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Friday, February 3, 2006

Weekly Top Ten

All of the entries from 7-10 are new on our Weekly Top Ten list of the most-downloaded recent property papers on SSRN.

1. (347) Teaching Law Students About Sprawl, Michael Lewyn (George Washington University Law School)

2. (136) What a Strange Place to Put a Church: The Political Economy of 'Just Compensation', Nicole Stelle Garnett (Notre Dame Law School)

3. (97) Human Nature, the Laws of Nature, and the Nature of Environmental Law, Richard James Lazarus (Georgetown University Law Center)

4. (78) Three Reasons Why Even Good Property Rights Cause Moral Anxiety, Emily L. Sherwin, (Cornell University - School of Law)

5. (68) Did Reform of Prudent Trust Investment Laws Change Trust Portfolio Allocation?, Max M. Schanzenbach & Robert H. Sitkoff (Northwestern University - School of Law and New York University School of Law)

6. (67) It's Not About the Fox: The Untold History of Pierson v. Post, Bethany Berger (Wayne State University - School of Law)

7. (64) Controlling the Grasping Hand: Economic Development Takings after Kelo, Ilya Somin (George Mason University - School of Law)

8. (55) Report Regarding the Pacific McGeorge Workshop on Globalizing the Law School Curriculum, Franklin A. Gevurtz, Linda E. Carter, Julie Davies, Brian K. Landsberg, Thomas O. Main, Michael P. Malloy, and John G. Sprankling (all of the University of the Pacific - McGeorge School of Law)

9. (51) Perpetual Trusts, Conservation Servitudes, and the Problem of the Future, Susan Fletcher French (UCLA School of Law)

10. (51) Do Courts Matter? Rental Markets and the Law, Pablo Casas-Arce and Albert Saiz (University of Oxford - Department of Economics and University of Pennsylvania - The Wharton School - Real Estate Department)

Ben Barros

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February 3, 2006 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

New Chicago Predatory Lending Law

Marcus Cole has an interesting post at BlackProf about a new Illinois law requiring all mortgage applications in certain neighborhoods to go through a government review process:

Nevertheless, Tuesday was a key moment in African-American History.  On Tuesday, in addition to Mrs. King’s passing and Justice Alito’s elevation, the State of Illinois enacted a law that requires all mortgage applications within nine Chicago zip codes to undergo a process of review by the state’s Department of Financial and Professional Regulation.  The department’s review process determines whether mortgage applicants in these neighborhoods must undergo compulsory credit counseling.  If they must, then the mortgage lender must pay the cost of the counseling.

Anyone familiar with Chicago geography and demography knows these nine zip codes.  They are all neighborhoods on the South and Southwest side of Chicago.  They are predominantly African-American neighborhoods. These neighborhoods are some of the most impoverished in the City of Chicago, and indeed, the nation.  On Tuesday, they suddenly became much poorer.

Although the legislators responsible for the new law were motivated by good intentions, they failed to consider the inevitable consequences of their bill.  They wanted to protect poor homeowners in certain neighborhoods from high interest rates and predatory lending practices.  The new law, however, necessarily increases the costs, time and uncertainty associated with mortgage applications in these black neighborhoods.  The cost of credit counseling will be born by and charged to mortgage applicants.  This, in turn, will necessarily decrease the price that new home-buyers can afford to pay for homes in these neighborhoods.  If they can choose to buy in other neighborhoods, where housing money is more affordable, they, on the margin, will.  Furthermore, recent studies of credit counseling programs suggest that these programs have little effect on borrower behavior.  The end result is that homeowners in these poor black neighborhoods suddenly have less equity in their homes than they had on Monday.

Legislation like this is often motivated by an unspoken belief that poor black people are incapable of making important decisions for themselves.  We see this belief reflected in the protection of failed public schools, and now with respect to personal finances.  But the very people for whom such a law was enacted were responsible and wise enough to save to make the down payments necessary to buy these homes in the first place.  Suddenly, these same people must have their choices reviewed and second-guessed by state bureaucrats who have no stake in the outcome, or accountability for incorrect or unresponsive decisions.  It is hard to imagine the fate of a similar but broader law imposing credit counseling upon all Illinois residents, including white professionals residing in the Chicago suburbs of Evanston, Winnetka, or Kennilworth.  Would there have been enough votes in Springfield to impose these “benefits” on everyone, rather than just the residents of the Southwest side of Chicago?

Ben Barros

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February 3, 2006 in Real Estate Transactions | Permalink | Comments (1) | TrackBack (0)

Thursday, February 2, 2006

The Case of the Disappearing Condos

Al Brophy pointed me to an interesting story in the NY Times (unfortunately Times Select access only) about a number of condo projects in Las Vegas that were canceled after the developer had collected deposits from buyers.  The developer sent refund checks to the buyers, but some buyers are taking legal action to try to get the benefit of their bargain:

But Mr. Verdnikov wants more than the [deposit of] $73,672.81. Since he agreed in May 2005 to buy the 1,400-square-foot, two-bedroom apartment near the Las Vegas Strip for $728,900, its value, he says, has increased. "To purchase something similar, we would need to pay $200,000 more," said Mr. Verdnikov, who has been looking for a new apartment with his girlfriend, Gitty Stone. So Mr. Verdnikov is suing for the gain he would have realized if the apartment had been built.

"He deserves to get the benefit of the bargain," said Will Kemp, a lawyer with Harrison, Kemp & Jones in Las Vegas, who is representing Mr. Verdnikov and a dozen other Icon buyers . . .

But whether Mr. Verdnikov — or any buyer — can receive more than a refund of his deposit depends on a number of factors. Some contracts for unbuilt condos allow the seller to back out if it cannot obtain proper financing (a phrase sometimes so vague as to constitute a get-out-of-deal-free card, lawyers say). The contracts for Icon Las Vegas contained no such financing contingency. Related did claim the right to back out if it failed to sell at least half of the units in the project. But observers say the company far exceeded the 50 percent goal, and statements made last year by Mr. Burger support that view.

Other contracts specifically limit damages for cancellation to the amount of the deposit, or to that amount plus interest. Such provisions are generally enforceable, said Eric Glazer, a Hallandale, Fla., lawyer who often represents condo buyers. Someone planning to buy a condo that hasn't been built yet might try to delete that clause from the contract of sale. But in most cases, condo developers will not negotiate provisions. "They have a standard contract; it's take it or leave it," Mr. Glazer said.

The contract at Icon included no limitation on damages, Mr. Kemp said, which is why he believes his clients could win "benefit of the bargain" if the case goes to court. "It's a standard measure of damages in contract law," he said, though he said he had not seen it applied in a case involving an unbuilt condo building.

Ben Barros

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February 2, 2006 in Real Estate Transactions | Permalink | Comments (1) | TrackBack (0)

New Book On Right To Housing

Rachel G. Bratt, Michael E. Stone and Chester Hartman have edited a new book titled A Right To Housing.

In the 1949 Housing Act, Congress declared "a decent home and a suitable living environment for every American family" to be our national housing goal. Today, little more than half a century later, upwards of 100 million people in the United States live in housing that is physically inadequate, unsafe, overcrowded, or unaffordable.

The contributors to A Right to Housing consider the key issues related to America's housing crisis, including income inequality and insecurity, segregation and discrimination, the rights of the elderly, as well as legislative and judicial responses to homelessness. The book offers a detailed examination of how access to adequate housing is directly related to economic security.

With essays by leading activists and scholars, this book presents a powerful and compelling analysis of the persistent inability of the U.S. to meet many of its citizens' housing needs and a comprehensive proposal for progressive change.

Ben Barros

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February 2, 2006 in Books, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 1, 2006

Houston Conference on Natural Gas

The University of Houston Law Center has announced a conference titled Should We Site It Here:  The Environmental Issues Assoicated With Liquefied Natural Gas:

The Expansion of the use of Liquefied Natural Gas (LNG) and how that utilization will occur is probably the most important energy issue that our country has faced since the first widespread adoption of Nuclear Energy. Energy shortages and the accompanying increasing price of natural gas, along with new federal legislation about siting of LNG terminals ensure that LNG will have an enormous future effect on our energy security, energy usage patterns, prosperity and the environment. The University of Houston Law Center's Environmental & Energy Law & Policy Journal will address this important topic at its second annual symposium entitled "Should we Site it Here: Environmental Issues Associated with LNG Development" on Friday, March 3, at the Hilton Hotel on the University of Houston Campus.

This symposium will specifically address the environmental issues associated with the increasing use of LNG in terms of extraction, importation and utilization, and the appropriate body to make siting decisions. This will be the first academic symposium to address these questions and will feature law professors Peter Appel, Eileen Gauna, and Irma Russell addressing federalism, environmental justice, and environmental impacts of fuel switching. The keynote address will be delivered by the Honorable Danny J. Boggs, of the U.S. Sixth Circuit Court of Appeals and former Deputy Secretary of Energy in the Reagan Administration.

Ben Barros

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February 1, 2006 in Conferences, Land Use, Natural Resources | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 31, 2006

Galvan on Religious Land Uses

Sara C. Galvan (Yale Law School) has posted Beyond Worship: The Religious Land Use and Institutionalized Persons Act of 2000 and Religious Institutions' Auxiliary Uses on SSRN.  Here's the abstract:

Religious institutions have long offered their congregants services that go beyond worship. Particularly in the last two decades, they have begun expanding far beyond their traditional offerings to a wider and more diverse array of "auxiliary uses" - non-worship uses that are affiliated with a religious institution. (One type of large religious institution, the megachurch, is fast gaining members by offering schools, community centers, dining facilities, even movie theaters and gymnasiums.)

Government has long granted special protections to the worship uses of religious institutions. A recent federal law - the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) - has nationalized how land use regulations apply to religious institutions. However, as this article argues, RLUIPA does not adequately address the problem of auxiliary uses. To avoid constitutional challenges to RLUIPA, Congress must rework RLUIPA to differentiate between those auxiliary uses that are substantially-related to a religious institution's mission and those that are not.

Ben Barros

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January 31, 2006 in Land Use, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Monday, January 30, 2006

Applying DeSoto to the Reservation

The Wall Street Journal has an opinion story on poverty on Indian reservations that might be of interest to fans of Hernando de Soto:

The main problem with Indian reservations isn't, as some argue, that they were established on worthless tracts of grassland. Consider the case of Buffalo County, S.D., which Census data reveal to be America's poorest county. Some 2,000 people live there. More than 30% of the homes are headed by women without husbands. The median household income is less than $13,000. The unemployment rate is sky high.

Just to the east of Buffalo County lies Jerauld County, which is similar in size and population. Yet only 6% of its homes are headed by women without husbands, the median household income is more than $30,000, and the unemployment rate hovers around 3%. The fundamental difference between these two counties is that the Crow Creek Indian Reservation occupies much of Buffalo County. The place is a pocket of poverty in a land of plenty.

Maybe we should give land back to the rez-dwellers, so that they may own private property the way other Americans do. Currently, the inability to put up land as collateral for personal mortgages and loans is a major obstacle to economic development. This problem is complicated by the fact that not all reservations have adopted uniform commercial codes or created court systems that are independent branches of tribal government -- the sorts of devices and institutions that give confidence to investors who might have the means to fund the small businesses that are the engines of rural economies.

Tribal ownership of the land is defended as the sine qua non of Indian sovereignty, which many activists regard as sacrosanct. It maintains the semifictional notion that the reservations are separate nations within the U.S. Although tribal members are American citizens, the reservations themselves are exempt from many federal and state laws. This is why so many Indian casinos have sprung up in areas that otherwise curb gambling.

Sovereignty also is understood as a form of cultural protectionism. Without it, goes the thinking, Indians eventually will follow the course of immigrant groups and assimilate into the great American melting pot. . . .

Yet the real tragedy is that reservations, as collectivist enclaves within a capitalist society, have beaten down their inhabitants with brute force rather than lifting them up with opportunity. . . .

Ben Barros

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January 30, 2006 in Property Theory | Permalink | Comments (0) | TrackBack (0)

Selling Body Parts

From Slate:

Last week, William Shatner sold his kidney stone to the Web site GoldenPalace.com for $25,000. Shatner, who donated the proceeds to charity, convinced his doctors to give him the stone, which was taken out last autumn. . . .

There are few laws governing medical keepsakes. The California Supreme Court has ruled that living people do not have a right to sue for the return of cell lines removed from them during surgery. It's unclear what effect this decision has had, though. Many hospitals in California still return tissues, and doctors in other states sometimes refuse requests, even if they don't have the backing of state law. Some hospitals forbid giving patients their removed pieces, but the Joint Commission on Accreditation of Healthcare Organizations has no overarching regulations in this area.

Ben Barros

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January 30, 2006 in Property Theory | Permalink | Comments (1) | TrackBack (0)