The West End Home Assurance Value program was a cockamamie mandatory house price insurance program that started in Pittsburgh in . The idea was that every homeowner in a particular district would pay into the fund, then they could choose to have their home assessed (at an additional fee) and if they later sold their home for a lower price than this assessment, the insurance program would pay them the difference.
It prompted this threat of tax resistance right from the get-go:
I refuse to pay this tax on West End homes
Last week, City Council approved the West End Home Assurance Value (or WE-HAV) program for the residents of 12 western communities in Pittsburgh. Homeowners will be required to pay an extra $20 a year in property taxes, which will create a pool of money to protect home values (“Council OKs West End Improvement District,” ). Next year and maybe the year after that it will be $20, but what about 10 years down the road?
Will it be $20, $40, or $100? No thanks. I will take care of my home on my own. I need no help from those who cannot keep their collective noses out of my business.
I will not pay this tax next year or any other year. I will let the market decide what the value of my home will be. Councilman Alan Hertzberg is asking residents “to be bold, step out and try something new.” I, for one, will do that: I will refuse to pay this tax and I suggest all the other homeowners in the 12 communities do the same.
With a little imagination you can see the grotesque insanity at work here. The government wants to keep raising the assessment because this means higher property taxes. The property owner all of a sudden doesn’t mind the increased assessments so much because it represents a guarantee of that much return on investment, even if the property isn’t “really” worth that much. But even if it isn’t “really” worth that much, a potential buyer has every reason to pay that much, because, after all, the property’s (ever increasing) resale value is guaranteed by insurance. It’s like someone invented a machine to create a dangerous real estate bubble.
Luckily the tax resisters and other critics killed the project before it got too carried away. Imagine the mayhem that would have ensued if this fund had been in place during the real estate bubble collapse that did take place not many years later.