PropertyProf Blog

Abandoned Property: Star Wars Edition

Here’s an interesting set of pictures from photographer Rä di Martino of Star Wars sets that were abandoned in Morocco and Tunisia.  Through the decades there have been various efforts to save these landmarks, but for the most part they continue to decay.

Steve Clowney

Bright & Hopkins on Models of Affordable Home Ownership in England

Susan Bright (Oxford) and Nick Hopkins (Southampton) have posted Evaluating Legal Models of Affordable Home Ownership in England (Book Chapter) on SSRN.  Here's the abstract:

In this chapter we analyze the legal routes used to deliver Low Cost Home Ownership in England where there is some element of public subsidy involved. In order to evaluate the various products used for LCHO (right to buy, part-ownership, co-operative housing models), this chapter:

a) Explains the legal frameworks used to deliver the main LCHO products available in England;

b) Explores the potential benefits of home ownership to the individual in the form of wealth creation, "mainstreaming" and security of place;

c) Sets out key additional policy objectives of LCHO, in particular introducing and supporting tenure mix (sustainable communities) and sustaining the opportunity for continued use of the subsidy to provide access to LCHO for intermediate income households; and

d) Evaluates the extent to which the different products available deliver both the individual benefits of home ownership and support the wider policy objectives.

Steve Clowney

How We Think About Property - Changes Across Time

David Schorr, writing at the new blog Environment, Law, and History has some insightful things to say about how our conceptions of property and the environment have changed over time.  Schorr focuses on water law in the U.S. and in struggle between Israelis and Palestinians over natural resources.

Steve Clowney

The Best Venn Diagram in History?

This.  Always this.

Steve Clowney

Dellapenna on Groundwater

Joseph Dellapenna (Villanova) has posted A Primer on Groundwater Law (Idaho) on SSRN.  Here's the abstract:

The greater part of fresh water on the planet Earth is under ground and most of that qualifies as "groundwater" in the sense of water available to be pumped to the surface for human exploitation or consumption. This water is subject to a wide range of conditions of occurrence that reflect the great variations in porosity and permeability of the earth’s crust. Its rapidly growing importance as a source of water for agricultural, ecological, industrial, and municipal use around the world has resulted in the major actors in water politics and policy have debated the issues and problems involved in the development and use of groundwater.

The creation, by courts in the United States and England of the common law of ground-water in the nineteenth century was steeped in ignorance. This problem was perhaps best ex-pressed in the Ohio decision of Frazier v. Brown, in which the court stated that "the existence, origin, movement and course of such waters, and the causes which govern and direct their movements, are so secret, occult and concealed, that an attempt to administer any set of legal rules in respect to them would be involved in hopeless uncertainty, and would be, therefore, practically impossible" (emphasis added). To scientists, the relationship of groundwater to surface waters now is a well-known fact. Unfortunately for the future congruity of law and science, the courts in most jurisdictions had spoken of the early common law decisions as rules of property. Courts therefore were reluctant change the rules to bring them into conformity with later scientific knowledge. Yet the explosive growth of groundwater extraction made possible by the high-pressure centrifugal pump created crises in some areas where groundwater demand out-stripped groundwater supply. Eventually, most courts and legislatures became more willing to define the relations of parties concerning their interests in groundwater consistently with recognized scientific knowledge of hydrology and geology.

Because of the relatively recent emergence of groundwater as a field of scientific knowledge and of large-scale economic exploitation, as well as concern over the unsettling of property rights, the law relating to groundwater long remained relatively undeveloped and exhibited considerable confusion. As Mark Goodman, commenting on the state of groundwater law in Arizona in 1978, summed it up, "The history of [groundwater law] is as thrilling as ignorance, inertia, and timidity could have made it." Not the least of the continuing disconnects between water science and water law is the continuing application, in most states, of different bodies of law to surface waters and to groundwater even though they are all part of single hydrologic cycle. This approach carries over to groundwater itself where the rule persists that water flowing in an underground stream is subject to the law applicable to surface waters, while "percolating" groundwater (water seeping through interstices in the soil or rock) is subject to the law applicable to groundwater. This article discusses only the law applicable to groundwater as so narrowly conceived, and in particular to the law allocating groundwater so narrowly conceived to particular users and uses. Today there are five different theories for allocating percolating groundwater to particular users, theories that are reviewed in this article: 1) Absolute dominion (also called "absolute ownership" or "the rule of capture"); 2) Correlative rights; 3) The reasonable use rule; 4) Appropriative rights; and 5) Regulated riparianism.

Steve Clowney

Pennsylvania Landowners Can Get Cash on Spot for Mineral Rights

Fracking continues to kick-up property issues:

The practice has its roots in the early days of the drilling boom, when companies from around the world began leasing land as fast as they could -- locking the property into five-year deals that kept competitors at bay. Then, as drilling picked up, the increased supply of natural gas led to a record-setting drop in prices.

Suddenly, it wasn't as easy to turn a profit on a well. Many companies pulled out of neighborhoods where rigs had been planned, leaving those leases behind in the process. That left many landholders unsure when -- if ever -- they'd see a well on their property that would bring a steady stream of royalty checks with it.

The investment firms moving into the region are offering to buy those left-behind mineral rights. Landowners get money for that vacation home today, and the investment firm gets access to the royalty payments that may -- or may not -- come later.

If there's one word associated with the practice, it's risk -- risk for the company that might acquire useless mineral rights, and risk for the landowner who could miss out on lucrative royalty payments in the future.

Steve Clowney

The Art of Tall Buildings

French photographer Romain Jacquet-Lagrèze has been been fascinated with Hong Kong's tall buildings, with which the city has become synonymous. His images are published in his book, Vertical Horizons.

Steve Clowney

Zacks on the Mortgage Forgiveness Debt Relief Act of 2007

Dustin Zacks (King, Nieves & Zacks PLLC) has posted Avoiding Insult to Injury: Extending and Expanding Cancellation of Indebtedness Income Tax Exemptions for Homeowners (Arkansas Law Review) on SSRN.  Here's the abstract:

This article offers a critical analysis of anti-homeowner arguments that have arisen in the wake of the enactment of the Mortgage Forgiveness Debt Relief Act of 2007 (MFDRA), which excludes forgiven principal residence indebtedness from generating federal income tax liability. Some argue that forgiveness encourages housing speculation and overconsumption or benefits wealthy homeowners more than homeowners of moderate means, while others suggest that forgiveness is not fair to homeowners who paid such taxes prior to Congress’s exemption being enacted.

This article asserts that such criticisms, even if facially valid, are overstated and do not overcome the importance of eliminating existing homeowner incentives to file bankruptcies in order to avoid cancellation of indebtedness income tax. Furthermore, excluding cancellation of indebtedness income tax prevents disincentives to homeowners from seeking to modify their home loans. Aside from addressing scholarship regarding the temporary Congressional exclusion of principal residence indebtedness, this article also proposes an expansion of the permanent exclusions to cancellation of indebtedness taxation in the Internal Revenue Tax Code (the Code). In particular, the existing purchase-price exception to cancellation of indebtedness taxation should be expanded.

Because the purchase-price exception only applies to original lenders negotiating with original purchasers, the exemption has effectively been eliminated for a large portion of homeowners whose loans have been sold on the secondary market. This article argues that the theoretical justifications for the purchase-price exception should apply whether or not a home loan has been sold, as homeowners exercise no control over whether their loans are transferred from lender to lender. The Code already allows for subjective considerations of infirmity and impropriety at origination to equitably justify the purchase-price exception, and this article asserts that such considerations should be even more closely examined in light of the wildly inflated property values and subprime and exotic loans presented to homeowners at the height of the bubble. Therefore, even without a permanent extension of the MFDRA’s temporary exemption, expanding the purchase-price exemption would provide homeowners with incentives to renegotiate their home loans or to negotiate walkaways rather than filing for bankruptcy.

Steve Clowney

Poverty Moves to the Suburbs

Emily Badger reports:

[O]ver the last decade, suburbs have increasingly become home to America's poor. Between 2000 and 2011, the population living in American cities below the poverty line increased by 29 percent. During that same time, across the country in the suburbs of metropolitan areas as diverse as Atlanta and Detroit and Salt Lake City, the ranks of the poor grew by 64 percent. Today, more poor people live in the suburbs (16.4 million of them) than in U.S. cities (13.4 million), despite the perception that poverty remains a uniquely urban problem.

Steve Clowney

Map of the Day: Most Popular Baby Name by State

Steve Clowney

Arlen and Tontrup on the Endowment Effect

Jennifer Arlen (NYU) and  Stephan Tontrup (Max Planck Institute) have posted A Process Account of the Endowment Effect: Voluntary Debiasing Through Agents and Markets on SSRN.  Here's the abstract:

We contest the loss aversion theory of the endowment effect, in which the effect depends on the status of endowment alone. Instead, we propose that the nature of the trading process determines whether people resist or accept an exchange by affecting the responsibility people feel for their choice. The more they feel responsible for the decision, the more they expect experiencing regret over a negative outcome. Aversion to regret causes people to resist a rational trade and exhibit the endowment effect. In a series of experiments, we analyze two institutions that alter the trading process and reduce perceived responsibility --agency and markets. We find that both mute the endowment effect; moreover, participants intentionally use them to self-debias. Since many institutions shift responsibility, we conclude that the endowment effect is not present in many domains previously thought to implicate it. Institutional design often need not rely on paternalistic intervention.

Steve Clowney

Judge Orders Los Angeles BID to Dissolve

A reminder that not everyone loves Business Improvement Districts:

A Los Angeles Superior Court judge has ordered the Arts District Business Improvement District to dissolve, capping a long feud between the entity and a group of property owners. The BID has already halted its privately funded cleaning and safety program in the area.

The May 10 order from Judge Robert H. O’Brien is a victory for a group of Arts District property owners who argued in a lawsuit that the BID broke state law in its formation and therefore is invalid.

O’Brien’s order centered on his finding that the BID spent tax dollars on economic development services that did not provide a special benefit to area property owners.

“Our claim was basically that the constituency in this district is very diverse, and to claim you’re helping both industrial owners and loft owners and residents, there’s no coherent way to have an agenda to help everyone,” said developer Yuval Bar-Zemer, one of the property owners who brought the case against the city.

Steve Clowney

Foundling Tokens

Slate has a captivating  piece on "foundling tokens."

During the 18^th century, mothers who left their babies at London’s Foundling Hospital would deposit something small, but unique, with the hospital to serve as an identifier in the event parents returned to reclaim their children. These “tokens”—scraps of fabric, small metal objects, or bits of jewelry—were sealed in the child’s official record as proof of the parental connection, even as the babies themselves were renamed and vanished into the institution.

Some tokens seem to be repurposed sentimental objects from love affairs, like the ring with a heart inset, which has a poignant inscription on the interior of the band: “He who neglects me loses me.” [...] Some tokens were humble everyday objects, like the hazelnut and the fabric heart: exceedingly simple and slight, given the connection they were meant to signify.

The tradition of leaving tokens ended in the early 19^th century, when the hospital began to follow the much more efficient—albeit prosaic—procedure of issuing receipts to mothers who surrendered their children.

Steve Clowney

Yoo on the Emerging Technologies and Property Theory

Christopher Yoo (Penn) has posted Beyond Coase: Emerging Technologies and Property Theory (Penn) on SSRN.  Here's the abstract:

In addition to prompting the development of the Coase Theorem, Ronald Coase’s landmark 1959 article on The Federal Communications Commission touched off a revolution in spectrum policy. Although one of Coase’s proposed reforms (that spectrum should be allocated through markets) has now become the conventional wisdom, his other principal recommendation (that governments stop dedicating portions of the spectrum to particular uses) has yet to be fully embraced. Drawing on spectrum as well as Internet traffic and electric power as examples, this Article argues that emerging technologies often reflect qualities that make defining property rights particularly difficult. These include the cumulative nature of interference, the presence of significant interdependencies, and the presence of significant geographic discontinuities in interference patterns, exacerbated by the localized nature of information. These technological considerations define the natural boundaries of property by creating transaction-free zones that must be encompassed within a single parcel. They also complicate defining property rights by making it difficult to identify and attribute harm to particular sources of interference. These challenges can make governance a more attractive solution than exclusion.

Other commentators have suggested that the failure of creating well-defined property rights in spectrum support wider use of open access regimes, citing the work of Elinor Ostrom and Michael Heller, or arguing that spectrum is not scarce. Ostrom’s work points out that governance of common property requires features that are quite inconsistent with open access, including a finely tailored and unequal allocation mechanism, strict internal monitoring, strong property protection to prevent outside interference, stability, and homogeneity. Heller’s theory of the anticommons is sometimes misinterpreted as being hostile towards property. Instead, it is better understood as condemning giving exclusionary rights in the same piece of property to multiple owners, all of whom must agree on any major decision. The primary solution to the anticommons is not open access, but rather unitization of the interests in a single owner. Moreover, bargaining over an anticommons is also properly modeled through the chicken (or snowdrift) game, which has more of a zero-sum, all-or-nothing quality, rather than opportunities for cooperation frustrated by a lack of trust that characterize the prisoner’s dilemma and traditional holdout behavior. The final argument, that spectrum is not scarce, simply cannot be squared with Shannon’s Law.

Instead the solution may lie in reconfiguring rights to increase owners’ ability to bargain towards workable solutions. A market maker controlling sufficient property and able to integrate local information could design a mechanism that can solve some of these problems. Property could also be reconfigured to provide more of the primitives needed to write effective contracts. Finally, these challenges, as well as the need to reduce information costs on third parties, provide an explanation for the persistence of use restrictions. In addition, continuing the fiction of government ownership of the spectrum may make it easier to reconfigure rights when necessary.

Steve Clowney

Fines for Agents Who Show Illegal Apartments

The N.Y. Times reports on a local initiative:

The Department of Buildings has begun issuing fines to agents and brokers who advertise and show illegal apartments for rent, a new step in a long battle that has traditionally taken on owners of illegal dwellings. The fines, which have been issued to the agents and the companies they work for, begin at $3,600 and can go up to five times that amount.

From January to March [...] The department issued fines to 10 agents, including agents at Douglas Elliman and Halstead Property, for listing apartments in a variety of neighborhoods and boroughs, including Park Slope and Brighton Beach in Brooklyn, and Hamilton Heights in Upper Manhattan. All of the apartments were in the basement or the cellar, and most did not have the required two means of egress, the department said. The department says the building code gives it the right to issue fines to agents; in the future, it may go after brokers who supervise the agents as well.

Steve Clowney

Ten Buildings That Changed American Architecture

In the PBS special 10 Buildings that Changed America, two architecture gurus discuss the origins of some of the country’s most important buildings.

The hour-long program, which premiered this week take a look at thestories and engineering behind 10 influential American buildings that "changed the way we live, work, and play, and inspired future architecture and construction. It also explores the imagination of the architects that created the structures."

Here's a slideshow of the buildings.

Steve Clowney

Godsil and Simunovich on the Mortgage Crisis and the Ethic of Homeownership

Rachel Godsil (Seton Hall) and David Simunovich (Seton Hall) have posted Protecting Status: The Mortgage Crisis, Eminent Domain, and the Ethic of Homeownership (Fordham) on SSRN.  Here's the abstract:

Homeownership is in crisis. Millions of families are at risk of foreclosure as they are caught between declining housing values and rising interest payments on adjustable-rate mortgages. The primary concern for such families is not that they will become homeless - most families who lose their homes could afford to become renters - but rather that they will lose their status as homeowners. For families required to sell their property by the government's use of eminent domain, a similar issue arises, as the 'fair market value' of some homes (the standard measure of compensation) is generally not enough to allow the family to purchase another home. The harm of losing one's status as homeowner has afar-reaching impact at both the individual and collective levels. Property ownership ties one to the larger community in myriad ways. As compared to renters, homeowners - even those with the same income, education, and other socioeconomic characteristics - tend to be more civically active and more apt to engage in market transactions linked to their homes. Losing this link to the larger market and community will harm a family's long-term prospects. When many families lose these connections, whole communities suffer.

The link between the mortgage crisis and the full-scale financial meltdown has led to bipartisan support for a degree of government intervention unseen since the Great Depression. In this Article, we explore why homeownership is so highly valued-and whether the loss of homeownership status should impel government action. We conclude that this loss does warrant government intervention - but also argue that the myopic focus on homeownership absent an adequate regulatory regime and a broader economic agenda has had dire effects. The families caught by the subprime mortgage debacle were often targeted by predatory lenders because of their membership in vulnerable groups. The government's failure to prevent this exploitative behavior then requires its intervention now. However, it is crucial to ensure that government intervention does not create insurmountable barriers to entry for aspiring homeowners or moral hazard. Accordingly, our status-preservationist approach would protect only those who would have received loans had sound lending practices been utilized and would counsel against the view that homeownership alone is adequate to ensure healthy communities. Rather, homeownership has in the past been linked to behaviors that create sound communities. In the context of eminent domain, the argument for status preservation is even stronger, as it is justified by the U.S. Supreme Court's maxim that compensation should be based on fair market value unless doing so 'would result in manifest injustice to owner or public.' We conclude by considering the broader implications of the economic meltdown and reflect on whether it has so permanently altered our conception of homeownership that homeowner status is in the process of losing its value.

Steve Clowney

Important Nuisance Case in Maryland

From Joe Singer's blog:

The Maryland Court of Appeals ruled in Exxon Mobil Corp. v. Albright, — A.3d —, 2013 WL 673738 (Md. 2013) that property owners near a gas station where 26,000 gallons of gasoline spilled from an underground tank could not sue for nuisance when their wells have not yet been contaminated. The neighbors were not allowed to sue for emotional damages, for reduction of the fair market value of their property or for future costs of medical monitoring. Most courts reach the same result although a few courts have allowed damages in such cases for nearby properties when the reduction in fair market value is substantial.

Steve Clowney

Building Implosion Fail

Oops.

Steve Clowney

Varadarajan on Improvement Doctrines

Deepa Varadarajan (St. John's) has posted Improvement Doctrines (George Mason) on SSRN.  Here's the abstract:

When one party makes significant but unauthorized improvements to another's land, chattels or informational assets, should the "improving" nature of the act alter the liability or remedy calculus? Traditional property law has long had to resolve conflicts that arise when one person improves another's land or chattels without permission -- for example, if A cuts down B's trees and fashions a chair, or A erects a building on B's land. Ordinarily, A would be liable and subject to an injunction because B has a strict right to exclude that is protected by a property rule. But various doctrines in traditional property law, like the doctrines of accession, mistaken improvers of land, and ameliorative waste, make exceptions for improvers. These doctrines either excuse the improver from liability entirely or mandate a remedy more hospitable to the improver. I call these assorted rules "improvement doctrines" and articulate a multi-part framework for understanding the equity and efficiency concerns animating them. In so doing, I challenge the (increasingly contested) presumption that property law unwaveringly favors strict exclusive rights for owners -- a presumption that is often invoked by those advocating strict exclusive rights for intellectual property owners. 

This Article demonstrates that unlike property law, intellectual property law has been less receptive to improvement doctrines. This is particularly surprising given intellectual property's normative commitment to progress and innovation. Patented inventions and copyrighted expressive works necessarily build on what came before. While patent law's “reverse doctrine of equivalents” and copyright's “fair use” doctrine may provide incidental relief for unauthorized improvers in certain cases, these intellectual property doctrines are often indifferent to improvement. Given the uncertainty of intellectual property boundaries and the societal consequences of deterring improvement, I argue that the concerns motivating traditional property's improvement doctrines apply with even greater force to intellectual property. Accordingly, I suggest potential areas of reform in patent and copyright law to enhance and regularize judicial consideration of unauthorized improvement at the liability and remedies stages.

Steve Clowney