What do you think?
Rate this book
The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies
Just as investors want the companies they hold equity in to do well, homeowners have a financial interest in the success of their communities. If neighborhood schools are good, if property taxes and crime rates are low, then the value of the homeowner's principal asset--his home--will rise. Thus, as William Fischel shows, homeowners become watchful citizens of local government, not merely to improve their quality of life, but also to counteract the risk to their largest asset, a risk that cannot be diversified. Meanwhile, their vigilance promotes a municipal governance that provides services more efficiently than do the state or national government. Fischel has coined the portmanteau word "homevoter" to crystallize the connection between homeownership and political involvement. The link neatly explains several vexing puzzles, such as why displacement of local taxation by state funds reduces school quality and why local governments are more likely to be efficient providers of environmental amenities. The Homevoter Hypothesis thereby makes a strong case for decentralization of the fiscal and regulatory functions of government.
344 pages, Hardcover
First published November 30, 2001
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 5 of 5 reviews
August 16, 2022
I understand NIMBYs better, still don't like em.
March 17, 2023
Top notch book
Fischel has the rare ability of combining a clear academic to real world implications. He has a positive view of the of the homevoter (doubly), in the meaning that he believes that homeowners have good material incentives to ensure that their local communities are well functioning.
On a substantive point, I think that his interpretation of how the Tiebout model solves the public goods model is basically by transforming them to club goods. So basically, the problem with public goods is that the state will oversupply them, or citizens will free ride. In the Tiebout model, their is an optimal allocation of public goods, because people migrate from municipality to municipality. So if people prefer low taxes and few public goods, they simply move to somewhere else. So everybody is happy in this world.
For Fischel, its important to keep this mechanism rolling, otherwise the good municipal incentives are killed. The public good in focus is schools, and good schools are capitalized into house prices. So people get the schools that they pay for with their property taxes. And people can't simply move their kids to the neighbooring school if they don't live there. And everyone's happy.
For me, this seems like schools have become a sort of club good for local juridistiction member, and although this may "work", it doesn't work because it supplies public goods, because the mechanism is exactly by restricting access. And of course people in well-off location are for, because there is 0 redistribution.
Fischel has the rare ability of combining a clear academic to real world implications. He has a positive view of the of the homevoter (doubly), in the meaning that he believes that homeowners have good material incentives to ensure that their local communities are well functioning.
On a substantive point, I think that his interpretation of how the Tiebout model solves the public goods model is basically by transforming them to club goods. So basically, the problem with public goods is that the state will oversupply them, or citizens will free ride. In the Tiebout model, their is an optimal allocation of public goods, because people migrate from municipality to municipality. So if people prefer low taxes and few public goods, they simply move to somewhere else. So everybody is happy in this world.
For Fischel, its important to keep this mechanism rolling, otherwise the good municipal incentives are killed. The public good in focus is schools, and good schools are capitalized into house prices. So people get the schools that they pay for with their property taxes. And people can't simply move their kids to the neighbooring school if they don't live there. And everyone's happy.
For me, this seems like schools have become a sort of club good for local juridistiction member, and although this may "work", it doesn't work because it supplies public goods, because the mechanism is exactly by restricting access. And of course people in well-off location are for, because there is 0 redistribution.
November 11, 2020
This book challenged my thinking on local policy more than any other in a while. An insightful look at local government that explains why it usually works and why it sometimes falls short. Generally supportive of local control, but also somewhat heterodox. Covers education funding lawsuits, vouchers, sprawl, zoning, NIMBY and more.
January 6, 2015
The “homevoter hypothesis” of this book is that local governments make land use decisions based on the views of the typical homeowner. Because a house is a large and illiquid investment, a “homevoter” (Fischel's word for a home-owning voter) often focuses not on maximizing property values, but on reducing the risk of a decline in property values. As a result, homevoter-dominated local governments shun new residential development (especially apartments or anything that might bring in poor people) or commercial development near housing, because even if those developments aren’t going to reduce property values, why take the chance? In addition, homevoters prefer small suburbs to consolidated regional governments, because larger governments might favor the broad public interest in new housing over homevoters’ neighborhood concerns.
Generally, Fischel seems to think that this is fine. For example, he thinks that homevoters are likely to maximize environmental protection, because pollution is bad for property values. Fischel rejects “environmental justice” claims based on the proximity of polluters to poor neighborhoods, reasoning that these neighborhoods benefit from cheaper housing, bigger commercial tax bases and closer proximity to jobs. Fischel also defends use of local property taxes to fund education, because good schools help property values, so homevoters will be willing to support high property taxes in order to improve schools.
Fischel thus attacks attempts to equalize school finances between property-rich and property-poor towns; as he points out, property-poor towns are not always full of poor people, since troubled urban areas often have fairly strong commercial tax bases. Although he admits that the data on this issue is ambiguous, he further claims that in pro-equalization states, many towns spend less on education and thus suffer from weaker schools. But if I understand Fischel correctly, he does not seem to think that increased state subsidies to poor cities did not improve education. But how can it be the case that more spending is good when tax money goes to rich suburban schools, yet not so good when it goes to poor schools? More broadly, Fischel doesn’t seem particularly interested in failed municipalities- poor cities that, despite having adopted zoning decades ago, don’t seem able to preserve property values or retain middle-class residents.
Fischel does admit in the last chapter or so that homevoters are likely to underprovide transit-accessible housing and housing for the poor. Given the popularity of homevoter-oriented zoning, he does not propose aggressive remedies for these problems, but instead endorses a variety of modest proposals that are more politically feasible but may be only slightly helpful. For example, he proposes improving education for the poor by creating “public-school supplements” for low-income families, payable directly to the public schools of their towns of residence. Ideally, suburbs will be willing to allow low-income housing in exchange for the extra money.
Generally, Fischel seems to think that this is fine. For example, he thinks that homevoters are likely to maximize environmental protection, because pollution is bad for property values. Fischel rejects “environmental justice” claims based on the proximity of polluters to poor neighborhoods, reasoning that these neighborhoods benefit from cheaper housing, bigger commercial tax bases and closer proximity to jobs. Fischel also defends use of local property taxes to fund education, because good schools help property values, so homevoters will be willing to support high property taxes in order to improve schools.
Fischel thus attacks attempts to equalize school finances between property-rich and property-poor towns; as he points out, property-poor towns are not always full of poor people, since troubled urban areas often have fairly strong commercial tax bases. Although he admits that the data on this issue is ambiguous, he further claims that in pro-equalization states, many towns spend less on education and thus suffer from weaker schools. But if I understand Fischel correctly, he does not seem to think that increased state subsidies to poor cities did not improve education. But how can it be the case that more spending is good when tax money goes to rich suburban schools, yet not so good when it goes to poor schools? More broadly, Fischel doesn’t seem particularly interested in failed municipalities- poor cities that, despite having adopted zoning decades ago, don’t seem able to preserve property values or retain middle-class residents.
Fischel does admit in the last chapter or so that homevoters are likely to underprovide transit-accessible housing and housing for the poor. Given the popularity of homevoter-oriented zoning, he does not propose aggressive remedies for these problems, but instead endorses a variety of modest proposals that are more politically feasible but may be only slightly helpful. For example, he proposes improving education for the poor by creating “public-school supplements” for low-income families, payable directly to the public schools of their towns of residence. Ideally, suburbs will be willing to allow low-income housing in exchange for the extra money.
Read
September 6, 2007an interesting view of how homeowners shape municipal policy and urban migration patterns through voting and/or moving in order to protect their property values.
Displaying 1 - 5 of 5 reviews