Thursday, March 31, 2011

Confessions of a Black Gentrifier

Shani Hilton has a piece in the Washington City Paper that's generated a lot of discussion in blog-world.  She highlights how her experience as a black gentrifier both overlaps with and remains distinct from the experience of white newcomers:

Crack cocaine hit D.C. and many black people with money—like most people with money would—headed to the suburbs. Those who couldn’t leave, and those who stayed to fight, had a ravaged city to contend with. This is the story we know.

But now, living in the city is cool again, thanks in no small part to development incentivized by government investment. And because we live in a “nation of cowards” (as U.S. Attorney General Eric Holder put it) where perhaps the only thing harder to talk about than race is class, it’s unsurprising that worries about gentrification boil down to white versus black, instead of educated and privileged versus uneducated and underserved.

That’s not to say that what we talk about when we talk about gentrification has nothing to do with race. The opposite is clearly true. White people don’t just “happen” to be better off, in general, than blacks. There’s systemic injustice that’s obviously based in racism. But instead of using that knowledge to spark a discussion about larger societal issues, there’s just pearl-clutching aplenty about the color of the new faces in the neighborhood.

Steve Clowney

March 31, 2011 in Home and Housing | Permalink | Comments (1) | TrackBack (0)

Menashi on Property Rights, Christian Ethics, and Locke

Steven Menashi has posted Cain as His Brother’s Keeper: Property Rights and Christian Ethics in Locke's Two Treatises of Government (Seton Hall Law Review) on SSRN.  Here's the abstract:

Those scholars who regard Locke’s theory of property as a reflection of conventional Christian views pay insufficient attention to the deliberate rhetorical method of his Two Treatises of Government. Close attention to the text reveals profound criticisms of prevailing Christian doctrine. In fact, Locke’s theory of property forms the core of a moral theory that aims to supplant traditional religious teaching with an ethic of human industry and individual autonomy. Understanding Locke’s intention illuminates the foundations of American constitutionalism and of modern liberalism.

Steve Clowney

March 31, 2011 in Property Theory, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 30, 2011

Iglesias on the FHA and Private Residential Occupancy Standards

Tim Iglesias (U. San Francisco) has posted Moving Beyond the Two-Person-Per-Bedroom: Revitalizing Application of the Federal Fair Housing Act to Private Residential Occupancy Standards on SSRN.  Here's the abstract:

New empirical evidence demonstrates that the common residential occupancy standard of two-persons-per-bedroom substantially limits the housing choices of many thousands of families, especially Latinos, Asians and extended families. The federal Fair Housing Act makes overly restrictive policies illegal, but the enforcement practices of the U.S. Department of Housing and Urban Development (HUD) have enabled the two-persons-per-bedroom standard to become de facto law. This article urges HUD to use its regulatory authority to remedy the situation and offers several solutions. And, if HUD fails to act, it encourages private plaintiffs to challenge the two-persons-per-bedroom standard and provides guidance to courts in deciding these cases.

Ben Barros

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

March 30, 2011 in Home and Housing, Landlord-Tenant, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Strand on Inheriting Inequality

Palma Joy Strand (Creighton) has posted Inheriting Inequality: Wealth, Race, and the Laws of Succession on SSRN.  Here's the abstract:

The article begins by documenting deep inequality in the form of Black-White wealth disparities: While the overall wealth distribution in the United States is highly unequal from both historical and international perspectives, racial wealth disparities are particularly acute, with median Black net worth approximately a tenth of median White net worth (as compared to median Black income that is approximately two-thirds of median White income). Next, the article ties the perpetuation of this inequality to current inheritance law. It then confronts this inequality as a civil rights issue in terms of its social effects, its historical causes, and legal avenues for attacking it. Finally, the article proposes two changes in our laws of succession to address this contemporary manifestation of White advantage and Black disadvantage. First, the article explains how civil rights considerations support existing proposals that inheritances be taxed as windfall income to those who receive them (as are lottery winnings currently). Second, the article identifies a need for revising intestacy law to provide heirs with clear title to assets, especially homes belonging to families of modest wealth whose wealth is primarily the value of those homes.


Ben Barros

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

March 30, 2011 in Estates In Land, Future Interests and the RAP, Recent Scholarship, Trusts | Permalink | Comments (0) | TrackBack (0)

The Rise of the Israeli Legal Academic: America 1, Israel 0

Usisrael I spent a few hours last night trying to build a friendship with the work of Hanoch Dagan.  As one drink melted into three, the reading got me to thinking about the substantial impact that Israeli academics have made on the American legal academy. Property theory in particular, through the work of scholars like Dagan and Amnon Lehavi, has been well-pollinated with ideas from the Holy Land. 

In my mind, this wave of Israelis studying in American LLM programs, arguing about American case law, and writing in American law journals has certainly benefited the USA.  I wonder, however, about the effect of these developments on Israel.  What happens when the brain trust of a nation consistently grapples with another country’s legal problems?

The answer, I think, isn’t pretty.  We’ve already seen this play out in the U.S. – as law professors have moved to speak to a broader national audience, they’ve largely ignored municipal & state problems, and surrendered their relationships with the local bar.  Moreover, there seems a real danger that Israeli academics who have enmeshed themselves in American legal norms, may try to export ideas that will germinate in strange ways back on their native soil. 

The depressing reality is that there doesn’t appear to be any easy way, either here or abroad, to reverse this collective action problem.  Everyone just “knows” that it’s better to publish an article on constitutional theory in the Harvard Law Review than it is write a piece on Kentucky’s taxation of unmined coal, even if the latter issue affects the lives of way more people.  How to reverse the trend?  Perhaps public universities need to take the lead by requiring new professors to engage with one state or local issue before going up for tenure.  Maybe Israeli universities should give bonus money for scholars that write on Israeli-specific issues.  The fate of communities, and even nations, may be at stake.      

 Steve Clowney

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

March 30, 2011 | Permalink | Comments (1) | TrackBack (0)

Lind on Public Nuisance Law and Bank-Owned Housing

Lind Kermit Lind (Cleveland State) has posted Can Public Nuisance Law Protect Your Neighborhood from Big Banks? (Suffolk Law Review) on SSRN.  Here's the abstract:

One manifestation of the mortgage crisis of the past decade is the destabilization of housing markets and neighborhoods where mortgage defaults were concentrated. As banks and their mortgage servicers employ business practices that result in banks or their agents controlling or owning vacant dwellings, the noncompliance with housing and other municipal codes by these institutional absentee owners presents neighborhoods and cities with a huge and costly public nuisance problem.

This article explores both the theory of public nuisance law and the experience of applying nuisance law in practice to mitigate the harmful consequences of bank debt collection and REO management. It looks at how and to what extent public nuisance law provides protection for those non-defaulting homeowners whose health, safety and welfare are threatened by the business practices of big banks. It compares litigation that applies public nuisance law in different ways to distinguish viable uses from unsuccessful uses of public nuisance law doctrine. The recent efforts to use public nuisance law against manufacturers and marketers of harmful products like guns and tobacco are distinguished from the application of public nuisance law against owners of real estate maintenance deficiencies are in violation of laws protecting the public health, safety and welfare.

Steve Clowney

March 30, 2011 in Recent Scholarship | Permalink | Comments (1) | TrackBack (0)

Tuesday, March 29, 2011

Leaving the Barn Door Open

It's bad to close the barn door after the horse is gone.  But it's just as bad to fill the barn back up with horses, then reassure everyone that it is now secure, because the barn door is only open wide enough for the horses to escape in single file.  That's what the FDIC appears to be ready to do with regard to mortgage-backed securities.

According to the New York Times, the FDIC is about to adopt rules that would go a long way to correcting some systemically catastrophic faults in the securitization business.  For that, they deserve praise (and I should point out, the FDIC under the admirable Sheila Bair has truly been a stand-up force throughout this mess).  But going a long way is like closing the barn door most of the way -- it doesn't help much if the horses can still slip through.

Ssb guide to mbs

Frequent readers here might remember that I've argued several times that the single most effective way to reform the MBS industry is to require loan originators to retain a certain percentage of the loans they make, and to choose those retained randomly.  I've suggested 20% be retained in-house, randomly chosen. The MBS industry can thrive, providing liquidity for the residential market, but originators are bound to the risk of the loans they originate, which creates every incentive for them to lend wisely.

The proposed FDIC rules, thankfully, adopt that very principle -- but then gut it in the details.

Rather than a simple percentage rule with randomized selection for the retained loans, under the proposed rules,

  • high quality loans are exempt from the risk retention pool, off-the-top;
  • only 5% of the risk from mortgage-backed securities derived from lower quality of loans that make up the risk retention pool must be retained;
  • the risk can be split among the loan originator, loan aggregators, and loan securitizers -- that effectively reduces the risk to any of them well below the 5% line;
  • the lenders have considerable flexibility in choosing their method of exposure to the 5% risk -- either by retaining a 5% exposure in all securitizations, or retaining a representative sample of loans in-house equivalent to a 5% exposure -- but the proposed rules do not specify a mechanism by which the 5% are selected or determined to be 'representative.'   

The proposed rules do not do enough, in my opinion, to make sure that the risk retained by originators is of sufficient quantity and quality to incentivize them to make only sensible loans.  Under the system that crashed the U.S. economy in 2008, lenders could reap the benefit of originating all loans, since the cost of originating bad ones was externalized to the usually uninformed holders of MBSs.  There are lots of potential ways of reforming the system, but none is as clean and efficient as requiring that a substantial portion (I still say 20%, as is required in Canada, which did not suffer an MBS crash) of risk is retained in-house, and that percentage is chosen randomly.  That system requires relatively little oversight, and no wiggle room for escape.

Bank of Canada

The proposed rules don't leave the barn door open as much as they might have, but closing it 2/3rds of the way doesn't help much if the horses can still get out.

There will be a comment period after the proposed rules are announced.  I hope to submit some, and I'd like to hear yours.

Mark A. Edwards

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

March 29, 2011 in Law Reform, Mortgage Crisis | Permalink | Comments (0) | TrackBack (0)

50 Years of Urban Planning Histroy in 6 frames

This 1998 cartoon from Tom Toles has been making the rounds through the intertubes:


Steve Clowney

(Image found with creative commons search tool.  For more of Toles' work, see here. Hat Tip, Matt Yglesias)

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

March 29, 2011 | Permalink | Comments (0) | TrackBack (0)

Gold and Sagalyn on Blight

Martin Gold (Sidley Austin) and Lynne Sagalyn (Columbia Business) have posted The Use and Abuse of Blight in Eminent Domain (Fordham Urban Law Journal) on SSRN.  Here's the abstract:

Blight findings have functioned as a cornerstone for condemnation since the great urban decline of the mid-twentieth century prompted governments at all levels throughout the country to intervene in the real estate market. Elements of blight, and then the term itself, became a basis for this intervention. But the use of blight as a basis for takings has become increasingly controversial as its application has migrated from slum clearance to urban renewal, then to economic development projects, and on to revenue-enhancing projects. And, at the same time, the definition has been expanded to give government greater and greater latitude. Immediately following the largely negative reaction to the U.S. Supreme Court decision in Kelo vs. City of New London, home owners, business activists and state politicians sought "reform" to their state’s eminent domain statutes. One of the most important items on the agenda was the use and abuse of blight.

In this paper, we take a close look at the issue. We briefly describe the origins of the use of the term and discuss how, in the absence of a clear, unambiguous definition, the eminent domain statutes of the nation’s fifty states describe blight through locally developed definitions and criteria which are complicated and diverse. Even prior to Kelo, several states enacted reforms aimed at curbing abuses arising from their blight criteria, but these reforms did not change the character of the definition or the highly subjective aspects of its application. Eminent domain is a balance between government and public needs on the one hand and property owner rights on the other. As a means of evaluating the use of eminent domain and blight findings, we lay out a hierarchy for projects in which the level of public benefits is compared with the level of private benefits. Where a particular eminent domain taking falls along our spectrum will depend upon its ratio of public benefits to private benefits.

In addressing abuses in the use of blight criteria, we look at the reforms made in the post-Kelo era. Although forty-three states enacted Post Kelo reforms, clashing political and business forces failed to check the permissiveness under which private property in most states can still be condemned as "blighted." So we turn our attention to the creation of a better definition and criteria. We focus on two major reforms: the elimination of the most abused criteria and the use of quantification. Believing, as we do, that there are clear and compelling reasons for using the power of eminent domain for public purposes (and not just pure public use) our purpose is to see established thoughtfully crafted, objective and measurable, standards for the determination of blight.

 Steve Clowney

March 29, 2011 | Permalink | Comments (1) | TrackBack (0)

Monday, March 28, 2011

Parking Meters for Sale

Slate has a good article about the temptation to privatize America's infrastructure:

[A] 2008 GAO report looked at the privatizations of the Indiana Toll Road and the Chicago Skyway. It found many benefits to these deals, including the availability of cash upfront and the transfer of both operating and financial risks to the private sector. But it also warned that these deals could result in a loss of long-term value—stealing from the future to pay bills today. The GAO also noted that the United States failed to emulate Europe's example of employing a systematic, standardized set of procedures to make sure that such important considerations were taken into account—and that debate would be held in public.

Steve Clowney

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

March 28, 2011 | Permalink | Comments (0) | TrackBack (0)

The Cost of Urban Water

An interactive map that shows the cost of water in cities aroung the world, both in raw terms and as a percentage of GDP.  It's pretty amazing that water is cheaper in El Paso and Las Vegas than it is in New York.

Steve Clowney

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

March 28, 2011 | Permalink | Comments (0) | TrackBack (0)

Penalver and Strahilevitz on Judicial Takings

Eduardo Penalver (Cornell) and Lior Strahilevitz (Chicago) have posted Judicial Takings or Due Process? on SSRN.  Here's the abstract:

In Stop the Beach Renourishment v. Florida Department of Environmental Protection, 130 S. Ct. 2592 (2010), a plurality of the Supreme Court concluded that the Takings Clause of the United States Constitution prohibits the judiciary from declaring that “what was once an established right of private property no longer exists” unless the property owner in question receives just compensation. In this paper, we delineate the boundaries between a judicial taking and a violation of the Constitution’s due process protections. The result is a judicial takings doctrine that is narrower and more coherent than the one suggested by Stop the Beach.

Our argument proceeds in two parts. The first is a conceptual section that explains what factors are relevant to determining whether a judicial action diminishing a private property interest is a judicial taking or something else. In our view, where a judicial decision intentionally seizes private property in order to achieve a legitimate public end, the Takings Clause is an appropriate framework for evaluating the constitutionality of the state’s action. Due Process is the more appropriate doctrinal pathway where the judiciary does not intend to abrogate a private owner’s property rights, or where the diminution of private property rights results from a judicial action that serves no legitimate public purpose. By clarifying the boundaries of judicial takings, we also hope to shed light on the constitutional foundation for numerous state-court doctrines concerning the retroactivity of new property rules. The second section articulates a novel functional argument, which suggests that creating liability for judicial takings may cause litigants to underinvest in high quality legal representation, which will in turn increase the likelihood of judicial mistakes and contribute to the destabilization of existing entitlements. This phenomenon prompts us to argue that cases in which the underinvestment incentives are most pronounced should be litigated under the Due Process Clause, but cases where repeat-play or the government’s involvement as a litigant mitigates the underinvestment problem represent more appropriate vehicles for judicial takings treatment. What rides on the distinction between judicial takings and due process violations? Under our approach, judicial takings cases should be (a) easier to win than due process cases, (b) more likely to result in damages remedies than injunctive remedies, and (c) may lend themselves to attractive “comparative fault” inspired solutions.

Steve Clowney

March 28, 2011 | Permalink | Comments (0) | TrackBack (0)