April 22, 2011
Outlawing "Fake" Neighborhoods
Real Estate agents are a devious lot - mandating 6% commissions, failing to tell buyers that their legal duty often runs to the seller, pretending that a property is in a safer or more desirable neighborhood and demanding a higher price. Boo.
Some real estate agents are even more aggressive, inventing entirely new neighborhood names for "up and coming" areas. South Harlem becomes SoHa. The area "down under the Manhattan Bridge Overpass" becomes DUMBO. The place downwind of the sewage treatment plant becomes Dowisetrepla.
Finally, the anti-Real Estate Agent Brigade has a hero. According to the New York Times, "State assemblyman, Hakeem Jeffries, is writing legislation that would punish real estate agents for inventing neighborhood names and for falsely stretching their boundaries. It would also require that name changes get city approval."
Obviously, the regulation here is impractical - neighborhood borders are notoriously difficult to define and they change over time (see this map of Manhattan neighborhoods). Moreover, the whole process would be subject to easy capture by agents.
Nonetheless, anyone willing to stand up to the real estate cabal deserves some praise. And, as Mr. Jeffries notes, “Neighborhoods have a history, culture and character that should not be tossed overboard whenever a Realtor decides it would be easier to market under another name.”
April 21, 2011
A New Urbanist Call to Arms
New Urbanist heavyweight, Andres Duany, has come out swinging in the recent issue of Metropolis Magazine. Duany has penned a pretty stirring defense of New Urbanism's accomplishments, and makes time to attack the "postmodernists," "architecture students from elite schools," and members of the "avant-garde," that have poo-pooed the movement.
The New Urbanism is in reality an expanding web of ideas, techniques, projects, and people. The Congress for the New Urbanism (CNU) is an institution chartered 18 years ago with a budget, a board, and a staff. . . .New Urbanists wrote HUD’s HOPE VI standards and are thereby responsible for about 111,000 new and renovated units of affordable housing—virtually the entire supply of the last 15 years, with a good proportion designed by CNU members. . . . A diverse array of techniques has been rescued from oblivion and tested in hundreds of built projects. New Urbanist architecture’s visible “nostalgia” is easily dismissed by critics, but its power is really in software and other methods . . .
Reiss on Reforming Fannie Mae and Freddie Mac
David Reiss (Brooklyn) has posted Fannie Mae, Freddie Mac, and the Future of Federal Housing Finance Policy: A Study of Regulatory Privilege (Alabama Law Review) on SSRN. Here's the abstract:
The federal government recently placed Fannie Mae and Freddie Mac, the government-chartered, privately owned mortgage finance companies, in conservatorship. These two massive companies are profit-driven, but as government-sponsored enterprises they also have a government-mandated mission to provide liquidity and stability to the United States mortgage market and to achieve certain affordable housing goals. How the two companies should exit their conservatorship has implications that reach throughout the global financial markets and are of key importance to the future of American housing finance policy.
While the American taxpayer will be required to fund a bailout of the two companies that will be measured in the hundreds of billions of dollars, the current state of affairs presents an opportunity to reform the two companies and the manner in which the residential mortgage market is structured. Few scholars, however, have provided a framework in which to conceptualize the possibilities for reform.
This Article employs regulatory theory to construct such a framework. A critical insight of this body of literature is that regulatory privilege should be presumed to be inconsistent with a competitive market, unless proven otherwise. The federal government's special treatment of Fannie and Freddie is an extraordinary regulatory privilege in terms of its absolute value, its impact on its competitors and its cost to the federal government. Regulatory theory thereby clarifies how Fannie and Freddie have relied upon their hybrid public/private structure to obtain and protect economic rents at the expense of taxpayers as well as Fannie and Freddie's competitors.
Once analyzed in the context of regulatory theory, Fannie and Freddie's future seems clear. They should be privatized so that they can compete on an even playing field with other financial institutions and their public functions should be assumed by pure government actors. While this is a radical solution and one that would have been considered politically naive until the recent credit crisis, it is now a serious option that should garner additional attention once its rationale is set forth.
April 20, 2011
Who Owns the West?
For those of you that don't follow Glenn Beck, you may have missed this address on federally owned property. Although Beck's outburst is filled with a few a million nutty conspiracy theories, I think he's asking a pretty important question: Why is so much land in the West owned by the federal government? Check out the following maps - the first shows all federally owned land (including Indian reservations) and the second shows federal land as a percentage of total state land area:
If we really believe in the power of private ownership to incentivize useful activity, why isn't there more of a push to auction off some (a lot?) of this land? Currently, driving across much of the West is like driving across the moon - it's wasted, desolate space. Why not turn that over to private entrepreneurs? Maybe we'd get fewer moon craters and more Las Vegases.
April 19, 2011
A Property Professor Pilgrimage
If you ever happen to find yourself in Worcester (England) make sure you stop by the Cathedral to visit the tomb of Thomas de Littleton. Check it out:
Littleton, a judge and legal scholar authored Treatise on Tenures (1481), a book widely regarded the first property textbook (Here's the Wikipedia entry). Famously, Littleton's work was the first attempt to scientifically classify rights in land. The Tenures remained a cornerstone of legal education for almost 350 years and is still an important window into the world of feudal real estate law. If any of you are looking to get me a present this year, Abe Books has a 1594 version going for $3500.
April 18, 2011
Are Building Codes Making Us Too Safe?
There's a debate raging in Pennsylvania about whether the state's building code has gone too far in the pursuit of safety. Specifically, the legislature is arguing about a law that requires sprinkler systems in all newly built single-family homes. Only California and Pennsylvania have such a measure.
On one side of the debate, public-safety advocates and firefighters argue that the sprinklers save lives and reduce property damage when fires spark to life. Opponents don't dispute these benefits. They argue, instead, that the negatives outweigh the positives. Sprinkler systems significantly increase building costs, inspection costs, & maintenance costs, and only generate a relatively small amount of added safety protection.
Before coming to a firm conclusion on the merits of the policy, I'd like to see more data on how much this costs on per-life-saved basis. I'm also curious to see if the $5000 in added cost per home will do anything to constrain the ever-growing size of the American home.
Hirokawa on Property Rights and Ecosystem Services
Keith Hirokawa (Albany) has posted Three Stories About Nature: Property, the Environment, and Ecosystem Services (Mercer Law Review) on SSRN. Here's the abstract:
The relationship between our understanding of nature and how we allocate rights to property is a necessary but indeterminate one. This article explores three different approaches to this understanding – Property, Environment, and Ecosystem Services – to illustrate different resolutions to an otherwise basic controversy over competing claims to property in natural things. Ultimately, this analysis reveals the conceptual commitments and legal consequences involved in ‘ecosystem services,’ and how the ecosystem services story attempts to converge economics and ecology in property. Ecosystem services casts the character of nature as ecosystem functionality, the value of nature as economic value in goods and services, and the use of nature’s goods and services as a benefit to human well-being.
By looking at the ways the ecosystem services approach diverges from other descriptions of nature, this article also explores how property may react and adapt to the values embodied in ecosystem services. The ecosystem services approach provides an articulation of property value’s dependence on ecosystem influences, and as a result, deflates the importance of property boundaries; challenges to ecosystem services will invariably arise where property value is contingent on ecosystems processes occurring on another’s property. This article argues that the ecosystem services approach results in property without boundaries, in which boundaries become less relevant not just for the process of identifying nature, but also for identifying property interests.