February 12, 2010
More Info on the Juergensmeyer Symposium
From the student committee at GSU:
Topics to be discussed include: Infrastructure Planning: Challenges and Visions – Focusing on current infrastructure needs, planning trends, and potential solutions to problems many communities are now facing. Future Directions – Dealing with the impact of environmental concerns on the future of planning and how planning professionals can incorporate sustainable technology and smart growth principles into planning practices. Infrastructure and Property Rights – Discussing the legal interests and rights of landowners, zoning officials, and government organizations. Transportation Infrastructure and Control of Sprawl – Addressing transportation issues facing many large metropolitan regions and offering perspectives on controlling sprawl through transportation infrastructure. Social Infrastructure – Focusing on the importance of providing necessary affordable housing for low-income families and addressing how environmental concerns impact affordable housing. Financing Infrastructure – Comparing fee generating methods to cover the rising costs of infrastructure, including a cross-national perspective on the use of developer agreements and exactions. Water Infrastructure – Looking into wastewater management through new directions and changes to the law and policies.
Georgia and Florida attorneys attending the symposium are eligible to receive 9 hours of CLE credit. Planners will receive 9 hours of AICP for CM credit, including 1.5 hours of law credit. Engineers attending will also be eligible for individual application through the Georgia Board of Professional Engineers and Land Surveyors. If you have any further questions please contact us at Infrastructure2020@gsu.edu or visit us at http://law.gsu.edu/metrogrowth/index/symposium
Jamie Baker Roskie
February 11, 2010
Snowmageddon in DC
Everyone's talking about "Snowmageddon," the massive back-to-back snowstorms that have shut down DC. Now, we did warn you here on the Land Use Prof Blog about what Punxsutawney Phil said earlier this month. I understand that what counts as "six more weeks of winter" is relative, and where I grew up in upstate NY that didn't sound bad at all, whereas in DC, Virginia, and other middle-latitude states it might mean something different.
But for those middle-latitude states it is always a tough call, and a potentially significant issue for local budgets and politics, just how much to prepare for snow removal. I posted about this in December during a rare Texas snowstorm, and compared Texas cities' imperatives to Chicago and Albany. In a nutshell, it makes sense to pay for snow removal in Albany but not in Houston. It's the places in the middle--Virginia, Tennessee, Arkansas, and points west--that have to make more difficult decisions about how many plows to purchase as capital expenditures; how much road salt and sand to stock in the operating budget; and how many plow drivers and other personnel to employ in the HR lines. It seems to me that, anecdotally, DC tends to get socked with a major blizzard every couple years, but that may or may not be worth the investment it would take to have a government snow-removal function on the scale of a more northerly metropolis. Tougher call in the middle states.
Hilber & Robert-Nicoud on The Origins of Land Use Regulations
Christian A.L. Hilber (London School of Economics--Geography & Environment) and Frederic Robert-Nicoud have posted On the Origins of Land Use Regulations: Theory and Evidence from US Metro Areas. The abstract:
We model residential land use constraints as the outcome of a political economy game between owners of developed and owners of undeveloped land. Land use constraints benefit the former group (via increasing property prices) but hurt the latter (via increasing development costs). More desirable locations are more developed and, as a consequence of political economy forces, more regulated. Using an IV approach that directly follows from our model we find strong and robust support for our predictions. The data provide weak or no support for alternative hypotheses whereby regulations reflect the wishes of the majority of households or efficiency motives.
Hodges and Himebaugh on Land Use Exactions and the Precautionary Principle in Washington State
Brian T. Hodges and Daniel A. Himebaugh (Pacific Legal Foundation) have posted Have Washington Courts Lost Essential Nexus to the Precautionary Principle? Citizens' Alliance for Property Rights v. Sims. The abstract:
This Article examines how Washington State courts have allowed the precautionary principle to encroach upon the essential nexus test in the context of land use exactions. The essential nexus test requires government to establish a cause-and-effect connection between development and an identified public problem before placing conditions on development. The precautionary principle, however, endorses regulation of land use in the absence of causation. Although U.S. Supreme Court precedent requires government to prove causal connections, recent Washington case law shows that this test of causation is morphing into a less scrutinizing means-end test of rationality. This shift was evident in the recent case of Citizens' Alliance for Property Rights v. Sims. In that case, Washington courts found the government's generalized scientific assessments to satisfy the essential nexus test, even though the science did not establish a causal connection between clearing of rural properties and environmental harm due to stormwater runoff. This Article urges courts to take a more vigorous interest in protecting private property rights by making causation, not precaution, the driving principle of environmental regulation.
Has Regulation Saved Some Cities from Foreclosure Crisis?
From today's NYT Opinionator Blog, a piece on what's happend in California - the unregulated sprawl in the Central Valley vs. the strictly regulated urban core:
It hasn’t happened. Just the opposite. The developers’ favorite role models, the laissez faire free-for-alls — Las Vegas, the Phoenix metro area, South Florida, this valley — are the most troubled, the suburban slums.
Would stricter land use regulation kept us out of this mess?
Jamie Baker Roskie
Yet More Immergluck: The Accumulation of Lender-Owned Homes During the Mortgage Crisis
Dan Immergluck (Georgia Tech--Planning) strikes again, this time with The Accumulation of Lender-Owned Homes During the U.S. Mortgage Crisis: Examining Metropolitan REO Inventories, forthcoming in Housing Policy Debate. The abstract:
A key concern among policymakers and community developers in recent years has been the extent to which lender-owned homes, often called real estate owned or “REO” properties accumulate in different local housing markets during the mortgage crisis. This paper describes the accumulation of REO properties in 356 metropolitan statistical areas (MSAs) from August 2006 to August 2008. It examines differences in both changes and static levels of REO activity across MSAs and compares changes in REO levels to changes in home values over the same period. Special attention is paid to twelve large MSAs with substantial levels of REO as of August 2008. A model of REO volume at the metropolitan level is estimated which includes differences in state foreclosure legal processes and timing among the independent variables. Finally, cluster analysis is used to identify a simple typology of MSAs based on REO levels and home price changes.
February 10, 2010
Charleston's "historic front door"?
More news today about the South Carolina Ports Authority proposal to rework Charleston's existing cruise terminal to allow increased cruise traffic--nearly double that of current use levels. Click here for the most recent update. From the article: "Jaque Robertson, whose New York-based urban design firm was hired by the State Ports Authority as a consultant to evaluate the property, called the redevelopment proposal "one of the half-dozen most important urban projects in the U.S."
Predictably, those in favor of the plan tout it's economic benefits (to the tune of $37M, plus $3.5M in estimated tax revenues and 400 jobs), but apparently without any accounting for costs, including the externalities that will arise from increased ocean dumping 3-4 miles offshore from Charleston's harbor, beaches, rivers, and marshes. On the other side, opponents argue against the proposal, citing problems with increased traffic and pollution concerns. Residents and business owners adjacent to the proposed new cruise terminal have mixed opinions, with no clear concensus in sight. The preservation community is divided, too, with one group supporting the plan, while another urges more careful study. My historic preservation law class will be taking a closer look at these issues during the course of the semester. We'll report what we discover by way of national, state, and local preservation law that might affect implementation of the proposed plan.
Will Cook, Charleston School of Law
Baby, It's Cold in Here
From one of my favorite periodicals, The New York Times, an article on people who like it cold in their houses. How cold? 30 to 40 degrees, for some. They do it out of financial necessity or aesthetic predisposition, or because it's better for the environment.
Jamie Baker Roskie
Zoning Out Fast Food
Notre Dame law student Allyson C. Spacht has published her note "The Zoning Diet: Using Restrictive Zoning to Shrink American Waistlines" at 85 Notre Dame L. Rev. 391.
An excerpt (cites ommitted):
The goal of the ICO is to allow city planners to analyze the quantity of fast food restaurants in these communities and to develop solutions to combat the extreme imbalance that has resulted in these areas from decades of spot zoning and neglect in community planning and development. With minimal land remaining for development in these areas, the ICO allows city planners to determine what types of businesses best suit a community with the highest incidence of diabetes in the county and an obesity rate that is nine percent above the county average. The ICO enables council members to actively attract healthier options to these communities, including grocery stores and sit-down restaurants, by preserving the limited existing land for such uses. Councilwoman Jan C. Perry, author of the ICO, and fellow supporters of the ordinance argue that "making healthy decisions about food is difficult when people have small incomes, the grocery store is five miles away and a $ 1 cheeseburger is right around the corner." The ICO serves as just one of the many planning tools the Los Angeles City Council hopes to employ "'to attract sit-down restaurants, full service grocery stores, and healthy food alternatives... in an aggressive manner.'"
I've been aware of the lack of access to quality food in lower income urban areas, but this is the first I've heard of an attempt to zone fast food out of inner city areas and bring in grocery stores and better dining alternatives.
Jamie Baker Roskie
February 9, 2010
Noia on Foreclosures, MAHP, and Bankruptcy
Kristen Noia (Hastings) has posted Giving Foreclosures the One-Two Punch: Why the Making Home Affordable Program Can Knock Down Foreclosures But Needs the Backup of Bankruptcy Cramdown Legislation to Broaden its Scope, The abstract:
Profound contractions in the housing market and the economy as a whole have had distressing effects on homeowners. Many prudent borrowers who have stayed current on their mortgage payments have watched their property values plummet until they no longer have sufficient equity to refinance to lower interest rates. Additionally, due to massive layoffs and a lean job market, millions of these recently unemployed borrowers must now bend over backwards to make each monthly payment. Currently, nearly 2,900 families are losing their homes each day, with many more struggling to meet their monthly mortgage obligations. Many of these foreclosures are not preventable. For example, investors may no longer wish to retain a property whose value has depreciated significantly, and some “borrowers - perhaps because they were put into an inappropriate loan or because personal circumstances have changed - cannot realistically sustain homeownership.” However, when a borrower desires to stay in her home and the foreclosure is preventable, the high legal and administrative costs and the destabilizing effects on communities and property values militate towards avoiding foreclosure.
Foreclosure prevention programs to date, largely in the form of loan modification efforts, have failed to effectuate affordable mortgages, and therefore, have done little more than delay foreclosures. In fact, recent reports have shown that 68% of loan modifications have involved capitalizing unpaid interest and fees into a larger mortgage debt, and 45% have actually increased monthly payments. Lenders, who have a fiduciary duty to protect investors’ interests, have been unwilling and unable to make affordable modifications. The lack of any incentive for lenders to make meaningful and affordable changes to a loan’s repayment terms caused the historic failure of modification programs, as evidenced by re-default rates approaching 60%.
Unlike previous efforts to encourage voluntary modification, the Making Home Affordable program’s (“MHA”) refinancing and modification plans could be the vehicle to achieve more permanent foreclosure prevention because of its focus on actual affordability and tripartite incentives for lenders, investors and borrowers. For example, MHA will reduce mortgage payments to 31% of qualified homeowners’ monthly gross income, with the government subsidizing interest rate deductions made by lenders to achieve this monthly payment affordability goal. Simultaneously, MHA provides lenders with payments of $1,000 per loan modified and pay-for-success bonuses if borrowers stay current. These provisions give lenders previously nonexistent financial incentives structure payments that borrowers can actually afford, and complement similar inducements for mortgage investors to permit restructuring qualifying loans and borrowers to stay current on their post-modification payments. However, while MHA tackles the borrower affordability and lender incentive shortcomings of prior foreclosure prevention programs, it fails to effectively address the main problem arising from the recent mortgage crisis: Severely underwater borrowers who are foreclosing because they purchased homes at an enormously inflated price and now have outstanding mortgage balances two or three times the actual value of their homes. Reformed bankruptcy laws permitting judges to modify mortgage terms if lenders do not make sustainable modifications are necessary to bolster MHA’s affordability - and incentive-based foreclosure mitigation program. While bankruptcy should never be the first option for a distressed borrower, the proposed cramdown legislation offers “the only remedy available that will provide the stick to go with the carrots that [Congress has] offered lenders to modify mortgages voluntarily.”
This paper considers the current mortgage crisis, specifically looking at the Making Home Affordable program and proposed Chapter 13 bankruptcy mortgage cramdown legislation. Part I analyzes the policy rationale for and against government intervention in the residential foreclosure market. Part II establishes the historical context of ineffective voluntary mortgage modifications, looking at the former Hope for Homeowners plan as an example of recent failure. Part III explores the Making Home Affordable program, evaluating the potential efficacy of preventing foreclosures and inducing voluntary modifications based on the two primary impediments to modification plans: Affordable new terms for borrowers and incentives provided to obtain widespread lender participation. Looking at incentives, MHA induces lender participation through a combination of carrots and sticks, including monetary per-modification payments and judicial modifications of mortgages (i.e. “cramdowns” - decreasing principal, reducing interest rates, and extending repayment terms) in bankruptcy where borrowers have no viable options left. Part IV discusses the necessity of bankruptcy cramdown legislation, which would cast a broader curative net and offer a remedy to the many underwater borrowers currently outside the scope of MHA’s modification program. This cramdown legislation would provide further incentive for lenders to make a good faith effort at modification because it increases bargaining power for any borrower in modification negotiations, given that all parties - lender, borrower, and investor - will know that bankruptcy courts have the power to make equitable modifications.
More Immergluck: Neighborhoods in Wake of the Debacle
Just yesterday I posted an article from Vicki Been's Land Use/Real Estate SSRN digest by Dan Immergluck (Georgia Tech--Planning) about the subprime mortgage crisis. Today we have another timely article: Neighborhoods in the Wake of the Debacle: Intrametropolitan Patterns of Foreclosed Properties. The abstract:
The problem of growing numbers of foreclosed, vacant homes in U.S. neighborhoods during the mortgage crisis rose on the national policy agenda during 2007 and 2008. This paper describes the intrametropolitan accumulation of foreclosed homes (often referred to as “REO” properties) at the depths of the crisis in late 2008. After describing city and suburban patterns of REO across different types of metropolitan areas, a model of REO accumulation from late 2006 to late 2008 at the zip code level is estimated. In addition to declining housing values and increasing unemployment, a variety of other factors are found to be associated with increasing REO, especially the origination of high-cost mortgages during the subprime boom. Other factors include poverty rate, the median age of the housing stock, central city location, and state foreclosure processes. After controlling for these other factors, the proportions of a zip code’s population that are black or Hispanic are found to be negatively associated with REO growth, although only the relationship with proportion Hispanic is found to be statistically significant.
Tekle on Restrictive Covenants and Sex Offender Legislation
Asmara M. Tekle (Texas Southern-Thurgood Marshall) has posted Safe: Restrictive Covenants and the Next Wave of Sex Offender Legislation, forthcoming in the SMU Law Review. The abstract:
This Article examines the emerging phenomenon and implications of sex offender covenants, the latest wave of sex offender legislation, under common law property rules such as touch and concern and the doctrine prohibiting restraints against alienation. The paper theorizes that courts use common law property rules to strike down personal “who” covenants, such as those based on race, age, disability, and often permanently debilitating sex offender status, that run afoul of public policy norms – most particularly, the wide availability of safe and decent housing for all.
The Article analogizes blanket sex offender covenants to their racially restrictive progenitors, arguing that both types of covenants are based on unsubstantiated fears that one population would sexually terrorize another. The modern-day fear is that convicted sex offenders will sexually prey upon children, whereas the underlying fear in the era of racial segregation was that black men, this country’s original sexual predators, would sexually prey upon infantilized white women. Finally, this Article looks to the sordid history of racial segregation for lessons and solutions to the modern-day problem of convicted sex offenders.
Immergluck on the Mortgage Crisis and Neighborhood Wreckage
Dan Immergluck (Georgia Tech--School of City and Regional Planning) has posted From Global Buck to Local Muck: Capital Markets, Public Policy and Neighborhood Wreckage in the U.S. The abstract:
The U.S. subprime crisis was the result of a continual movement of U.S. mortgage markets towards vertical disintegration, structured finance, and deregulation since the early 1980s. The result was an increasingly direct connection between global capital markets and U.S. homeowners and neighborhoods, with little mediation, oversight or restraint, especially by the public sector. There was no concern with the consequences that high-risk lending might have on local communities and their residents; the focus was on promoting liquidity at all costs, to increase the transactions (and the associated profits) and continue to promote financialization of the economy.
The impacts of the subprime crisis, both direct and indirect, are far too vast and widespread to be addressed in a single paper. However, I attempt here to describe one critical aspect of this impact - the piling up of vacant, foreclosed properties in many U.S. neighborhoods, especially those in older central cities as well as those in newer, outlying suburban and exurban communities in some parts of the country. I also discuss the primary federal response to the problem of vacant, foreclosed properties, the Neighborhood Stabilization Program, which was adopted initially in the summer of 2008, with supplemental funding in 2009.
UPDATE: I originally posted that Prof. Immergluck was at Georgia State, not Georgia Tech. Since I started my academic career in Georgia, I should know the difference! I remain an admirer of all of those great institutions.
February 8, 2010
While the general unemployment number recently dipped below 10%, the jobless percentage of construction workers has nearly reached 25%--another indication that land use trends don't seem poised to grow positive anytime soon:
The U.S. construction industry’s unemployment rate hit 24.7% in January as another 75,000 American construction workers lost their jobs.
The Associated General Contractors of America noted that excluding construction job losses, American employment rose in January for the second time in three months. Ken Simonson, the association’s chief economist: “Unlike the rest of the economy, the construction industry continues to shed jobs at virtually the same rate in January as it has for the past twelve months. The stimulus appears to be the only bright spot for an industry suffering from depression-era unemployment levels.”
--Chad Emerson, Faulkner U.
28th Annual Public Interest Environmental Law Conference
Empowering the Next Generation of Wildlife Warriors
Join Robert and Bindi Irwin from 3:30-4:30 pm Thursday, February 25 for an interactive question-and-answer session geared specifically toward young conservationists. Attendance is free, but seating is limited for this youth-oriented presentation.
Don't miss the pre-PIELC lecture by environmental attorney Denis Hayes, national coordinator for the first Earth Day, former director of the federal National Renewable Energy Laboratory, and current president of the Bullitt Foundation. 7:30 pm, Wednesday, February 24, in Columbia 150.
Cool stuff in the land of the Ducks!
Jamie Baker Roskie
February 7, 2010
Epstein on Bybee's Takings Decision
Richard Epstien (Chicago; Stanford/Hoover) has posted Takings Law Made Hard, Regulation, Winter 2009-2010. The abstract:
The novel opinion of Ninth Circuit Judge Jay Bybee in Guggenheim v. City of Goleta could threaten the tortured jurisprudence that has protected regulatory takings and other property rights infringements from Fifth Amendment challenges. This article describes that jurisprudence, explains the economic and legal thinking underlying Judge Bybee’s opinion, and identifies a number of technical deficiencies with his opinion. The Supreme Court will likely take up an appeal of Judge Bybee’s opinion; hopefully it will use that opportunity to correct the Court’s many errors that have eroded property rights.
Sounds fascinating! Stay tuned.
Super Land Use Bowl
I'm glad the Saints won, from a land use perspective, because New Orleans is a great city, an urban historical gem, and despite Brad Pitt's best efforts, the city is still struggling to come back from Katrina's damage to its infrastructure and its neighborhoods. Or maybe it's because of Houston's Gulf Coast proximity and shared hurricane experiences, or my sympathy for the French Quarter gift shops' position in the intellectual property dispute over Who Dat?.
It also occurred to me during the game that football is itself sort of a land use issue. The game seems to be at its essence a dispute over land. Each team tries to possess the other's land while excluding the opponents from its own. While the two parties dispute their rights over the land with respect to each other, the officials enforce a code of regulations about how both teams may use their territory. Then outside the field, you have all of the actual real-world issues of zoning, eminent domain, transit, TIFs, and other policy issues that revolve around the stadiums and the logistics of the games. Perhaps there's an article topic there for someone? Anyway, congratulations to New Orleans.