The property became a headache, rather than a place where you can build your dreams. My problem isn’t unique.
By Steve Green for WOLF STREET:
Last December I called Coldwell Banker and asked the agent to list a property I own, a one-acre-plus vacant lot in North San Diego County. I acquired the land a little over five years ago, after my mother passed away. She purchased it from our neighbor, when he moved into a rest home a decade earlier. A prime property like this can sit for years; level, close to schools, shopping and public transportation. All the while real estate valuations have been climbing rapidly, nothing gets done largely due to the city’s intransigence.
The city landlocked the property, through a complicated set of maneuvers, some years ago. They created a private street, and granted new homeowners easement rights over what was previously a public road.
The lot still has common access, which the title company does not recognize for insurance purposes. To clear access on the title, I would need permission from the homeowners, and most of them do not want added traffic and new homes. They have the right to refuse, or simply ignore my request, or to extort me for money. Then I would have to litigate them, individually. It’s a long and expensive process. There are four of them at least.
The agent asked for a 7% commission, part of the fee is an incentive for the buyer’s agent. I knew there would be problems, and I wanted a major RE company with legal resources. The first offers came in at the asking price. I stipulated that I wanted to carry the note, to discourage speculators, and maintain secondary rights to the property.
I got some solid cash offers, and I could see the market was heating up. After a month or so, I suggested we delist for a few weeks and raise the price. The agent was reluctant, nonetheless, I really did myself some good.
Three buyers came back at the new asking price. The agent submitted a multiple counter offer, and two of them jumped the bid and I took the best cash offer.
Then the question of access came up. My mother and I had worked on this with the city some years earlier. We had engineers and attorneys, and while we wanted to split the lot, that wasn’t doable. The way was cleared for a single home permit, we had plans and everything in place when Financial Crisis froze the markets. Now a decade later, the city was walking that back, and the escrow was in jeopardy. I wanted to sue the planning department, which would have cost quite a bit.
The liability would fall on the taxpayers, and I would have to deal with the city on a number of issues. Winning a lawsuit wouldn’t change the mindset at City Hall. The ultimate goal of a lawsuit would be to require the city to accept the private road as a public street, as it once was, and provide city services, such as sewer and street lights.
There is also a matter of an owner’s property rights, which are very few these days. The land owner has a right to do with their property as they choose, but city planning commissions act like HOAs in that regard. Many of my neighbors are MAGA members, they fly the flag, but when it comes to my rights as a property owner, they are raging socialists, who are ready to tell me what I can do with my land, and the city is there to hold their hand. One attorney thought I had a lawsuit based solely on the issue of political discrimination.
The property had become a headache, rather than a place where you can build your dreams. My problem isn’t unique, large developers are conditioned to throw money at the problem and pass their costs onto the buyer.
Not only do city planning commissions place obstacles in the way of private developers, like myself, they rubber stamp shoddy work by house flippers, who can double the value of a shack with a few dollars’ worth of stucco. These are often buildings with serious flaws, grandfathered in.
While the city struggles with state mandates for affordable housing, they actively fuel housing inflation. States like California and Florida are working at breaking up these municipal government cartels by direct legislative oversight of zoning rules.
The buyer of the lot hasn’t broken ground yet. I think he found City Hall was not going to help him. Myself, I was ready to sell the lot and move on. The agent said to me at one point, “you’re emotionally involved with this property.” And yeah I was, but I think most people who buy property have no idea what they are getting into.” Meanwhile I am looking for some land in the rural part of Riverside County, just sagebrush and coyotes. By Steve Green.
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