Thursday, August 30, 2012
Joseph Singer (Harvard) has posted The Rule of Reason in Property Law (UC Davis Law Review, 2013). The abstract:
rights cannot work if they are not clear, and scholars generally assume
that the best way to attain this goal is to define property rights by
relatively rigid rules. However, recent evidence suggests that the
intuitive view may be mistaken. The subprime crisis shows that clear
rules do not produce clear titles if owners do not follow those rules.
And during the twentieth century property law moved dramatically away
from rigid rules toward flexible standards. Standards turn out to be
crucial to property law, as well as increasingly important in property
Empirical evidence and historical experience alike demonstrate that rules cannot be applied without being supplemented by standards to determine the scope of those rules. Conversely, standards achieve predictability through core exemplars, precedent, and presumptions. Thus rules and standards are less distinct from each other than one might imagine. Standards perform crucial functions for property law. They perform systemic functions to shape the infrastructure and the outer contours of the property system by (1) setting minimum standards compatible with the norms of a free and democratic society, (2) protecting the justified expectations of consumers, and (3) responding to externalities and systemic effects of the exercise of property rights. Standards also determine the scope of property rights by (4) distinguishing cases; (5) resolving conflicting norms; (6) excusing mistakes; (7) escaping the "dead hand" of the past; and (8) deterring the "bad man" from abusing property rights.
A few pages of the article discuss land use regulation and the shift from relatively rigid early zoning to a world in which "[n]egotiated zoning is now the norm." The core of the argument is that:
On the surface, negotiated zoning is less predictable than Euclidean zoning. One either was or was not entitled to build a certain type of structure under the old rules. But of course the predictability of traditional zoning rules was always a bit of an illusion. One could always seek a rezoning of the property by the city council, for example, or sue to obtain a variance. Since zoning boards are political creatures, they tend to grant variances if no one objects.
. . .
In some ways the modern system is more predictable. All one has to do is to obtain agreement among relevant actors within a regulatory framework. Determining whether one can or cannot successfully complete a planned development requires a prediction about whether one can convince relevant audiences that it is a good idea. Experienced developers are likely to be more accurate in guessing whether this is the case than in predicting the outcome of a lawsuit determining whether a rezoning is or is not "inconsistent with the general plan."