PropertyProf Blog

Editor: Stephen Clowney
Univ. of Arkansas, Fayetteville

A Member of the Law Professor Blogs Network

Saturday, March 20, 2010

Thanks, and Day Labor Markets

Thanks so much to Ben for the opportunity to blog here at PropertyProf, and for the kind welcome.  As Ben said, a large part of my research focus is on the evolving relationship between property rights and social standards.  I thought I'd start my blogging stint here by commenting on some fairly recent news stories that I think capture that dynamic (and, truth be told, that I write about in my latest article, which may or may not be accessible yet on SSRN).  

Many property rights scholars have recognized that property rights evolve with changes in normative sensibilities and economic incentives -- although which of those two is the primary driver of evolution has been a matter of considerable debate.  Today, changes in both normative sensibilities and economic incentives seem to be driving changes with regard to the right to make a particular use of public space -- day labor markets.  Every morning in cities large and small across the United States, men and women gather in hope of being hired for short-term labor projects, particularly in construction and landscaping.  The practice has existed for years, largely without controversy.  But recently things have changed.  In some places, ordinances have been enacted to restrict or prohibit the use of public space for day labor markets; in others, ordinances that have existed, but never been enforced against day labor markets, are being used to shut them down; in still others, neo-Nazis and other groups have gathered to disrupt the markets and drive away those participating in them.  The Town of Oyster Bay, New York, has gone so far as to prohibit people standing on sidewalks from making hand signals to passing vehicles.  Why?

I think we can posit at least two explanations, one economic and one normative, though the two are not entirely distinct.  The recession has increased the scarcity of a valuable (even critical) resource: work.  As competition has increased for that resource, competitors act to limit their rivals' access to it.  By limiting or destroying the right to use public space for day labor markets, other job applicants increase the cost of obtaining work for those laborers, and thus decrease the competition they face.  Note that this isn't necessarily the efficient result a Demsetz might have envisaged; rather, it may simply be the result of political leverage that allows the powerful to, in Stuart Banner's words, "grab a larger share of the pie."  Regardless, however, the incentive driving the change is economic.

But there is a normative explanation as well: the vast majority of the day laborers are Latino, and many are illegal immigrants.  Neo-nazis clearly aren't showing up to make trouble just because of economic incentives.  But even among the less extreme population, growing anti-immigration sentiment is undoubtedly a factor in the increasing normative disapproval of day labor markets in public spaces.  Those changes in normative sensibilities are driving changes in law and, consequently, property rights.

Mark Edwards

I look forward to your comments, but they are held pending approval, so there will be some delay in posting.

March 20, 2010 in Property Theory | Permalink | Comments (0) | TrackBack (0)

Friday, March 19, 2010

Mark Edwards Guest Blogging

Edwards-Mark I'm delighted that Mark Edwards (William Mitchell) will be guest blogging with us.  Mark is doing some interesting work on social standards and property rights, and I'm looking forward to his posts.  Welcome!

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

March 19, 2010 in About This Blog | Permalink | Comments (0) | TrackBack (0)

Thursday, March 18, 2010

Barros on Homestead and Other Legal Protections of the Home

I've posted a short encyclopedia entry called Homestead and Other Legal Protections of the Home on SSRN.  Here's the abstract:

In many legal contexts, homes are given more legal protection than other types of property. This additional protection can be divided into three categories. First, possessory rights in a home might be given more protection than possessory rights in another kind of property. For example, a legal system might make it more difficult for a creditor to force the sale a home to satisfy a debt than it would be for the creditor to force the sale of another type of property (say, a commercial office building) to satisfy that same debt. Second, a legal system might economically favor ownership or possession of a home over ownership or possession of another type of property. For example, ownership of a home might be subsidized where ownership of other types of property is not. Third, a home might be given special treatment when issues of privacy, freedom, or security are at stake. For example, a legal system might require the government to have a stronger justification for searching a home than is required for searching a commercial property.

This short encyclopedia entry focuses on the first category – those legal protections that give special protection to possessory rights in a home. It first elaborates on the distinction between rules favoring possession and the other two types of special legal protections given to homes. It then discusses various types of legal rules that give additional protection to possession of a home, including homestead rules favoring homeowners over creditors and tenure rules favoring renters over their landlords. Finally, it discusses theoretical issues related to the protection of possessory rights in homes, and considers open questions about whether this special protection is justified.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

March 18, 2010 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 17, 2010

Teaching Real Estate Transactions

I am working on developing a 3 credit course in Real Estate Transactions for the fall semester at Wake Forest Law School.  I would love to hear from PropertyProfs who are already teaching such a class.

Here is the blurb that I have written about my new course:

Real Estate Transactions.  This course will provide a survey of the legal and business issues relating to the acquisition, development, leasing, and disposition of commercial real estate, with a focus on the issues arising in the development and ownership of large commercial developments such as shopping centers and office buildings.  This course will include a skills component and students will participate in negotiating and drafting a real estate contract (purchase agreement or lease) for a hypothetical client.

My thought is to spend some time going through the major legal and business issues in the acquisition of real estate, then split the class.  Half would represent the seller and half would represent the buyer in a hypothetical transaction.  We would do in-class negotiation (one on one or in pairs) and then draft components of the purchase agreement in teams.  They would go through several rounds of this in small groups and we would debrief as a class each day.  I've tried this kind of exercise in a legal writing/contract drafting class and it was very effective.

I would then go through the same pattern with a lease -- lecture on the main concepts and then have them negotiate and draft provisions.

Has anyone tried this kind of method before and can offer some thoughts?  Or have you tried another approach and found it to be successful?

As a textbook, I am thinking of using the ABA's Practical Guide to Commercial Real Estate Transactions, because I am familiar with that book.  I will also supplement with my own materials.  I know that there are other good books out there.  Any recommendations?

I would love to see sample syllabi, etc.  My e-mail is marshlaw at me.com.

Thanks!

Tanya Marsh

[Comments are held for approval, so there will be some delay in posting]

March 17, 2010 in Teaching | Permalink | Comments (5) | TrackBack (0)

Tuesday, March 16, 2010

Oliveri on Discriminatory Housing Advertisements On-Line

Rigel Christine Oliveri (Missouri) has posted Discriminatory Housing Advertisements On-Line: Lessons from Craigslist on SSRN.  Here's the abstract:

The Fair Housing Act makes it illegal to publish discriminatory housing advertisements. This has long been applied to newspapers, which have effectively screened all discriminatory housing ads from sight. However, in 1996 Congress created a loophole when it immunized website operators from liability for the content posted to their sites by third parties. Without publisher liability, websites have no incentive to screen out discriminatory housing ads. The result is that such ads are proliferating in cyberspace.

While this situation is problematic from a fair housing standpoint, it presents a valuable opportunity. For the first time in a generation discriminatory housing advertisements are out in the open and available for analysis. This article contains a comprehensive review of discriminatory housing ads appearing on the popular website craigslist, which yields a number of interesting findings, including: (1) The vast majority of those who post discriminatory on-line advertisements for housing are placed by people seeking roommates. (2) The overwhelming majority of problematic ads discriminate on the basis of familial status. There are very few that discriminate based on race, ethnicity, or religion. (3) The few roommate ads that do mention race, ethnicity, or religion are more likely to discriminate in favor of minority groups. Thus, they appear more as expressions of individual diversity of backgrounds and beliefs than exclusionary tools of a majoritarian power structure.

This information can and should inform changes to the legislative and enforcement regime for dealing with discriminatory housing advertisements. For example, we should recognize that the roommate relationship is different from traditional rental housing, and accord roommate-seekers protection from the law – protection which is currently given to small landlords (who arguably do not need it) but not co-lessees. Fair housing advocates also must address the unique problems presented by familial status as a protected category, both in terms of public awareness and acceptance of the law.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

March 16, 2010 in Real Estate Transactions, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Monday, March 15, 2010

Roberts on Federally Granted Railroad Rights of Way

Darwin P. Roberts (U.S. Attorney's Office) has posted The Legal History of Federally Granted Railroad Rights of Way on SSRN.  Here's the abstract:

In the nineteenth century, the United States government granted railroads thousands of miles of rights of way across the public lands. If the railroads abandon those rights of way, federal law allows them to be reused for new purposes, particularly for recreational trails. This has raised a contentious question that has split the federal courts of appeals: did the federal government retain any interest in railroad rights of way granted after 1871‘ If not, its contemporary reuse of such property potentially makes it liable for millions of dollars in Fifth Amendment “takings” - as the Federal Circuit has recently held.

Beginning in 1850, Congress subsidized the construction of railroads by granting them both rights of way and millions of acres of the public lands. The Supreme Court has held that this type of “land grant” gave the railroads a “limited fee” interest in the right of way property, with a “right of reverter” in the United States if the right of way was later abandoned. In the late 1860s, though, the public came to vehemently oppose giving so much of the public domain away to railroads. As a consequence, federal land subsidy grants to railroads ended in 1871. The Supreme Court has held that because Congress no longer wished to “grant lands” to railroads after that year, Congress not only ceased granting subsidy lands, but also altered the nature of its rights of way, from granting limited fees to granting only easements. This concept of an 1871 shift in right of way law has defined this area of the law since 1942, when the Court first announced it.

This article contends, however, that the entire notion of an “1871 shift” in federal railroad right of way law is a fallacy, derived from the Supreme Court’s adoption of a faulty historical analysis advanced by the Solicitor General. The evidence actually indicates that throughout the nineteenth century, beginning in the 1830s, Congress followed consistent policies with respect to its railroad rights of way. Despite characterizing them as “easements” or similar to easements, it viewed them as property over which it retained continued ownership and control. Moreover, because Congress viewed railroad right of way grants as separate from its railroad land subsidy grants, it did not intend to change rights of way in 1871 when it ceased granting land subsidies to railroads.

The Solicitor General and the Supreme Court erred in 1942 by conflating the two types of grants, and misreading the relevant legislative history. If the Supreme Court has the opportunity to resolve the circuit split, it should overrule its erroneous prior reasoning, and affirm the United States’ broad and continuing authority over all federally granted railroad rights of way, from both before and after 1871.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

March 15, 2010 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Garnett on Order-Maintenance and Land Use Policy

Nicole Stelle Garnett (Notre Dame) has posted Order-Maintenance Agenda as Land Use Policy on SSRN.  Here's the abstract:

Debates about the broken windows hypothesis focus almost exclusively on whether the order-maintenance agenda represents wise criminal law policy — specifically on whether, when, and at what cost, order-maintenance policing techniques reduce serious crime. These questions are important, but incomplete. This Essay, which was solicited for a symposium on urban-development policy, considers potential benefits of order-maintenance policies other than crime-reduction, especially reducing the fear of crime. The Broken Windows essay itself urged that attention to disorder was important not just because disorder was a precursor to more serious crime, but also because disorder undermined residents’ sense of security. The later scholarly explications of the broken windows hypothesis also emphasize the connection between restoring the perception of security and its reality. One reason that social norms scholars link disorder and crime is that disorder has a predictable effect on law-abiding citizens: those with financial resources move away from, or choose not to move into, disorderly neighborhoods; those without resources remain inside and avoid public places. Even if these reactions (somewhat surprisingly) do not lead to more crime in a community, they certainly disadvantage city neighborhoods vis-à-vis their suburban alternatives. Moreover, and importantly, the goals of reducing crime and of helping poor, inner-city residents feel better about, and more vested in, their communities are not necessarily coterminous; order-maintenance policies might achieve the latter without achieving the former. In other words, it might be the case that order-maintenance policies “work” even if they do not curb serious crime.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

March 15, 2010 in Land Use, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Sunday, March 14, 2010

Malloy on Mortgage Market Reform

Robin Paul Malloy (Syracuse) has posted Mortgage Market Reform and the Fallacy of Self-Correcting Markets on SSRN.  Here's the abstract:

The article discusses the mortgage market collapse in connection to the broader financial crisis. In developing the argument I proceed in several steps. First, I discuss the fallacy of self-correcting markets as a way of explaining the need for volitional and purposeful regulation in the housing and mortgage markets. This involves explaining that markets are not self-correcting; while Alan Greenspan and company waited for the invisible hand to appear and correct the mortgage markets, the system collapsed. Second, I provide an overview of the basic exchange relationships among the parties involved in the underlying real estate transaction, those in the primary and secondary mortgage market, and potential investors in mortgage related securities. Third, I explain the inapplicability of Hernado DeSoto's idea of parallel lives between underlying real estate transactions and the market for securities based on the mortgages in these underlying transactions. And, fourth, I suggest a series of regulatory and transactional reforms to consider for improving the soundness of the underlying real estate transaction and the operation of the primary mortgage markets. These reforms include: taking steps to reduce speculation in housing prices; eliminating incentives for over borrowing and over lending; and, adjusting the structure of the underlying real estate transaction to undermine an inverse prisoner’s dilemma problem. I also suggest that lawyers reassert themselves into doing basic real estate transactions and that real estate sales people and others be restricted to simply doing the sales work that they are trained to do.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

March 14, 2010 in Real Estate Transactions, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

The Stagnation of the Common Law of Property(?)

I just finished my seventh and final "property year in review" article for the Indiana Law Review.  Each year, I abstract and comment on "noteworthy" decisions in Indiana property law or new statutes.

Since this year is my last article, I decided to more broadly critique the state of the common law of property in Indiana.  After particularly discussing commercial leasing and commercial real estate transactions, I concluded that it is "stagnant."  The most recent decisions on many key issues date to the 1980s or even the 1880s.  The old cases are particularly frustrating because they invariably describe disputes over agricultural land and we try to apply them to much more sophisticated and complicated arrangements. 

I tried to sum up what I see as the fundamental problem in the following paragraph:

Although Indiana seems particularly resistant to change, or has been especially limited in its opportunities to effect change, the problem is not limited to this state.  More broadly, the stagnation of the common law of property results from a combination of factors.  Transactional attorneys view the litigation process as unworkable, particularly in the real estate context, for three key reasons: (1) the cost; (2) the length of time until resolution; and (3) the uncertain outcome.  If neither the common law nor statutory law provide easy answers to an issue, the parties are likely to conclude that they are better off resolving their differences out of court than spending time and money to achieve an unpredictable result.  This situation is a classic Catch-22 – the parties to real estate disputes refuse to bring their cases to the appellate courts in part because of the failure of the courts to modernize the common law of property, but the appellate courts have limited opportunities to modernize the law because of the failure of parties to modern disputes to allow their cases to be heard.

Without the benefit of the lovely examples I discuss in the article, what do you think?  Am I being overly harsh?  Is the common law of property actually vibrant, dynamic, and relevant? 

Tanya Marsh

[Comments are held for approval, so there will be some delay in posting]

March 14, 2010 in Miscellaneous | Permalink | Comments (2) | TrackBack (0)

Mahoney on the Tension Between Positive and Negative Rights in Eminent Domain

Bran Frederick Mahoney, a student at George Mason, has posted The Greater Good or Property Rights? Resolving the Tension between Positive and Negative Rights in Eminent Domain on SSRN.  Here's the abstract:

This paper examines the background of takings law and differing philosophical viewpoints on individual rights. It then analyzes the balance of rights in the present use of eminent domain, and proposes solutions to current problems with eminent domain and the possible impact of these solutions on the balance of positive and negative rights.

Special attention is given to the status of blight and economic takings after Kelo v. City of New London, and what the jurisprudence in this area means for the balance of rights in the nation as a whole.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

March 14, 2010 in Recent Scholarship, Takings | Permalink | Comments (0) | TrackBack (0)