EDITORIAL: Housing extortion

Back in May, home prices in California reached record levels, surpassing their previous highs seen in 2007 before the housing crisis sent the nation into a prolonged recession. The rise in prices has been driven by a number of factors, most notably the state’s hostile regulatory environment toward development.

Take the case of Dart and Esther Cherk.

When the couple, both 83 years of age, sought to supplement their modest retirement, they decided to a sell a portion of a 3-acre vacant lot in Marin County that they had inherited from Dart’s father. The property had been in the family for decades, and Dart, who is an architect, thought the best way to get the most value for the land would be to subdivide it into four lots, sell them and live off the proceeds.

The county had other ideas, however.

First, the county rejected the Cherk’s request to create four lots, limiting them to just two. County officials also told them that dividing the property would require a permit — and that permit would cost the ridiculous sum of $40,000. They claimed the fee was necessary to help offset the community’s dearth of affordable housing.

Obviously, none of these bureaucrats had ever absorbed Economics 101.

In fact, the fee is nothing but thinly veiled shakedown. Nothing about the Cherk’s lot split would exacerbate the county’s dearth of affordable housing. Rather, it is this kind of increased supply of buildable land that can help meet demand for affordable housing.

Even worse, the Cherks also discovered that the county had waived similar fees for nearby property owners who split similar lots.

To come up with the money to pay the fee, the Cherks have had to take out a mortgage on their home — a home they already owned free and clear. They also had to sell both divided lots in order to make ends meet.

In August, the couple joined forces with the Pacific Legal Foundation, a national property rights watchdog group, to file a lawsuit in the Marin County Superior Court. As the foundation correctly points out, Supreme Court precedent says regulators may impose fees as a condition of a land use permit only if the proposed project will bring about a negative public impact. The Cherk’s lot split does the opposite, potentially increasing the housing stock in an area that desperately needs it.

A win for the Cherks will be a win for property rights.The couple shouldn’t have to pay a massive fee simply to use their own land. And the fact that they’ve been forced into court on this matter tells you all you need to know about the Golden State’s outrageous housing costs.