Wednesday, October 15, 2008

Teeing Off on Property Rights

It seems to be increasingly rare to open the newspaper and not find a story regarding home owners fighting some proposed development. The latest story comes from Clear Lake, where residents are fighting the proposed development of what was formerly the Clear Lake Golf Club (CLGC). However, in this instance I am going to side with the residents, at least in part.

The company that owns the land, Renaissance Golf Group, has made a habit of purchasing older golf courses and selling the land to developers. I have no problem with such a practice. However, in the case of CLGC, Renaissance is seeking to have the deed restrictions governing the land removed. Those deed restrictions mandate that the land will be used as a golf course or a recreational facility until 2021.

Deed restrictions are a contractual agreement, in which the owner voluntarily agrees to limit the use of his property. Such agreements are common in Houston, and are a valid, non-coercive means for property owners to insure that neighboring properties are used in a manner that they find acceptable. In other words, deed restrictions provide stability in land uses. However, unlike government mandated land use regulations, they are voluntary and based on the consent of those entering the agreement.

In the case of CLGC, Renaissance is seeking to invalidate a legitimate contract. It is seeking to overturn restrictions on the use of the property, even though it accepted those restrictions when it purchased CLGC. This is abhorrent and irresponsible. A person (or business) of character honors his agreements. He does not seek to have them declare invalid when he later finds the terms less desirable. Short of fraud, there is no valid reason for overturning the deed restrictions, or any contract for that matter.

What Renaissance is attempting is essentially theft. They entered into an agreement, as did others, and now they wish to renege on their part of the bargain. Imagine that two hours after you returned from the store, the manager showed up and demanded additional payment. After you engaged in the voluntary transaction, he decided that he didn't like the terms and unilaterally chose to change them. That is basically what Renaissance is trying to do.

The story has an ironic twist. The Clear Lake City Water Authority is seeking to condemn the property and purchase it from Renaissance. Renaissance claims that the price offered is too low, and the case is to be heard this week.

Government seizure of private property is as invalid as seeking to overturn a contract. But in a perverse way, there is a certain sense of justice in this story. Renaissance is getting a taste of its own medicine. It sought to use force to overthrow a contract, and now force is proposed against it. Don't mistake my position, both parties are wrong.

As I recently wrote, this would be a non-issue if property rights were understood, respected, and protected. Renaissance would be obligated to honor the deed restrictions, or have them amended according to the provisions contained therein. When property rights are ignored, when might makes right, we witness events such as this.

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