The Supreme Court ruling made in June this year allows local governments to force home and property owners to sell out and make way for private development. This has thrown home and property owners into a panic. The ruling has a message that no one owns his home as per the Washington Post’s interpretation. But a closer look at the law is nothing than what the writer says. No one really owns his home if one can be forced to sell his home for whatever reason. Human rights activists and property owners have come out guns blazing to reject the ruling by filing for an appeal. They say that the ruling contravenes the Fifth Amendment to the constitution, which prohibits the government from taking a citizen’s property unless it is for public use only.
The ruling also contravenes the teachings of a free market existing in the US. A free market means that the exchange of goods and property between individuals is done through the mutual agreement without coercion or intimidation to buy or sell. In such a market, transactions are done only on the basis of a willing buyer and willing seller. Unfortunately, the ruling on the property by the Supreme Court is characteristic of a regulated market. The rule thus denies the economic sense of the rule of demand and supply. This is very detrimental as it will affect the demand and supply of properties and homes, thereby throwing the economy in disarray.
Economists, on the other hand, have been quick to question the possible implication of such a ruling which may lead to the imminent fall of the housing sector. Developers and private development agencies are worried about the panic that has been aroused by the ruling. Colander (2008) writes that there is a very strong relationship between the right to freedom and the right to own property. He says that the right to freedom allows one to do as one pleases, even with his property. This is a very crucial connection between rights and democracy. He also adds that economic growth is more vibrant in a democratic nation, and one demonstration of democracy is the observance of human rights. The ruling thus goes against economic sense and free-market dynamics. In the long run, it might bring down the housing mortgage sector as individuals will be afraid of owning property lest they are forced to sell out. To preserve a free market and the right of property ownership, the ruling should be reviewed.
References
Colander, D. Post Walrasian Macroeconomics 7th edition, New York: McGraw Hill, 2006.