We’ve all seen them, and there seem to be a large number of them around Corvallis particularly. I’m talking about houses that are painted ridiculous colors. Not only do these neon green or blue trimmed houses cause an eyesore for everyone unfortunate enough to drive by them but they also cause a negative externality on the houses and housing market in the neighborhood by driving market values down. Since there is (usually) no home owners association in these neighborhoods, the owners that go crazy with their choices of housing color don’t bear any of the costs of their decision, and as such these costs are passed on to society. Essentially these off colored houses can be viewed as an unregulated pollution on the housing market, although the home owners have to pay to paint the houses, the neighbors and the neighborhoods in the surrounding area also have to pay for the issues caused. Some examples of the issues caused can be reduced neighborhood aesthetic appeal, and a lower return on investment on their current home.
