Restriction on Ownership and Its Impact on Real Estate Market

Summary of the Article

Real estate is a sector that has attracted several investments in recent years. The sector growth has attracted several rules and regulations to protect both private and public interests of its acquisition and usage. The USA government federal rules have to a large extent been duplicated in the other states to help it streamline the land rates tax system (Charles & Marcus 72). The article deals with a case between the commissioner and the need to condemn a public and private land in Methow valley.

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From the article, the public utility district won the case therefore disallowing the installation and maintenance of power lines through public and private lands. The state is believed to be the custodian of public interest and its operations and decisions are termed prudent. This is clearly seen from the reluctance by the attorney general’s office to appeal the decision of Okanogan county superior court.

The attorney general’s office is looking into reasons why the case was rubbished and its ultimate effect of the appeal on the state. However, the matter discussed in the article is weighty, as the Washington Supreme Court has granted a go-ahead to an appeal to condemn an easement of power installation through public and private lands. According to the article, issues of enjoyment of property, restrictions, and government interest are brought to the limelight.

Description of the type of estates inland or the type of public/private restriction addressed

The issue discussed relates to public restriction on ownership, commonly referred to as Eminent domain. According to the restrictions associated with this domain, the government has the ultimate right and power to acquire land for public use or to satisfy a public interest (Charles & Marcus 141).

The concept of public use is not limited to the acquisition of property for the construction of public infrastructure i.e. schools and hospitals only. The definition of public use is broad and it covers up to the acquisition of land for the development or growth of towns and cities. In accordance with the article, the state wants to install and maintain a power line. The government has the power then to acquire the land in accordance with the Eminent domain, considering the aggrieved parties receive just compensation for their product. The interest of the public, according to this restriction, comes first before individual rights.

The government’s other responsibility is fostering development in the state and therefore acquisition of property is important to ensure the state development is realized. The acquisition provision is envisaged in the federal constitution but it is applicable also in the states including Washington. Before the government acquires the property, prove beyond a reasonable doubt is paramount. According to the article, the court dismissed the case may be partly because the government failed to ascertain the needs and benefits of the property to the public or the owners’ compensation amounts were unsatisfactory.

Taking of private property by condemnation draws more debate as far as compensation is concerned. The amount paid to an individual as compensation by the condemning authority may fail the satisfactory test (Xinhao, et al. 17). The aggrieved is entitled to seek legal redress of the matter to compel the state to pay a reasonable amount. Moreover, the property owner, arguing that due to the nature of government developments, the value of the property has ultimately reduced may instigate condemnation proceedings.

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The owner’s case is based on the devaluation of property to the extent that the government seems to have taken ownership of the property. The court’s decision in accordance with this case may compel the government or the development authority to purchase the land. The case described in the article might have arisen from the devaluation of property due to the installation and maintenance of a power line through a property.

Analysis of the impact of the issue on the broader real estate market

The article vividly shows a tussle between property owners and the state. The public utility district managed to convince the Okanogan Supreme Court that the government’s decision to acquire their property was imprudent. The subsequent appeal decision by the Washington state Supreme Court corrodes government, public, and investor image. Many real estate developers, in line with the case, will reduce their investment in the real estate market.

Their decision will be largely driven by the uncertainty of the estate’s future given the initial decision is overturned by the appeal court. The fact that the government has enough machinery to fight for its development blueprint is a disadvantage to real estate developers. The channeling of funds to address the case will deprive the future real estate markets of investment funds. The problem will increase immensely given the public utility district losses the case to the government. The reduction of morale will drive out real estate investors out of the sector because their sole aim is to make profits.

The devaluation of property caused by the government’s decision to install and maintain the power line through the property reduces the pricing in real estate. The decision not only affects the aggrieved parties but also causes a nuisance to the users of property and in extension their neighbors. The adverse impact on property use may call for property dumping at cheaper amounts. The government’s mild compensation fund decreases the real estate market.

However, given the government considers the devaluation case of the property owners as advocated for by the public utility district and subsequently compensates the aggrieved fully, the real estate market will increase. The move will motivate the aggrieved party to acquire property in a convenient place (Bris & Cabolis 53).

The generated interests from the case will stall many development projects in the real estate market in the short run. The decision of the court might favor either party. In the case where a public utility district emerges the winner, investor confidence will be enhanced. The effect of this confidence in the real estate market will ultimately be felt in the level of investments and developments in the sector.

It is all about perception; in this case, investors will view the decision to be sensitive enough to their plight and that government decision are not always final. Moreover, given the court decides the government should have its way and install the power line; the impact will be both positive and negative to the real estate sector. On the positive, the value of the surrounding property will appreciate because of access to power. This is positive to the real estate market as developments in the area will sprout. The rental prices and purchase of a house will largely increase, attracting investors to the area.

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The installation and maintenance of the power line through the Methow valley will be a blow to investment in the real estate sector. The power line will not only devalue the property but also is a cause of nuisance to the property owners. This will drive away investors in the region. In accordance with the aforementioned description, planning is paramount to address the interests of both the government and real estate developers. This will curb the inconvenience caused by court cases.

Eminent domain explanation

The article discusses the Eminent domain in a wider margin. The government’s intention is to install and maintain a power line through the public and private lands in the Methow valley. The initial decision by the court to rule in favor of the public utility district discredited the government’s development decision to continue with the project. However, the government being the ultimate custodian of public interests has a reprieve from the appeal granted by the Washington Supreme Court. Initial decision fostered confidence in real estate markets. Investor confidence is a plus to the sector as it increases the level of investments and development of the property. Individual decision to purchase property is directed by the present happenings which postulate future decisions.

The appeal granted to the government has adverse implications to the real estate market in the short-run (George et al. 101). The investor’s adoption of wait and see attitude will decrease real estate markets. The final case decision will affect the real estate markets, both positively and negatively. Given the decision favors the Washington state, the development will devalue the property in Mathew valley.

The nuisance caused by the project will reduce the level of investments in the region. This will negatively affect the pricing of estates and therefore decrease the market. A positive impact of the project is the improved access to a basic development commodity, in this case, power. This will boost the neighborhood estate prices and attract more investors and consequently increase the investment market.

Works Cited

Bris, Aruto and Cabolis Christos. ‘‘Corporate governance convergence by contract: evidence from cross-border mergers.’’ Working Paper, Yale School of Management, 2002.

Charles, Floyd and Marcus Allen. Real estate principles. New York: Dearborn Real Estate, 2002.

George Gaines, David S. Coleman, and Linda L. Crawford. Florida R.E. principles, practices, & law, Michigan: Dearborn Real Estate, 2003.

Xinhao Wang, Rainer Alfred and Vom Hofe. Research methods in urban and regional planning. California: Springer, 2007.

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StudyCorgi. (2021, March 12). Restriction on Ownership and Its Impact on Real Estate Market. Retrieved from https://studycorgi.com/restriction-on-ownership-and-its-impact-on-real-estate-market/

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"Restriction on Ownership and Its Impact on Real Estate Market." StudyCorgi, 12 Mar. 2021, studycorgi.com/restriction-on-ownership-and-its-impact-on-real-estate-market/.

1. StudyCorgi. "Restriction on Ownership and Its Impact on Real Estate Market." March 12, 2021. https://studycorgi.com/restriction-on-ownership-and-its-impact-on-real-estate-market/.


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StudyCorgi. "Restriction on Ownership and Its Impact on Real Estate Market." March 12, 2021. https://studycorgi.com/restriction-on-ownership-and-its-impact-on-real-estate-market/.

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StudyCorgi. 2021. "Restriction on Ownership and Its Impact on Real Estate Market." March 12, 2021. https://studycorgi.com/restriction-on-ownership-and-its-impact-on-real-estate-market/.

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StudyCorgi. (2021) 'Restriction on Ownership and Its Impact on Real Estate Market'. 12 March.

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