder to be a farmer, and thus I do believe that it would force them out, and even force them to leave California for a different state.
Also urban sprawl might be a cause for farmers needing move. If a city began to sprawl then there would be higher demand upon farm land. This could make the highest valued use of the land change which would force the farmers to move away, or further out of the city. And, as reviewed earlier more people makes for more regulations so the dairies are being hit from every angle. It would seem like moving away from California would be in the farmers benefit, but is it in the states? The obvious answer is no, it is not in the interest to push away these farms. If the facts of a cow's revenue building power are correct, then each cow is very valuable to the state and should be protected as an asset. The fact that regulations and sprawl are making these assets leave for different states is not good at all for California's economy.

So, wouldn't it be worth a little extra work (or a little less rules) to keep some cows around? I think yes.

Wednesday, May 05, 2010

Could it be? So close...

While this article is not the most current it’s about a year old, I found it rather interesting. It doesn’t go into all of the details of the planning organization but it has some. It is based off of the Open Space Committee in Guilford county, North Carolina. The committee began as an unofficial forum. Overtime it became a part of the Parks and Recreation Commission and would buy land using bonds. This is like music. Since the land is bought rather than taken, it is presumably going to the highest bidder. And people buying bonds to fund this means that people who believe in this cause are providing the money. Admittedly, it sounds as though some taxes are going to this cause, which is a bit of a downer, but two things in life are certain, death and taxes. Also, it sounds like the county is heading in the wrong direction, and will attribute more taxes to the project over time. For now, at least they’re buying up the land rather than simply taking it, or restricting the space that people can live one. According the John D. Young, chairman of the Guilford Open Space Committee there was little to no cost to the county to create Haw River State Park.

If it was moving towards using bond money rather than tax money to buy land rather than simply taking it that would be nice, however the trend across the states still appears to be the other way around. Perhaps if things such as the Haw River State Park being bought using bond money were better advertised then people would realize that all the rules and restrictions are unnecessary. This does not seem likely at least for some time since neither this nor the New Urbanism movements seem to take top priority among the news. However, Haw River State Park is a good example of the market working on its own.

Saturday, May 01, 2010

Times goes on and things change, they just do...

Housing downturns, reasons why? What happens when a parcel of land gets to it's highest valued use? Let's assume for a moment that the housing market and the transfer of parcels of land follows what we've been talking about in class. Over time the parcels of land will transfer from one user to another based on their highest and most valued use. This is represented by the sales price between two parties. In our modern land transfer system this is skewed by governmental policies such as zoning however we may assume that the transfer is the highest and most valued land use under the existing rules and regulations.

So why do house prices ever go down? It's because of the dynamic nature of people and the decisions they make and the trial and error nature of people's decisions. We've been talking about this in class and here is an example of it. What if you buy a parcel of land and the attached improvements (real estate speak for buildings) and you pay more for it then anyone else has and maybe ever will. Maybe you didn't get what you expected out of the land parcel and it's improvements. Maybe if it was a business it didn't turn the profit that you expected and the sales price you paid was a 'mistake' in that it wasn't worth the return it provided. Many of these factors transform themselves into some degree of risk and uncertainty. They may also be further exacerbated by risk from outside parties regarding financing and fund availability. When their value on the parcel changes and goes down another steps up to take place as it's owner.

So what does this have to do with Urban Economics? It's a manifestation of how the decisions of previous land owners and their actions may change the opportunity costs of current or future owners. Which do some degree may change specific uses of land parcels, how they are valued and how other uses change around them. We've talked about how business and residential parcels develop simultaneously and prices change dynamically. This I believe is a contribute to the way communities develop and are shaped. A misconception is that real estate always goes up in value but here is one reason and I think a baseline reason why this may not always be the case.