Fear and Loathing: Combating Speculation in Local Communities

Local governments commonly respond to economic and social pressures on property by using their legal power to regulate land uses. These local entities enact regulations that limit property development and use to maintain attractive communities and orderly growth. This Article argues that government entities should employ their expansive land use powers to limit investor speculation in local markets by restricting the resale of residential housing for three years. Investor speculation, and the upward pressure it places on housing prices, threatens the availability of affordable housing as well as the development of stable neighborhoods. Government regulation of investor speculation mirrors existing, privately imposed restrictions that prevent individual purchasers from appropriating property value that rightfully belongs to surrounding neighbors. This progressive allocation of property value is supported by earlier urban theorists like Henry George and Ebenezer Howard, and is consistent with modern land use legal decisions and policy.