County Rule Making? – Nope, thanks to the Builder’s Lobby

You bought land out in the country outside of the city limits and built your dream home there, calling it Green Acres. Or you bought into a subdivision just minutes away from the city where land prices made homes more affordable. Then, after spending the money and settling in, you find out that the land next to you was sold and will now become a trash dump, hog farm, chicken ranch, gravel dump, or concrete plant. What can you do? 

Not much; you’re unfortunately out of luck. You can complain to the city planning office, but it’s out of their jurisdiction, so there’s nothing they can do. And the county has no ordinance-making authority to enforce building codes or adopt zoning regulations. 

Nearly 25% of Texans live in unincorporated areas that lack any real power to prevent undesirable businesses from being located near homes and neighborhoods. 

So why don’t Texas counties have ordinance-making authority? It’s quite simple. Over the years, in consecutive legislative sessions, the Texas Association of Builders and their allies, such as Bob Perry, have blocked proposals to grant counties such authority. Homebuilders like having little regulation when building in Texas and even less in the counties. They want to keep it that way.

Homeowners are the real losers when counties have no authority to determine what’s built within their jurisdictions. Just as homebuilders can develop entire subdivisions with no oversight or environmental controls in unincorporated areas, gravel and concrete plants can be built adjacent to existing neighborhoods, creating imminent threats to health and safety. 

There's an ongoing controversy in eastern Travis County where Texas Industries wants to build a concrete plant directly across the street from a relatively new subdivision. The homeowners are distraught because their property values will plummet if the concrete plant is built, and in addition to the pollution and noise from the plant, they must contend with over 40 concrete trucks a day driving past their neighborhood. The Travis County Commissioners don’t want the plant to be built, but the last we heard, they felt they were powerless to stop it. 

As we recall, similar problems exist in Williamson County, where the location of a landfill caused residents a lot of grief. Counties with rapid growth, such as Williamson County, will likely suffer the most serious consequences from the lack of ordinance making authority thanks to the Texas homebuilders lobby.

HOT REACTION to Supreme Court Decision

With the stroke of a pen and no public debate, the US Supreme Court swept aside 100 years of laws restricting corporate funding of political campaigns, making it clear that our Constitution is under attack by moneyed special interests, with serious implications for Texas homeowners.

CORPORATION AS PERSON – “The Corporation” is an award-winning Canadian documentary that describes the nature, evolution, impacts and future of the modern business corporation and the increasing role it plays in society and our everyday lives. Chapters 1, 2, 3 & 6 examine the corporation as a person and apply personality tests to conclude that it behaves as a sociopath or even a psychopath. Corporations are legally bound to serve the interests of shareholders and NOT society.

LEGALIZED BRIBERY – If a bribe is “Something, such as money or a favor, offered or given to a person in a position of trust to influence that person's views or conduct,” then the US Supreme Court just LEGALIZED BRIBERY in the name of Free Speech. Corporations contributing as part of a group or PAC are anonymous. Their money can help determine the outcome of ELECTIONS, but when they are allowed to contribute directly, they can also influence DECISIONS. That’s where the real danger lies.

UNBALANCED MEDIA IMPACT – Consider the advertising power of big corporations or groups like the US Chamber of Commerce versus that of individual consumers and small businesses. That power extends beyond the dollar value and includes reaction time – the ability to place last minute ads prior to important elections or decisions. Grass roots don’t react as quickly.

QUESTIONABLE TIMING – Does it seem odd that a decision overturning 100 years of law and having such a profound effect would be decided with no public debate? Apparently the Court decided to take up the issue right after Obama was elected and the Senate got a 60% super majority. The final decision was handed down just days after the Haiti earthquake when attention of the media and citizen activists was rightfully diverted elsewhere. Yes, it's in very poor taste to imply that this was intentional, but it was convenient.

ELECTED VS. APPOINTED JUDGES – Texas elects its judges, making them susceptible to influence from campaign contributions. We often cite Houston homebuilder Bob Perry’s contributions to all 9 Texas Supreme Court justices and a critical case decided in his favor. Certainly campaign contributions are not the only way to influence decisions, meaning appointed judges aren’t immune.

MONEYED INTERESTS – If all people are truly “created equal” and have “one vote per person,” the Courts' decision circumvents the fundamental principles of our Democratic Republic, giving disproportionate influence to the rich, where CEOs can make 1,000 time more than their average employees. (e.g. $50M/year CEO salary vs. $50K/year for average workers) This imbalance is clearly not in the spirit of democracy.

UNAMERICAN – What’s worse is that multi-national corporations no longer consider themselves to be American companies. They serve global markets and self-interests, yet the Court’s decision gives them greater influence on our government than average Americans. The Court also opened a loop hole for foreign control of our government and a breach of national security. Is this part of The New World Order that conspiracy theorists talk about?

FREE SPEECH – Our Constitution does not equate money with Free Speech. The right to petition the Government can be done with no money at all. But by equating money with Free Speech, the Court gives those with more money MORE Free Speech. This is the antithesis of “One Man, One Vote” and “Fair and equal representation for all.”

BAILOUT MONEY – The companies that got billions of dollars in taxpayer bailout money can now turn around and use that money against us by bribing officials. This includes big oil, big banks and home builders, Wall Street, insurance companies, and car makers. Impeachment anyone? Amend the Constitution? With their new ability to buy political candidates and influence decisions, that’s unlikely. Maybe an outright Revolt is in order.

BIG BUILDERS – From a new article we posted today, even before the Supreme Court decision “The big builders decided they wanted a more ‘direct connection to lawmakers’ after their experience lobbying the government for aid to combat the industry's protracted down turn” (i.e. the Homebuyer Tax Credit). The article describes how they’re breaking ranks from smaller builders and forming their own industry association. We added comments to make the connection to the Supreme Court decision.

The Economics of Structural vs. Cosmetic Elements in Homes

INTRO: Consumers buying new homes have vastly different economic perspectives than contractors building them, banks financing them, or insurance companies and other stakeholders.

HOMEOWNERS: The typical mortgage is a 30-year financial commitment, which often includes a consumer’s life savings. But most consumers don’t understand residential construction science or know about decisions made for them by the builder. So, their buying decisions are made from judgments about what they can actually see and understand: the cosmetic elements, which may include granite counter tops and high-quality faucets, textured walls with rounded corners, Decora-style light switches, and monitored security systems. They don't often consider the unseed structural elements or what happens if these elements fail after the home warranty expires. They don't think about the chances of a foundation cracking due to expansive soil, or pipes embedded inside leaking. If that were to happen, the homeowner would face repairs that can easily cost tens or hundreds of thousands of dollars. Consider the repair cost of faulty plumbing in the slab, and how jack-hammering the slab to get to the plumbing can affect the integrity of the slab itself and the framing on top. When the “repair” causes more problems and renders the house uninhabitable, what’s a homeowner to do?

BUILDERS: Good builders, those who pride themselves on making homes that last, are finding it harder to compete against contractors who conceal serious structural defects and offload their warranty responsibilities to 3rd parties. With no regulatory accountability, these unscrupulous builders have learned how to cut corners on the less visible parts of the home and instead use professionally decorated model homes to showcase cosmetic features – the “wow” factor.

MATERIAL SUPPLIERS: As the worldwide price of copper pipe increases, suppliers have responded with less expensive plastic plumbing, which is then embedded in the concrete slab foundation and never again seen. And as lumber costs rise, framers have responded with cheaper grades, smaller sizes and recycled and spliced wood, which can affect the structural integrity of load bearing walls. Builders may argue that decisions to use cheaper materials help them extend homeownership to lower income families, but the end result is a significant number of homes with structural defects that can become uninhabitable, affecting a downward spiral of property values in entire neighborhoods. Rather than covering up shoddy work and substandard materials, we encourage builders to improve their efficiency with on-site supervision, coordinated scheduling of subs, and better communication with Spanish-speaking workers.

MORTGAGE COMPANIES: Banks, like consumers, have little to no knowledge of homebuilding and have shown little interest in a homebuilder's qualifications or reputation or their decisions relating to structural elements or infrastructure components. Instead, the factors banks and mortgage companies use to approve loans include (1) the buyer’s credit worthiness, (2) collateral based on the home’s appraised value, (3) the interest rate, and (4) insurance that covers the home itself and the borrower. Before the housing bubble burst, government regulations forced banks to take on riskier loans to minorities and low-income families with questionable credit and low down payments. They responded by offloading their financial risks by selling mortgage backed securities along with credit default swap “insurance.” And when supply outstripped demand and the bubble finally burst, it became clear that many appraisals were grossly inflated. The banks were in big trouble. Because of the global financial collapse, selling mortgage backed securities is more difficult. We hope banks will now support residential construction reforms that keep them from being stuck with defaulted loans due to construction defects.

INSURANCE COMPANIES: Because current laws allow insurance companies to raise rates whenever profits fall below certain levels, they have less incentive than banks to improve the quality of residential construction. Their biggest exposure would come from widespread damage from hurricanes, tornados and floods. It takes a long time to recover from such losses even after raising rates.

POLICY MAKERS: When politicians understand these different perspectives and natural biases, they can better balance their moral obligation of protecting the health, safety and welfare of the public vs. the lobby influence aimed at protecting practitioners. Another important perspective for them is that a few homes with major construction defects can have a spiraling effect on property values of entire neighborhoods, and thus the tax base that funds public safety and kids’ education.