A not-so-friendly neighbor dispute

My family and I moved from Caracas, Venezuela, to Vienna, Virginia, in the summer of 2006. Not knowing anyone in the area, we were lucky to find that our new neighbors were very welcoming. In fact, one of our closest family friends today was the first neighbor to welcome us into our new home. Oh boy, those were peaceful days! The joy and tranquility that we felt was cut short in the fall of 2013 when we were the ones with the task of welcoming our new next-door neighbors to their home. At first, they seemed like they were going to be a great fit in the community. However, one day they decided that they wanted to surround their whole house with a tall black metal fence . Once the project was complete, my parents were outraged at the prospect of having to bear the pain of looking at the ugliest fence, that I have ever seen, every day for the rest of our time in this neighborhood. Now, I realize that our misfortunes, due to their decision to acquire the fence, can be described as a negative consumption externality.

In other words, the decision to surround their home with a fence means that the social marginal benefit of living in the neighborhood now took into account the reduction of our personal marginal benefit due to the marginal damage caused by looking at the fence every day (SMB= PMB-MD). This decrease in SMB means that we now endured a very undesired overconsumption of the fence, since Q_AE is less that Q*. To attempt to mitigate the damage, my parents endlessly tried to come to an agreement with the neighbors to only fence their backyard. Unwilling to budge, we were ultimately forced to call officials from Fairfax Country to clearly define the ambiguous property lines between the two homes and to inform our neighbors that they were actually only allowed to place a fence around the backyard, not around the whole house.

We no longer speak to our neighbors, but our use of a coasian-like solution worked. Once the property rights were clearly defined, the neighbors agreed to only fence their backyard.  Luckily, the house is up for sale and we may end up getting rid of it once and for all.