Wednesday, October 30, 2013
So it's been quite awhile since my last post, but I felt compelled to share the end of the story about putting a Wal-Mart in downtown Athens, Georgia. If you're a longtime reader of the blog you may remember that an Atlanta based developer proposed a mixed-use development, anchored by a Wal-Mart, in the center of Athens. (See my previous post here.) Although Wal-Mart never expressed official interest in the project, many local residents were highly opposed to the idea.
Yesterday the local paper featured a story saying that the developer has now abandoned the project entirely, due to market conditions. The development featured student apartments as its residential component, and downtown Athens is already overbuilt in that category. However, the site, while topographically challenging, is prime real estate. I'm sure as market conditions improve something will eventually be built there.
Jamie Baker Roskie
Tuesday, August 13, 2013
It's time for the monthly "Professors' Corner" teleconference sponsored by the ABA Real Property Section. Here's this month's info! --Matt Festa
Professors' Corner: Wednesday, August 14, 2013
12:30pm Eastern/11:30am Central/9:30am Pacific
Call-in number: 866-646-6488
Professors’ Corner is a monthly FREE teleconference sponsored by the ABA Real Property, Trust and Estate Law Section's Legal Education and Uniform Laws Group. Each month’s call features a panel of law professors who discuss recent cases or issues of interest to real estate practitioners and scholars. Members of the AALS Property section are invited and encouraged to join in this call.
Our program on Wednesday, August 14 is “Real Estate Issues in the Bankruptcy Courts.” Our panel will discuss the latest on several important real estate issues in bankruptcy, including the “absolute priority” rule in individual Chapter 11 cases; the “strip-off” of underwater liens in Chapters 11 and 13; and the artificial impairment and artificial classification in Chapter 11 cases.
Our panelists for the program include three leading bankruptcy scholars:
Professor Ralph Brubaker, University of Illinois College of Law. Prof. Brubaker has taught at Illinois since 2004 after many years at Emory University Law School. He has served as Interim Dean and Associate Dean for Academic Affairs at Illinois and most recently as the Guy Raymond Jones Faculty Scholar. He will discuss a recent Fifth Circuit decision, In re Village at Camp Bowie I, L.P., and the extent to which a Chapter 11 debtor can “artificially” impair claims to facilitate cramdown of a reorganization plan and the status of the “artificial classification” doctrine.
Professor Bruce Markell, Florida State University. Prof. Markell returns to teaching at FSU in 2013 as the Jeffrey A. Stoops Professor, after many years of service as a United States Bankruptcy Judge for the District of Nevada and as a member of the Bankruptcy Appellate Panel for the Ninth Circuit. Prior to his service as bankrutpcy judge, Prof. Markell had a distinguished career as a law teacher at both Indiana University and UNLV. He will address recent case developments involving the “absolute priority rule,” including whether the rule applies in individual Chapter 11 cases and Judge Easterbrook’s recent “new value” decision in In re Castleton Plaza.
Professor Robert Lawless, University of Illinois. Prof. Lawless has taught at Illinois since 2006, and previously taught at both Missouri and UNLV. He currently serves as the Associate Dean for Research and the Co-Director of the Illinois Program on Law, Behavior, and Social Science. Prof. Lawless will address recent case developments regarding the ability of Chapter 11 and 13 debtors to “strip-off” underwater mortgage liens.
Please join us on Wednesday for this program!
Wednesday, April 10, 2013
Nestor Davidson (Fordham) has posted New Formalism in the Aftermath of the Housing Crisis, Boston University Law Review, Vol. 93, No. 389, 2013. The abstract:
The housing crisis has left in its wake an ongoing legal crisis. After housing markets began to collapse across the country in 2007, foreclosures and housing-related bankruptcies surged significantly and have barely begun to abate more than six years later. As the legal system has confronted this aftermath, courts have increasingly accepted claims by borrowers that lenders and other entities involved in securitizing mortgages failed to follow requirements related to perfecting and transferring their security interests. These cases – which focus variously on issues such as standing, real party in interest, chains of assignment, the negotiability of mortgage notes, and the like – signal renewed formality in nearly every aspect of the resolution of mortgage distress. This new formalism in the aftermath of the housing crisis represents something of an ironic turn in the jurisprudence. From the earliest history of the mortgage, lenders have had a tendency to invoke the clear, sharp edges of law, while borrowers in distress have often resorted to equity for forbearance. The post-crisis caselaw thus upends the historical valence of lender-side formalism and borrower-side flexibility.
Building on this insight, this Article makes a normative and a theoretical claim. Normatively, while scholars have largely embraced the new formalism for the accountability it augurs, this consensus ignores the trend’s potential negative consequences. Lenders have greater resources than consumers to manage the technical aspects of mortgage distress litigation over the long run, and focusing on formal requirements may distract from responding to deeper substantive and structural questions that still remain largely unaddressed more than a half decade into the crisis. Equally telling, from a theoretical perspective, the new formalism sheds light on the perennial tension between law’s supposed certainty and equity’s flexibility. The emerging jurisprudence underscores the contingency of property and thus reinforces – again, ironically – pluralist conceptions of property even in the crucible of hard-edged formalism.
Monday, April 8, 2013
From Wilson Freyermuth (Missouri) via the property listserv comes the announcement for this Wednesday's Professors' Corner--the monthly free teleconference sponsored by the ABA's Section on Real Property, Trusts, & Estates. This one looks really interesting. See below for the info and dial-in instructions.
Professors' Corner: Legal Education and Uniform Laws Group Call
April 10, 2013, 12:30pm Eastern/11:30am Central/9:30am Pacific
Call-in number: 866-646-6488
The April 2013 program is entitled "Real Estate-Related Uniform Laws in Progress." This program will discuss the status of the two major uniform law projects related to real estate that are currently underway within the Uniform Law Commission (which we all used to know as NCCUSL).
The first project is a comprehensive revision of the Uniform Residential Landlord and Tenant Act. The URLTA was originally promulgated nearly 40 years ago and has been adopted, either in part or in whole, in approximately 20 states. During this month’s program, Professors Sheldon Kurtz (University of Iowa) and Alice Noble-Allgire (Southern Illinois University), who are the co-Reporters for this Act, will discuss the current status of this project and some of the key issues being addressed in this revision. These revisions will receive their "first reading" at this summer's annual meeting of the Uniform Law Commission in July 2013. In case you’re curious, here is a copy of the current draft of the Act: http://law.missouri.edu/freyermuth/JEBURPA/2013apr2_RURLTA_MtgDraft.pdf.
The second pending real-estate related uniform law project is a new project to produce a uniform act governing residential mortgage foreclosure processes. This project began earlier this year after extended study by the Uniform Law Commission, as well as a stakeholder meeting at which input was taken from both industry and consumer groups, as well as federal and state regulators. The Act proposes to address residential mortgage foreclosure processes and mortgagor protections in both judicial foreclosure and nonjudicial foreclosure. During the program, Professors James Smith (University of Georgia) and Alan White (City University of New York), who are the co-Reporters for this project, will discuss the status of this project and the key issues being addressed in this project. Here is a copy of the current draft of this Act, which will likewise receive its "first reading" at this summer's Uniform Law Commission meeting: http://www.uniformlaws.org/shared/docs/Residential%20Real%20Estate%20Mortgage%20Foreclosure%20Process%20and%20Protections/2012mar25_RREMFPP_MtgDraft_Clean.pdf.
Please join us on Wednesday for this month’s call!
Wednesday, February 20, 2013
Elizabeth Plummer (Texas Christian) has posted The Effects of Property Tax Protests on the Assessment Uniformity of Residential Properties, forthcoming in Real Estate Economics. The abstract:
This study examines whether the appeals process improves assessment uniformity for residential properties. The sample includes all single family residential properties in Harris County, Texas, for 2006-2008. I use a hedonic pricing model and Heckman’s two stage approach to explain the assessed values of all properties before and after the appeals adjustments. Full sample results suggest that the appeals process increased assessment uniformity and that the value adjustments were appropriate in amount. I also present results across properties of different values (low, medium, high). The first stage probit model provides evidence on the factors that affect the likelihood that an owner will protest.
I'm personally excited to see this study of real estate value effects in my own backyard, here in The Unzoned City.
Thursday, November 15, 2012
Andra C. Ghent (Arizona State--Finance) has posted The Historical Origins of America's Mortgage Laws. This paper would be a really good resource for students, teachers, or practitioners who are interested in a concise but explanatory introduction to the development of state mortgage laws, including mortgage theory, foreclosure, and other important topics. The paper is a report for the Research Institute for Housing America. The abstract:
This paper examines the different legal frameworks for mortgage markets in different states, focusing on how and when they came into existence, including the British influence on laws in some of the older states, with a particular emphasis on foreclosures, including judicial vs. non-judicial regimes, redemption rights and deficiency judgments. The paper concludes that mortgage laws in America are a patchwork driven by path dependence, rather than a coordinated effort or a reaction to some economic event or condition.
Tuesday, November 13, 2012
Tanya Marsh has the details for this month's teleconference at Property Prof. As many of you know, the ABA Section on Real Property, Trust, & Estate Law has been hosting free teleconferences featuring law professors' discussions of recent cases and hot topics in the field. This month's "Professors' Corner" will focus on recent developments in title insurance and title services. Here is the info:
Wednesday, November 14, 2012
12:30 p.m. Eastern time (11:30 a.m. Central, 9:30 a..m. Pacific)
Call-in number: 866-646-6488
Tanya will moderate the discussion featuring Professors Joyce Palomar (Oklahoma), Barlow Burke (American), and Eileen Roberts (William Mitchell). Check it out if you are able. Some of us Land Users have had the opportunity to participate in past months' calls, and it's a great way to stay up to date.
Wednesday, October 24, 2012
Darren Prum (Florida State - Business) has posted The Next Green Issue: Considering Property Insurance for the Green Building. The abstract:
As government policies across the country try to encourage more environmentally friendly buildings, the next green issue facing the owners of the completed structure is obtaining the proper insurance coverage to protect their investment. A typical property insurance policy covers the costs to reconstruct or replace property damaged as the result of a casualty, so the Insurance Service Organization and other carriers offer specific green building endorsements in an effort to augment the underlying property policy. However, these buildings maintain unique characteristics, which becomes relevant to the owner and policy underwriter as well as other stakeholders like the holder of a mortgage and major tenants. Accordingly, this article seeks to address the issues associated with a property insurance policy and the applicable endorsements that provide coverage for a green building.
Friday, October 19, 2012
Marcia Johnson (Texas Southern) has posted Will the Current Economic Crisis Fuel a Return to Racial Policies that Deny Homeownership Opportunity and Wealth to African Americans?, published in The Modern American, Volume 6, Issue 1, Spring 2010. From the introduction:
Perhaps the greatest threat to the continued realization of the American dream is the latest economic crisis rooted in the sub-prime mortgage collapse.12 Some blame the CRA of 1977 for creating a market that they claim provided housing loans to noncreditworthy borrowers – particularly African American families – in the low and moderate income range.13 However, this charge is without direct factual support as the post-CRA period saw a decline in homeownership for African Americans but a mild increase for White homeowners.14 Illegal and fraudulent practices in property appraisals and income reporting directed program benefi ts away from those the program was meant to aid. . . .
This paper is written to examine the potential effect of the market collapse on our nation’s homeownership policies. Part I reviews America’s historical housing and homeownership policies. Part II considers the expansion of homeownership opportunities to historically non-participating communities, particularly the African American community. Part III reviews the culprits of the economic crash of 2008 and explains why sub-prime borrowers often get blamed. Part IV examines solutions to maintain America’s pro-homeownership policy, and Part V concludes that America’s homeownership policy should continue to be vigorously pursued with a goal of including African Americans who have long been excluded by government policies and sanctions from building wealth and thereby stabilizing their communities.
Tuesday, October 9, 2012
This month's installment of the ABA Section on Real Property's "Professor's Corner"--a free monthly teleconference featuring scholars' takes on important new property cases and issues--will feature a really hot topic, the proposal for municipal governments to take property by eminent domain to combat the mortgage/foreclosure crisis. The info, via David Reiss (who also recently posted a related public comment):
The program is Wednesday, October 10, at 12:30 pm EDT; 11:30 am CDT; 10:30 am MDT; 9:30 am PDT.
Participant Passcode: 5577419753
This month’s topic is Can/Should Municipalities Use Eminent Domain to Take Mortgages to Facilitate Mortgage Modifications? This conference call will be moderated by Professor James Geoffrey Durham, University of Dayton School of Law. Professor Steven J. Eagle, Professor of Law, George Mason University School of Law, is one of the nation’s leading scholars on eminent domain and regulatory takings. Professor Eagle will discuss whether it is possible for local governments to use eminent domain to acquire notes secured by mortgages in order to resell them to a private party which will then modify them, both under the 5th Amendment to the U.S. Constitution and also under state constitution taking clauses as they have been limited by amendments and statutes seeking to define what is a public use. Professor Robert C. Hockett, Professor of Law, Cornell Law School, is the scholar who in June proposed that municipalities could use eminent domain to acquire mortgages, in order to facilitate mortgage modifications to benefit underwater homeowners, in his article: It Takes a Village: Municipal Condemnation Proceedings and Public/Private Partnerships for Mortgage Loan Modification, Value Preservation, and Local Economic Recovery (download paper). Professor Hockett will discuss his proposal, which has received widespread attention. Professor Dale A. Whitman, James E. Campbell Missouri Endowed Professor Emeritus of Law, University of Missouri, Columbia, School of Law, is one of the premier experts on American property law and one of the nation’s foremost mortgage law scholars. Professor Whitman will discuss the impact that implementation of Professor Hockett’s proposal might have on the mortgage markets.
Check out the free telecast on this very interesting and current issue.
October 9, 2012 in Conferences, Eminent Domain, Financial Crisis, Housing, Local Government, Mortgage Crisis, Mortgages, Property, Real Estate Transactions, Scholarship, Takings | Permalink | Comments (0) | TrackBack (0)
Thursday, October 4, 2012
David J. Reiss (Brooklyn) has posted Comment on the Use of Eminent Domain to Restructure Performing Loans, which was submitted to the Federal Housing Finance Agency (No. 2012–N–11) (2012). The abstract:
There has been a lot of fear-mongering by financial industry trade groups over the widespread use of eminent domain to restructure residential mortgages. While there may be legitimate business reasons to oppose its use, its inconsistency with Takings jurisprudence should not be one of them. To date, the federal government’s responses to the current crisis in the housing markets have been at cross purposes, half-hearted and self-defeating. So it is not surprising that local governments are attempting to fashion solutions to the problem with the tools at their disposal. Courts should, and likely will, give these democratically-implemented and constitutionally-sound solutions a wide berth as the ship of state tries to right itself after being swamped by a tidal wave of mortgage defaults.
A concise and thoughtful public comment on what is emerging as a hot, hot issue.
October 4, 2012 in Constitutional Law, Eminent Domain, Finance, Housing, Local Government, Mortgage Crisis, Mortgages, Property Rights, Real Estate Transactions, Scholarship, State Government, Takings | Permalink | Comments (0) | TrackBack (0)
Monday, September 10, 2012
Adam J. Levitin (Georgetown Law) and Susan Wachter (Penn--Wharton--Real Estate) have posted Why Housing?, Housing Policy Debate, vol. 23 (2012). The abstract:
come and go. Only the housing bubble, however, brought the economy to its knees.
Why? What makes housing uniquely a cause of macroeconomic risk?
This Article examines the workings of the housing market as well as theories and empirical evidence about the housing bubble. It explains why housing is a particular source of macroeconomic risk and how changes in the housing finance channel were the critical element in the formation of the bubble.
Interesting stuff. A lot has been written about the mortgage/financial crisis, but this is a good point in time for looking back with a more long-term perspective.
Wednesday, September 5, 2012
Chad Pomeroy (St. Mary's) has posted A Theoretical Case for Standardized Vesting Documents. The abstract:
real estate professionals, and lay people throughout the country rely
on the recording system to provide critical information regarding
ownership rights and claims. Indeed, the recording system acts as a
virtually mandatory repository and disseminator of all potential
parties’ claims. This system, in turn, relies on these claimants and
their agents to publicize their claims: property purchasers, lenders,
lien-claimants, title companies, attorneys - these parties interact,
make deals, make claims, order their affairs, and then record. The
information system available to us, then, is only as good as what we
make of it and what we put into it.
As such, it is surprising how little thought has been put into exactly what it is that we record. Should the mortgage of a lender in Ohio look like that of a lender in Florida? Should a deed from an individual in Texas differ from that of a corporation in Nevada? As it stands now, no one familiar with real estate law or commerce would expect different parties in different jurisdictions to record identical, or even similar, instruments. In an immediate sense, this heterogeneity of the recorded documents (“vesting heterogeneity”) does not seem a good thing: parties utilizing the recording system generally seek to make known, or to discern, the same generic type of information – that is, evidence of claims upon property – so why are different forms and types of documents utilized all over the country?
This article analyzes this vesting heterogeneity from a new perspective and concludes that it is, in fact, cause for significant concern. Vesting heterogeneity has arisen organically, growing with the recording system as they both evolved over time. This historical explanation does not, however, excuse the cost associated with such a lack of uniformity. Anyone seeking information with respect to any piece of property must navigate the complexities and uncertainties that arise because all such information is heterogeneous and, as a consequence, difficult to understand and utilize. This represents both a immediate transactional cost and an increased risk of ill-informed behavior.
This is particularly troublesome because this sort of cost-based concern arising from variability has a well-established analogue in property law that the law clearly desires to avoid. That analogue is the cost that would arise if property law were to permit unlimited property forms and gives rise to what is known as the numerus clausus theory. This theory explains the law’s hostility toward new, or different, types of property and holds that such heterogeneity is not generally permitted because of the extremely high informational costs associated with such creativity.
This article suggests that this common law concept can, and should, inform our analysis of vesting heterogeneity and that it precipitates strongly against such lack of uniformity. This is because the costs that drive the numerus clausus to hold that variability should be limited are strikingly similar to those created by variability of vesting documents. As such, this theory is relevant here such that the same analysis should be applied to vesting heterogeneity by asking whether a different (or “new”) document is helpful enough to outweigh the informational costs inherent therein.
Based on this reasoning, this article concludes that the law is wrong to systematically ignore heterogeneity in vesting documents. Instead, a numerus clausus type of analysis should be applied to new or different vesting documents to determine whether any inherent lack of uniformity is defensible. Where it is not, uniformity should be imposed.
Thursday, August 23, 2012
“I can say this is the same as the crisis in Thailand in 1997,” said Hua Ngoc Thuan, the vice chairman of the People’s Committee of Ho Chi Minh City, the city’s top executive body. “Property investors pushed the prices so high. They bought for speculation — not for use.”
The article describes a Vietnam that sounds similar in many ways to the US and other places: a real estate bubble fueled by overpromotion; a recession that has left land development projects uncompleted; a disproportionate impact on younger workers; hard times for certain sectors of the economy, while others are relatively unscathed. Of course with Vietnam having dived in to the global economy in the past generation, the American recession and the European debt crisis are also having effects in Vietnam. But it's still quite interesting that the trigger seems to be a real estate bubble.
Sunday, August 19, 2012
Gregory M. Stein (Tennessee), who has written a bunch on real estate and land use in contemporary China, has posted Is China's Housing Market Heading Toward a US-Style Crash?, Arizona Journal of International and Comparative Law, Vol. 29, No. 1, 2011 . The abstract:
This article aims to determine whether China is heading toward a U.S.-style market crash in its housing market. Rather than attempting to maintain any suspense, I will disclose here that my conclusion is, “Who knows?” China and the United States have dramatically different histories, cultures, governments, economies, and legal systems. Anyone who claims to have a definitive answer to this question is overly confident.
My more modest goals in this article are to examine the available evidence and see which way it seems to point. The article begins by listing and describing several different ways in which the American housing market failed. It then evaluates the consequences of these failures for the U.S. housing market. Next, the article demonstrates some of the key respects in which the Chinese market differs from the market in the United States. This central portion of the article emphasizes just how difficult it is to make predictions about what might happen in one nation’s housing market based on the experiences of another nation that differs in so many significant ways. Finally, the article provides a description of some of the worrisome similarities between the Chinese and American housing markets. To the extent the previous analysis may have comforted the reader into believing that the Chinese market is unlikely to experience a downturn anytime soon, this last discussion will create some apprehension by highlighting some of the ways in which China might, in fact, be heading down the same path as the United States.
Mark D. Bauer (Stetson) has posted ‘Peter Pan’ as Public Policy: Should Fifty-Five-Plus Age-Restricted Communities Continue to Be Exempt from Civil Rights Laws and Substantive Federal Regulation? The abstract:
Although millions of Americans live in 55-plus age-restricted housing, little research has been done to determine whether these communities benefit their residents, or the nation as a whole. This is particularly ironic because these communities exist in contravention to anti-discrimination laws by virtue of a specific exemption granted to real estate developers by an Act of Congress. Ordinarily age discrimination is prohibited by the Fair Housing Act, Title VIII of the Civil Rights Act of 1968. Successful lobbying by special interest groups carved out an exemption for 55-plus housing.
The original exemption required developers to offer elders special services and facilities in these communities in return for the exemption. Over time, those requirements were eliminated and now the only requirement is that these communities exclude families and children.
While lifestyles focused on golf and tennis may be attractive to younger retirees, older Americans often find themselves in communities bereft of the services and facilities they need for basic life activities and safety. The very nature of these communities result in elders left with depreciating homes, and many are without the financial means to retrofit their 55-plus home or to move into a community better adapted for their needs. This Article explores a popular form of “senior housing” that is unsuitable for most older Americans.
August 19, 2012 in Community Design, Constitutional Law, Development, Federal Government, History, Homeowners Associations, Housing, HUD, Real Estate Transactions, Scholarship, Sun Belt | Permalink | Comments (0) | TrackBack (0)
Wednesday, August 15, 2012
The New York Observer has a list of the 15 Most Fascinating NY Real Estate Cases of the 21st Century, based on a survey of NYC real estate lawyers. Although most involve contracts or financing gone awry, a few involve zoning and land use disputes. They also make use of Sherlock Holmes-esque titles, like "The Case of the Mischievous Mall Developer."
Of particular interest are "The Case of the Masterpiece & The Condo Ad," involving a dispute over advertising, public art, and landmarking. The "Case of the Museum and the Architect" involves a building designed by Jean Nouvel next to MOMA, as well as zoning, landmarking and air rights issues. "The Case of the Brooklyn Basketball Arena" gives a very truncated summary of the series of legal battles over eminent domain and the construction of a new arena for the Brooklyn Nets. (For a more detailed account in response from critics of the development see the Atlantic Yards Report). And "The Case of the Abused J-51" details the legal battles over rent regulation following the $5.4 billion purchase of Stuyvesant Town.
Saturday, August 11, 2012
There has been some discussion over the past couple of months over an innovative proposal to have governments use the eminent domain power to take ownership of underwater mortgages, to decrease the risk of default and then refinance the obligations, all to promote the common good. Here are some links to give you a sense of the major points of this debate.
The launch of this idea comes from a proposal by Law Professor Robert C. Hockett (Cornell) in his piece It Takes a Village: Municipal Condemnation Proceedings and Public/Private Partnerships for Mortgage Loan Modification, Value Preservation, and Local Economic Recovery. The abstract:
Respected real estate analysts now forecast that the U.S. is poised to experience a renewed round of home mortgage foreclosures over the coming 6 years. Up to 11 million underwater mortgages will be affected. Neither our families, our neighborhoods, nor our state and national economies can bear a resumption of crisis on this order of magnitude.
I argue that ongoing and self-worsening slump in the primary and secondary mortgage markets is rooted in a host of recursive collective action challenges structurally akin to those that brought on the real estate bubble and bust themselves. Collective action problems of this sort require duly authorized collective agents for their solution. At present, the optimally situated such agents for purposes of mortgage market clearing are municipal governments exercising their traditional eminent domain authority.
I sketch a plan pursuant to which municipalities, in partnership with investors, can condemn underwater mortgage notes, pay mortgagees fair market value for the same, and systematically write down principal. Because in so doing they will be doing what parties themselves would do voluntarily were they not challenged by structural impediments to collective action, municipalities acting on this plan will be rendering all better off. They will also be leading the urgently necessary project of eliminating debt overhang nationwide and thereby at last ending our ongoing debt deflation.
Professor Hockett's idea was then promoted in the media by, among others, Prof. Robert J. Shiller (Yale--Economics & Finance), in the New York Times Piece Reviving Real Estate Requires Collective Action. As the title indicates, Schiller theorizes the mortgage crisis as in part a collective action problem that can be addressed by Hockett's proposal to use eminent domain to seize underwater mortgages.
But eminent domain law needn’t be restricted to real estate. It could be applied to mortgages as well. Governments could seize underwater mortgages, paying investors fair market value for them. This is common sense too. The true fair market value for these mortgages is arguably far below their face value, given the likelihood of default, with its attendant costs.
Professor Hockett argues that a government, whether federal, state or local, can start doing just this right now, using large databases of information about mortgage pools and homeowner credit scores. After a market analysis, it seizes the mortgages. Then it can pay them off at fair value, or a little over that, with money from new investors, issuing new mortgages with smaller balances to the homeowners.
Yesterday in The Atlantic Cities, Amanda Erickson published an excellent overview story about the proposal, Can Eminent Domain Solve our Mortgage Woes?. Of note to us are the comments by the eminent eminent domain expert (that's not a typo) Prof. Thomas Merrill (Columbia).
It's a clever idea. But is it legal? "It's very unusual," says Thomas W. Merrill, a law professor at Columbia University who specializes in property law. But, he notes, "this doesn't mean it's unconstitutional."
Before the landmark 2005 Kelo vs. New London decision, Merrill says, there's little doubt that the courts have upheld this kind of law. "Before Kelo, courts took a hands-off approach," Merrill says. In the 1984 case Hawaii Housing Authority vs. Midkiff, the Supreme Court ruled that the Hawaiian legislature could take a property controlled by landlords and sell it back to leasees. "Condemning a landlord's interest in property to transfer to a tenant is not too different," Merrill says.
But Kelo changed that. In that case, the Supreme Court ruled that cities could use eminent domain to transfer land from one private owner to another, and that doing so for economic development purposes constitutes a public use. "At this point, I guess you'd have to say all bets are off in terms of what is and isn't eminent domain," Merrill says.
And finally for now, Prof. Richard Epstein is critical of the idea. From More Nonsense on the Home Mortgage Front: Don't Let Municipal Governments Condemn Mortgages at Bargain Rates:
The idea has already been rightly panned by the Wall Street Journal. But the entire proposal needs still further consideration. First off, Hockett and his group insist that there is a huge collective action problem that prevents the rationalization of mortgage matters. And there is. It is called local government regulations that have blocked the foreclosure measures set out above. Handle those and the externalities to which they refer disappear. No longer do we have owners neglecting property or clogging the courts with endless motions.
Again, this post is just to give you some links to look at the arguments. From my perspective, these are some fascinating arguments that illuminate not only the mortgage crisis but also the general debate over eminent domain.
August 11, 2012 in Constitutional Law, Eminent Domain, Finance, Housing, Local Government, Mortgage Crisis, Mortgages, Politics, Property Theory, Real Estate Transactions, Scholarship, Takings | Permalink | Comments (1) | TrackBack (0)
Thursday, August 9, 2012
Sara C. Bronin (Connecticut) and J. Peter Byrne (Georgetown) recently published a new casebook called Historic Preservation Law, Foundation Press 2012. HP is quickly becoming a central part of land use planning, as the authors make clear in this excerpt from the Preface:
This book was written for anyone interested in the increasingly important area of historic preservation law. With this book, we hope to advance and encourage the teaching of preservation law, shape the way the field is conceived, and create a practical resource that will be consulted by attorneys and other preservation professionals.
Our approach to the subject is reasonably straightforward. We present the most significant legal issues in preservation and place them in a contemporary context, identifying contested questions and areas of reform. The format of the book is traditional: edited leading cases with notes that provide explanation, extension, and issues for discussion. Given the interdisciplinary nature of the field, we belive that the legal issues can only be understood in light of historical, aesthetic, political, and administrative issues that make up the larger realm of preservation. Accordingly, we provide secondary materials, both legal and non-legal.
Because we focus on preservation of buildings and sites, we present preservation as part of land use or urban development law. Thus, we provide extensive treatment of local preservation law, which regulates private property, as well as relevant issues in real estate finance and project development. We also provide comprehensive treatment of federal law, including the National Historical Preservation Act and related statutes. In addition, we explore federal laws that address preservation vis-a-vis cultural property issues, particularly regarding Native American and archaelogical sites. Preservation has also generated important and interesting constitutional questions related to takings, religious freedoms, and free speech rights, which we address.
This is the first, or at least the most recent, major casebook on the law of historic preservation that I know of. Professors Bronin and Byrne, who are also accomplished scholars in the land use field generally, have provided us a major contribution with this book, which looks to be *the* significant text in HP law. Land use scholars and professionals should definitely have this one on their shelves.
August 9, 2012 in Constitutional Law, Development, Federal Government, Historic Preservation, History, Local Government, Property, Real Estate Transactions, Scholarship, Teaching | Permalink | Comments (0) | TrackBack (0)
Tuesday, July 17, 2012
The latest report from the NYU Furman Center for Real Estate & Urban Policy:
We are pleased to share with you our latest New York City Quarterly Housing Update (Q1 2012). We find that home sales volume rose in the first quarter of 2012, with the number of transactions citywide up almost five percent. Housing prices throughout the city are up 3.5 percent compared to the same quarter last year. In the Bronx, however, prices fell more than nine percent between the fourth quarter of 2011 and the first quarter of 2012--the largest single-quarter decline in the borough since 2002.
The report also finds that the number of foreclosure notices issued in Q1 2012 has fallen citywide since its peak in the third quarter of 2009. However, foreclosure notices in Queens and Staten Island increased by more than 20 percent from the fourth quarter of 2011. You can read the full report here, or the press release here.
The Furman Center's Quarterly Housing Update is unique among New York City housing reports because it incorporates sales data, residential development indicators, and foreclosures. It also presents a repeat sales index for each borough to capture price appreciation while controlling for housing quality. The publication is available on a quarterly basis at:
Valuable data and analysis, as always.