Public Restrictions to Ownership

Public restrictions on real estate generally come from the government. These restrictions are meant to support the general welfare of a community. The government has the right to assert its police powers, the power of eminent domain, and the power of escheat. The power of eminent domain has been a controversial issue for those affected by it. This power gives the government the right to take your private property without your consent in exchange for "just" compensation(not market value). The government typically uses this power to implement a large building project for the city. It puts a large burden on the homeowner, but the project is typically executed for the general betterment of a community.

Battle for Brooklyn

Battle for Brooklyn is a great example of what happens when the government implements their power of eminent domain. This power is obviously a very unpopular one, but sometimes the government deems it necessary in order to ultimately improve the community.


A pivotal role of government is to use their police powers to promote the health, safety, welfare, and morals of a community. Zoning, building codes, and rent control are examples of how they use this power in real estate.

Private Restrictions on Ownership

The ownership of real estate does not ensure free and complete use of the land. Private restrictions can be placed on property by the Home Owners Association(HOA) of a development. The HOA can increase the value of a development by enforcing certain standards on how its inhabitants should care for and use their property. In most cases these restrictions keep neighborhoods looking clean and uniform. Other times, these rules can be quite a burden. For example, my neighborhood has pine trees growing in the front yards. These trees tend to shed their pines throughout the year, so to keep the yard looking nice we use the needles as mulch for the garden around the tree. Recently we have received our third notice from the HOA insisting that we rid our yard and garden around the tree of the pine needles. In an attempt to comply, we cleaned out the garden as much as we could and planted more flowers. Felling satisfied, we figured this would be the end of the complaints. Low and behold, we receive yet another warning regarding the pine needles. I am quite positive most every house in the neighborhood is having the same problem. I don't know what they expect us to do, or what they will do to enforce this extreme request.

10 Things the HOA Won't Tell You
This articles explains an extreme case of how the HOA can abuse its power. A man was fined monthly by the HOA for planting too many roses in his garden. When the fines piled up, they placed a lien on his house and threatened to forclose. He took the board to court but lost, setting him back $70,000 in legal fees and lost his home to the bank.
You would be surprised just how much power these groups have over homeowners. They can essentially make up their own rules as they see fit, even though they may not be very reasonable. The article advises you pay your monthly dues and comply as best you can.

Home Owners Association Fees
The 81 year old veteran in this case had agreed to a $100 HOA fee, but soon he discovered he was being slapped with automatic late fees and other fines. He was unable to pay these fees, but luckly with the help of his neighbors, he was able to raise enough money to pay off the HOA and avoid foreclosure.

Property Rights and Legal Descriptions

Property Rights
This article about property rights comes from the encyclopedia of economics and is written by Armen A. Alchian. He provides a very technical description of property rights. He rejects the common notion that property rights go against human rights. He believes that property rights are human rights. He gives the definition of property rights to be "the exclusive authority to determine how a resource is used, whether that resource is owned by government or by individuals." The task of defining and allocating property rights within a society is not an easy one. Private property holders can have exclusive rights to the land, or they may have restrictions on how the land can be used. Either way, the rights of the property owner must be explicitly stated.

Real Estate Legal Descriptions

This link conveys in plain English what the legal description of real estate is. They narrow it down into two categories of property; platted, and unplatted. The plat gives very specific location, size, and shape of each plot of land. The direction and distance of property lines are measured by a system of metes and bounds. The picture on the right shows how a developer would use this system to plot out the property lines of a subdivision.

The Importance of Real Estate

How Does Real Estate Affect the U.S. Economy?
The article above, written by Kimberly Amadeo, contains information about how the economy is tied to real estate in many ways. Families benefit from real estate by owning a home which provides them with a place to live. A home is also a valuable asset to own to provide security in uncertain times. Businesses acquire corporate real estate to run their everyday operations. These businesses create millions of jobs for people in the community. The construction of real estate also bring jobs into a community. Real estate construction has been down from 8.9% in 2006 to 5% in 2011. Since the downturn in 2008, businesses have been reluctant to build and expand. But as we head into 2013, I would venture to guess that construction will start to pick back up as the economy heats back up again. In response to increased real estate construction, unemployment should start to decline because of the increase in construction jobs, as well as the jobs the new buildings will create.

Financial Crisis Explained

The financial crisis of 2008 was a prime example of how real estate can effect the economy. The crisis was rooted within the housing industry. Legislation had been passed to make owning a home more affordable by making it easier to be approved a home loan, or mortgage. People who had no credit, bad credit, or even no proof of income were given these mortgages. Banks did not mind giving out these sub-prime loans because they would just package them off and sell them to financial institutions. The investors bought the mortgages anticipating a nice return, but because of the low grade of a lot of the loans, home owners began to default on their mortgage payments. Eventually, so many loans were defaulted and houses foreclosed, houses began to decline in value for the first time. The financial institutions were losing money and were on the verge of bankruptcy. In the midst of the housing crash, the U.S. experienced the worst recession since The Great Depression. The economy is still in recovery, but the future of real estate is getting more promising every day.

Introduction

Howdy, and welcome to my blog!
For starters, allow me to introduce myself. My name is Amanda Rodarte; born and raised in Austin, Texas. I am currently a student at Texas A&M University in College Station (Fightin' Texas Aggie class of 2013...WHOOP!). I will be graduating May, 2013 from Mays Business School with a bachelors degree in business finance. As I finish up with school, I will be on an extensive search of  a sustainable career within financial services.

On a more personal level; If I could say one thing about myself, it would be that my family is the most important thing in the world to me. Within that family include some of the best friends in the world. They have made a home in a very special place in my heart as well.

My hope is that this blog with give people a better grasp of who I am as I continue to make posts.

THANKS,
And Gig'em!