Toxic Torts and Housing
I’ve written before about how governmental policy contributes to homelessness. An article in City Journal points out something that’s going to result in more homelessness in the future:
During the 1980s, when middle-income condo developments sprang up across the Sunbelt, some were jerry-built, and owners and condo associations—properly—sued the contractors. Trial lawyers quickly discovered that suits against multi-unit complexes could be gold mines, since there were so many potential litigants in each case. By the mid-nineties, trial lawyers were actively soliciting condo associations across the country, offering to represent them in suits against builders on flimsy, or even nonexistent, evidence of faulty construction. Judges again made things worse, inventing a notion called “stacked liability,” which meant that not merely the builder’s current insurer but every company that had ever insured him was liable for claims concerning the project.
As a result
Predictably, insurers are fleeing the market or are ratcheting up their rates so high that builders can no longer afford to construct multi-unit housing. For example, one of California’s biggest builders, Barnett America, no longer builds the affordable, multi-unit housing that it specialized in for 20 years. Now it erects pricey single-family homes instead.
The article is about toxic torts in general, not the housing industry, but it’s all interesting.
Posted by tino at 18:36 23.01.03