The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies [Paperback]

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 homeowners principal assethis homewill 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.

Although other commentators have bemoaned voter apathy and the lack of civic engagement, Fischel shows how democracy thrives at the local level. As the homevoter looks at all the factors that affect property valuesgood schools, effective management of traffic, fewer undesirable uses such as landfills and prisonshe or she becomes politically engaged& The Homevoter Hypothesis&[is] an important contribution to the ongoing conversation about how best to manage growth.Fischel&describes homevoters as homeowners whose votes determine the character of local government. From their ranks comes the median voter, whose needs are most likely to be met by democratically elected officials& Fiscal efficiency in local government, Fischel argues, requires close correspondence between taxes and the services they fund& Fischel rounds out his brief l#;