Extortion in Palo Alto

by Don Boudreaux on November 21, 2015

in Housing, Other People's Money, Property Rights, Seen and Unseen, Video

This short video from the Pacific Legal Foundation details an attempt by government – in this case, that of the city of Palo Alto, CA – to extort money on a grand scale from innocent people.

Below the video is my summary of the events.

(1) Peaceful, entrepreneurial people start a successful business, one that makes affordable housing more available than it would otherwise be in Palo Alto;

(2) these entrepreneurs, using their own funds, have for nearly 30 years done far more than almost anyone else on the planet to make it possible for people of modest means to live in Palo Alto;

(3) meanwhile, other people – those assembled into an organization called ‘government’ along with those who are especially influential with those people so assembled – have consistently used threats of violence to artificially obstruct the growth of the housing stock in Palo Alto and, thus, have done far more than almost anyone else on the planet to make it usually difficult for people of modest means to live in Palo Alto;

(4) now that the peaceful entrepreneurs seek to change the manner in which they use their own property (that is, they want to go into another peaceful line of business), they are prevented by government from doing so unless these entrepreneurs first pay a fee extorted from them by the government – a fee to be used, ostensibly, to help address the problem of a severe lack of low-cost housing in Palo Alto, so

(5) those people who have been especially active at artificially reducing Palo Alto’s supply of housing for low-income people are – under the pretense of being great champions of low-income people seeking housing in Palo Alto! – now unjustly (and unconstitutionally) penalizing other people (those who, again, have actually worked hard over the years to make low-income housing more available) for now moving into another line of work.

The immorality and hypocrisy on the part of the thugs in Palo Alto’s government are manifest.  The entrepreneurs in this case are being punished for having for ‘only’ 29 years, rather than for an indefinitely long time period, done more than their share to make housing more affordable in Palo Alto.  If the city government wins this case, the message will be:

“If you choose to use your property today in commercial ways that are especially helpful to low-income people, be aware that you are thereby committing yourself to continue to use your property in such ways indefinitely.  You will lose your legal right to use your property as you choose, although you will be able pay a stiff fee to buy back for yourself the right that was taken from you.

“Had you, by the way, chosen in the past to use your property in some manner that was of no special benefit for low-income people – had you instead, say, built luxury condos – you would not today be prevented (or fined) from changing the manner in which your property is used.  It is only because you once chose to be a special friend to the poor that we, the government, are forcing you to continue in your current line of work.  And the fact that our action against you will – especially if we defeat you in court – ensure that in the future no one else starts businesses in our city to increase housing for the poor is of no concern to us.  (Indeed, such an outcome is one that we’d applaud were we not too economically ignorant to be aware of this outcome!)”

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