Tuesday, October 11, 2011

Property Theory and Land Use, Part I

Why do landowners get to decide what to do with their land? If the answer to this question is, as economists would have it, that those who invest their resources in the purchase, development, and use of land are generally in the best position to maximize the value of land, then what happens if this turns out not to be true? What to make of economically irrational landowners, or unproductive or wasteful landowners? Are they exceptions to the rule? Can they be managed with rare exercises of the eminent domain power? Or does their existence supply reason to doubt altogether the efficacy of owner sovereignty? And what about considerations for which economists cannot account, values that are incommensurable to each other, such as charity and the other virtues? Can one run a regression analysis to measure the effectiveness of private property in promoting generosity?

These are some of the questions that Progressive property theorists have prompted in recent years, raising formidable challenges to private property generally, and land owner sovereignty in particular. Consider perhaps the most prominent and influential of these challenges, the Statement of Progressive Property authored by Gregory Alexander, Eduardo M. Peňalver, Joseph William Singer, and Laura Underkuffler. They doubt that private property ownership accrues to the common good, on balance. And they challenge the orthodox view of property as a core right to exclude, with government regulation operating only at the margins. They claim instead that the core of property is complex, and includes management by government.

Of course, one could just as easily ask the questions the other way around. Why are governments empowered to regulate land use? If the answer to this question is, as land planning advocates would have it, that controls on land use are necessary to internalize negative externalities, and to reduce conflict and waste, then why do we allow ex ante controls? The common law had mechanisms—doctrines of nuisance and waste, the power of eminent domain—to alleviate or eradicate harmful uses and non-uses of land. Ex ante planning rests on the assumption that government planners are capable of discerning the best uses of land and avoiding the worst, an assumption upon which scholars have cast considerable doubt (including on this very page, no less). And what about considerations for which government planners cannot account, such as (lack of) market demand, that irritating reality? The development authorities of New London, Connecticut had planned a real shining city by the sea. The dreams and plans of redevelopment authorities are often strikingly attractive. They could transform the world if only they never had to be implemented.

It is fine to acknowledge the value of incommensurable ends, to insist that the institution of property account for virtues and other values that are difficult to quantify. But are Progressive theorists really advancing these ends in a way that owner sovereignty does not? Henry Smith thinks not. He insists that both defenders and critics of private property rights are in favor of virtue and human flourishing. They disagree merely over the means that best serve the agreed-upon ends. The critics of private property rights are simply impatient with the “mysterious way” that property promotes human flourishing.

This is (very) roughly the current state of what is arguably the most interesting debate in property theory today. Why should land use lawyers care about this debate? Today’s legal theory is tomorrow’s legal doctrine. Economic substantive due process was just a theory before the Court decided Lochner. Originalism was just a theory before a young Justice named Scalia began questioning the judicial-supremacy orthodoxy espoused by Justice Brennan. John Locke had a theory. If you’re curious what came of it, read the Declaration and Constitution in one hand with a copy of the Second Treatise in the other. Holmes had a theory. He failed to persuade a majority of his colleagues on the Lochner Court, but his theory ultimately prevailed in West Coast Hotel v. Parrish.

Over the course of the next couple of weeks, I hope to explore some of the implications of this debate among property theorists. In particular, I’d like to think with our readers about how these principles play out in land use law. Are there principled reasons why the age of landowner sovereignty should come to and end? Do policy makers have principled reason to doubt the efficacy of government planning of land use? Or can landowner sovereignty and government planning co-exist on rational, coherent grounds?

Adam MacLeod


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I'm so glad that you're starting this discussion on our blog. I think the debate about market failure in land use allocation becomes much more interesting when advocates and skeptics of public intervention both agree on the importance of balancing incommensurable, fundamental human goods. I look forward to your posts.

Jim K.

Posted by: Jim Kelly | Oct 11, 2011 11:36:43 AM

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