Comment by starkparker | Hacker News Reader

Comment by starkparker | Hacker News Reader

Parent Full thread

That phrasing is wrong in the article. The firm is suing the farmers, as you intuited. https://www.agdaily.com/news/mysterious-company-sues-farmers...

> A mystery company that has been buying up farmland around Travis Air Force Base in California in recent years is now suing the farmers it bought the land from, accusing them of conspiring to inflate the value of their properties.

> Lots of questions and speculation are floating around about the buyer, Flannery Associates, which has invested close to $1 billion to buy more than 50,000 acres farmland in the Jepson Prairie and Montezuma Hills area of Solano County. According to numerous reports, the company is filing suit for at least $510 million against the farmers.

https://www.reuters.com/legal/litigation/some-california-lan...

> A lawsuit accusing a group of California landowners of conspiring to inflate the price of their land by hundreds of millions of dollars will "drastically expand" the reach of federal antitrust law if it is not dismissed, attorneys for the property holders told a U.S. judge.

> In a filing in Sacramento federal court, lawyers for the landowners in northern California on Friday urged U.S. District Judge Troy Nunley to reject "speculative" and "vague" allegations from agricultural land buyer Flannery Associates.

> Flannery, seeking more than $510 million in damages for alleged price-fixing, in May sued various family land trusts and estates over the sale of properties in the Jepson Prairie and Montezuma Hills area of Solano County between San Francisco and Sacramento.

What's the difference between price discovery and price fixing in this case?

If you hear on the grapevine that a bunch of billionaires are keenly interested in buying a certain thing that you own, and willing to pay over current market prices, well...

It's not like ALL of this land was simultaneously listed on a public market before the rich guys came up with their plan, right?

This problem is fundamentally a coordination problem, where land is conditionally valuable based on whether multiple lots can be purchased in tandem, and thus the value is based on getting everyone to sell at the same time. If the billionaires had known in advance that lots of existing landowners would pull this, they would have gone and bought land elsewhere, and the existing landowners would get nothing.

What's more, the billionaires are clearly offering a clearly profitable deal for everyone, specifically so that nobody has an excuse to refuse and cause the coordination problems mentioned. And because they bought at well above market price, they're stuck with dead weight if they don't go through with the affair.

In other words: the existing landowners are 1) demanding money well above the inherent value of the land, and 2) this mechanism/behavior of the existing landowners isn't useful to society/the economy as it makes it harder to do things that require lots of land. This is a textbook example of where government intervention is useful, if done competently and not corruptly.

So you are saying, when someone has enough money, others MUST sell to them, because maybe it is beneficial for the economy?

"What's more, the billionaires are clearly offering a clearly profitable deal for everyone, specifically so that nobody has an excuse to refuse "

When I like my land and I don't want to sell, than this is simply my right, no matter how much you think I have no excuse.

Building important infrastructure or mining critical ressources are rare exceptions for forced landsell, but not because someone wants to build a city for the rich on my land.

So sure, it is a tricky problem to buy from many owners, but getting the government to help you with your private project to force a contract on other people is kind of the definition of corruption.

> When I like my land and I don't want to sell, than this is simply my right, no matter how much you think I have no excuse.

I guess in this case they do want to sell it, they just know that the ‘billionaires’ having already bought a bunch of land in the area don’t really have a choice and will have to pay significantly more than the market value was previously.

It’s not exactly a case of some mega corporation trying to rip off some poor farmer and “steal” his land…

> build a city for the rich on my land.

Not that I’m saying that the government should get involved but the only reason you own that land is because want to make as much money from it as possible.

Pretty ironic that Laurene Powell Jobs is:

- a major investor in this project

- who got her money from Apple

- which makes a killing gouging you on cables with proprietary charging ports and dongles because their laptops/phones didn't have ports, and thus were forced to buy at a ridiculous price

- and is now mad she was forced to pay a ridiculous price for something

I’d say their price gouging for RAM/Storage is even more egregious since lightning was way better than micro-USB back in the day. But yeah (then again you seem to be blaming Apple both for adopting USB-C and not adopting it at the same time?)

If I own a sizeable stake in a public company, and I see that a billionaire is doing a hostile takeover, am I wrong to demand a higher price?

This is a risk of doing a massive land purchase like this. The seller is absolutely in the right to hold out as long as they want, and to maximize their profit.

If they won't sell, build around them.

You definitely have a point and more or less agree.

However this is one of the many reasons why there are housing shortages in many areas.

> However this is one of the many reasons why there are housing shortages in many areas.

Yes, wealth inequality and land development practices are reasons why housing is in such short supply.

But it is hard to proof, if someone just wants to make more money (which is legitimate), or if they genuinly want to keep the land. And government Intervention in those cases seem just recipe for corruption.

> the existing landowners are 1) demanding money well above the inherent value of the land, and

The inherent value of the land is what market is willing to pay for it in the moment. If you accept that land is to be traded freely, then the seller can set the price as they choose or refuse to sell. What you suggest is that the government sets the price and force sale for the grater good. Even if we collectively decided that this is how it should be, this instance is a really bad example, because they haven’t shared what they want to do there. Why do you automatically think that their plan will be for the public benefit? Eminent domain had a narrow scope, at least originally, for public use. In 2005 things changed [1]. Actually Kelo vs New London is a very good example. The paned out redevelopment never happened, Pfizer closed down the facility in New London. City never recovered its loses.

[1] https://ij.org/case/kelo/

Yeah, they could have had the threat of eminent domain to force a deal, but they should have gone that route instead.

Saying something like "sell to us or we'll force you to via eminent domain", buying the land, and THEN complaining about the price tag is ... brutal.

2) this mechanism/behavior of the existing landowners isn't useful to society/the economy as it makes it harder to do things that require lots of land

I am confused by this statement, they are farmers. Farms are beneficial to the economy and society.

That's the rich for you. I'll pay you over market price to get the thing I want, then hire lawyers to sue you to recover what I paid or ensure it mostly goes to the local lawyers you'll have to hire to defend yourself.

If moneybags comes, keep in mind: you don't have to sell.

Moneybags, keep in mind: the price I'm willing to sell at is not price fixing. I just may not want to sell to you.

> That's the rich for you

It’s one group of very rich people (possibly) trying to screw over other rich people, though.

> I just may not want to sell to you.

You almost definitely do though. You just want more money because you know that the buyer doesn’t really have a choice.

Wanting a sell at a certain price doesn’t mean you want to sell at a lower price. The desire to sell is often directly correlated to the price. If someone offered me double for our families house, I’d sell. If they offer me slightly over market value I’d just hang up the phone. For most people there is a price, it’s probably not what an average buyer sees as a reasonable price if it’s not on the market.

Deliberate wash sales to increase “market” price would be a trivial way to prove this. Otherwise it’s very speculative.

Or some type of record where the farmers got into a smoky room and said 'let's all agree to jack up the price!'

That said, wow, this seems like a blatantly horrible hardball tactic or probably a result of sour grapes for someone who was a fool with their money.

I hope this gets dismissed with extreme prejudice and flannery has to pay legal fees.

> sour grapes for someone who was a fool with their money

Maybe the unnamed investor was Softbank’s Masayoshi Son and after repeatedly being shafted by Neumann he said “No more!” and urged the lawsuit.

Reply on news.ycombinator.com