The Pottsville Plan
November 21, 2011
What is the Pottsville Plan? Why do I keep hearing about it?
Below is the step one plan. It’s a single step that can and will fix the economy with one simple step. It doesn’t require a bailout, it doesn’t require another stimulus, it doesn’t raise taxes.
In fact it doesn’t add to the deficit at all. Economically it’s sound, financially it’s sound, environmentally it’s sound.
We all know that the root of the problem is the housing crisis. It limits mobility, it limits peoples ability to find jobs in other areas (since they can’t sell their home) it limits their ability to refinance since their homes are under water. It skyrockets the foreclosure rate, it hurts business lending and personal lending. It destroys families.
It wrecked havoc within the financial system ranging from the mobility and obvious problems listed above to the massive amounts of mortgage backed securities that destroyed retirement funds. In other words the problem was and still is rooted in housing.
The solution would immediately increase the value of people’s homes, and yet would not cost a single penny.
A single 1 sentence law would fix the entire economy within a short order. The catches are that since it will increase the value of housing prices dramatically over the course of the next year or two, it might make prices higher for individuals just entering the work force to purchase their new home.
The counter-claim to this however is that these same individuals are currently locked out of the housing market due to lack of lending anyway, so no harm will actually happen as compared to the current situation. Also unimproved land owners will see their property value continue to be valued as they are today. In other words, as compared to today’s market it can only offer improvements.
But what is that law?
“No structures may be built on unimproved property”
This law will expire in 25 years.
That’s it people. That would fix the entire economy. If you want a new house, you have to buy someone’s older home, tear it down and build a new one in that location. If you want to build a housing development, buy a run down area of a city, level it, and build new homes there. Want a new mall or shopping center? Tear down blighted areas and build a new one on the property, or improve the existing structure.
Why is it green? It completely eliminates urban sprawl. It fixes blighted areas in short order, it will improve the general quality of life for the vast majority of Americans.
Why will banks start lending? Because homeowners now are sitting on the only property that can be used for building. In other words they will be sitting on gold.
Exceptions would be for mining, oil drilling, etc, the goal is not to hinder economic development, but rather to save the housing and commercial property values.
It’s a simple rule, it’s easy to implement, and it will save the entire housing market in one fell swoop.
As it stands now the inventory of houses on the market vastly exceeds the current demand, even after passing this law it will take time to weed out the existing homes for sale. Though speculation will drive the property values up quickly and put homeowners in the black within a year (from the current underwater levels they are in).
Environmentalists will enjoy the concept of a federal law barring the destruction of green spaces, Bankers will love the idea of being able to safely lend to individuals again virtually guaranteeing the fact that the home prices will go up. Contractors will love that not only do they get to build new homes again, but they get the added bonus of being able to charge for demolition as well. Homeowners will love the fact that their homes are no longer underwater.
The alternative is we can continue down the current path of massive levels of individuals with homes underwater, home and small business lending freezes, and urban sprawl.
Why is it called the Pottsville Plan? Because it was created in Pottsville, Pa.
Regards,
Roger Wehbe
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