Home Real Estate Why not try homesteading instead?

Why not try homesteading instead?

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Courtesy of Zillow’s blog, we hear about the economically depressed city of Youngstown, OH razing thinly populated neighborhoods in order to save on public services costs to the area. There are lots of reasons to do this — abandoned homes can become a base for crime, drugs, and other naughty activities that civilized society frowns upon. And I’m not opposed to the “Honey, I Shrank the City” movement.

On the other hand… I’m just wondering…

Why not try homesteading?

And I don’t mean the modern definition of the term that refers to bunch of neo-hippies practicing some “back to earth” sustainable living type stuff. I mean the original, 1862 version of the word homesteading.

The 1862 Homestead Act required that the claimant “improve” the land he was claiming, and stay there for five years. At the end of that period, the land was his free and clear.

A homesteader had only to be the head of a household and at least 21 years of age to claim a 160 acre parcel of land. Settlers from all walks of life including newly arrived immigrants, farmers without land of their own from the East, single women and former slaves came to meet the challenge of “proving up” and keeping this “free land”. Each homesteader had to live on the land, build a home, make improvements and farm for 5 years before they were eligible to “prove up”. A total filing fee of $18 was the only money required, but sacrifice and hard work exacted a different price from the hopeful settlers.

This was an amazing chapter in the history of the United States. Former slaves, freed by the Civil War, could become landowners. New immigrants, women, the poor — all had a real shot at making a life for themselves and achieving the dream of landownership.

Why not again today?

Suppose Youngstown were to simply condemn the houses, then hand out title to any U.S. citizen who claimed a property, with some conditions, similar to the one in the 1862 law.

  • You must stay in the residence for at least five years.
  • During your stay, you must maintain the house in reasonable condition and not engage in any illegal activities in the house.
  • It must be your primary residence for those five years.
  • You must pay all property taxes and government fees associated with homeownership, such as for trash removal, water and sewage, etc.

At the end of five years, title to the house belongs to you free and clear.

If there is a homelessness problem in this country, rather than continuing to invest in public housing, why not encourage (in the most radical way possible) private homeownership for the poor?  Imagine a poor family suddenly having title to their own house after five years.  What can they do with that?  If the economy turns around because of an influx of people, businesses start up again, jobs start to get created, and the value of the property becomes something substantial… those people might have a real nest egg for retirement, or use the equity in the house to start a business or go to college or whatever else they want.

And Youngstown wouldn’t just have a reduced cost for services, but a higher tax base as well.

Rather than embracing defeat and shrinkage, a city faced with the blight of mass foreclosures can actually revitalize their entire economic base simply by giving away abandoned houses.  The “owners” are not likely to be complaining, seeing as how the alternative is to have the property razed and turned into a public park or some such.  After Kelo, I can’t see how this sort of program would not pass muster, especially as it pertains to abandoned homes in blighted areas.

What am I missing here?

-rsh

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Rob Hahn
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

7 COMMENTS

  1. Thanks for that article, Diane. I remember studying adverse possession in law school as well — I always thought property law was sort of fun in a twisted kinda way. 🙂

    I think the difference between homesteading and squatting is that the former is an actual official governmental program. You would have to condemn the property through eminent domain or some similar power (acquire through tax liens, etc.) then hand it out to claimants. Squatters simply use the common law to effectuate the same thing, but few people are going to go squat an abandoned house when after nine years, the actual owner can show up and throw you out.

    -rsh

  2. Thanks for that article, Diane. I remember studying adverse possession in law school as well — I always thought property law was sort of fun in a twisted kinda way. 🙂

    I think the difference between homesteading and squatting is that the former is an actual official governmental program. You would have to condemn the property through eminent domain or some similar power (acquire through tax liens, etc.) then hand it out to claimants. Squatters simply use the common law to effectuate the same thing, but few people are going to go squat an abandoned house when after nine years, the actual owner can show up and throw you out.

    -rsh

Comments are closed.