Saturday, April 21, 2012
Before 1887, the federal government generally allowed tribes their own property law. A few tribes had agreed to dividing the reservation lands into individual parcels, but most did not. Tribal property arrangements were varied, but many included some private property rights. The Yankton Sioux, for example, recognized private rights in timber, if the owner had expended some effort. When the reservation was dividing into individual parcels, the allotting agent refused to honor pre-existing arrangements. Once it was clear that the government would not honor private property rights in timber, all timber was cut and sold.
Whatever economic or moral qualms the allotting agent refusal raises, he adhered to the law. Indians had no right to standing timber, since theirs was a mere right of occupancy. United States v. Cook, 86 U.S. 591, 592 (1873).
Source: Leonard A. Carlson, Indians, Bureaucrats, and Land: The Dawes Act and the Decline of Indian Farming 88 (1981).
Friday, April 20, 2012
C.C. Wang, the father of wedding dress designer Vera Wang, was a very rich oil tycoon. Of interest to property profs, C.C. Wang's estate has just prevailed in a nasty bit of litigation with his mistress of 30 years, Betty Phillips. Wang and Phillips met in the early 1980s and carried on a pretty hot & heavy affair over the course of two decades; he lavished her with millions of dollars worth of gifts, flew her all over the world, and gave her a black AmEx card.
Everything went smoothly until Wang suffered a stroke in 2004, and Phillips rushed from Singapore to see him. When Phillips arrived in New York she was handed a curt letter that set forth Wang's understanding of their "long term friendship:"
[B]y this letter I am making it absolutely clear to you as I did in the past, that I have no intention of marrying you and that under no circumstance whatsoever will we ever be married to each other. [...] Further, I have already adequately provided for you financially and there will be no further financial transfers from me to you. Please confirm that you waive any claim of any kind or nature against me, my family or my estate. [...] Please do not take the formality of this letter as an affront to you but only as a way of preserving the memories we have of our friendship over the years.
Zing. The letter closed with a request, "I would appreciate your signing the copy of this letter indicating your agreement to the foregoing." In 2006, Wang passed away. Betty Phillips brought suit, claiming she had a verbal promise from Wang that she would get a $10 million lump sum payment after his death, and $150,000 a year.
Well, a judge now says that Phillips' signature on the letter means she isn’t entitled to any part of C.C. Wang's fortune. “There is no proof she was forced to sign the letter,” the judge wrote Wednesday. (see here for an actual copy of the letter)
Daniel Rodriguez (Northwestern) & David Schleicher (George Mason) have posted The Location Market on SSRN. Here's the abstract:
Individual location decisions are not given much respect by local governments. Governments frequently use zoning and other regulatory rules to spread development across a city, claiming that the whole city, and not just one favored or disfavored part, should get the benefits and bear the costs of new development. Local governments also create incentives to encourage certain types of development to locate in certain areas — using policy tools that range from non-cumulative zoning to outright subsidies — in order to create particular mixes of industrial, commercial, and residential development. However, the arguments in favor of these policies frequently rely upon a specious depiction of the incentives of governmental decisionmakers on the one hand and private citizens on the other. That is, they fail to see the wisdom behind the old saying that the three most important factors in real estate are “location, location, location.”
This paper focuses on the benefits businesses and residents get from being able to locate in specific places inside a given city. First, it argues that agglomeration economics — the study of why people locate in cities — provides a useful tool for explaining exactly what is lost when a city government uses its zoning power to limit certain uses of land in specific areas inside a city. The reduction in positive externalities like reduced transportation costs, market size effects and information spillovers stand as a counterpoint to zoning's effect in reducing negative externalities like nuisances and the like. We explore the harms to agglomeration economies created by two Washington D.C. policies, a limit on the percentage of storefronts in a neighborhood that can be devoted to bars and restaurants and the federal Height of Buildings Act of 1910.
Second, we argue that the mere fact that agglomeration economies are positive externalities does not necessarily justify subsidizing specific combinations of land uses. Firms and residents have effective tools for creating and maintaining efficient clusters when the scope of agglomerative externalities is sufficiently local and when relocating is sufficiently easy. We also explore the case for subsidies when agglomerative externalities are felt broadly across a city or region and when investments are more fixed.
Thursday, April 19, 2012
Forbes relates the story of how a local homeowners association kiboshed George Lucas' dream of building a 269,000-square-foot movie studio on land he owned in Marin County, just north of San Francisco:
What quashed the 27-year-old plan? An entrenched group of residents living in a 1980s housing development abutting the ranch. The Lucas Valley Estates Homeowners Association (no relation to Lucas the director), representing the desires of 93 homes, argued that the studio’s traffic and noise would have been around the clock and overbearing. They also fretted that downstream creeks would be impacted one way or another.
It turns out that George Lucas, like Han Solo, is not a man you should cross. Unable to get approval for the movie studio from the NIMBY neighbors, Lucas now wants to build low-income housing on the land. No word yet on whether the housing units will be stuffed with Jawas.
(Pic: An artist's rendering of the proposed studio project)
Michael Blumm (Lewis & Clark) and Tim Wigington (Lewis & Clark) have posted The Oregon and California Railroad Grant Lands’ Sordid Past, Contentious Present, and Uncertain Future: A Century of Conflict on SSRN. Here's the abstract:
This article examines the long, contentious history of the Oregon & California Land Grant that produced federal forest lands now managed by the Bureau of Land Management (“O&C lands”), including an analysis of how these lands re-vested to the federal government following decades of corruption and scandal, and the resulting congressional effort that created a management structure supporting local county governments through overharvesting the lands for a half-century. The article proceeds to trace the fate of O&C lands through the “spotted owl wars” of the 1990s, the ensuing Northwest Forest Plan (NWFP), the timber salvage rider of 1995, and the George W. Bush Administration’s unsuccessful attempts to change the compromise reached in the NWFP. The article then explains how decreases in timber harvesting and declines in federal payments have brought the counties reliant on these lands to the brink of bankruptcy, and analyzes two current legislative proposals aimed at increasing harvests on the O&C lands in order to bolster flagging county economies. The article concludes by identifying significant economic and environmental flaws in these proposals and suggests several alternative revenue-producing options that could provide economic security and diversity to the counties without eviscerating the key environmental protections provided by the NWFP and other federal environmental protection statutes.
Wednesday, April 18, 2012
Marina Adshade highlights an eye-catching new study on real estate agents:
Being attractive, for both listing and selling agents, is associated with higher final sale price for a house, with the effect on house prices of having an attractive listing agent is about twice as large as that of an attractive selling agent.
The study also found that the gender of the agent affected the selling price:
It turns out having a male agent is bad for the selling price of a house. Both male listing agents (those acting on behalf of the seller) and male selling agents (those acting on behalf of the buyer) are associated with lower house prices than their female counterparts.
The study proposes two theories to explain why beauty matters:
Either attractive agents use their physical beauty to compensate for low productivity (i.e., they don’t actually work that hard to sell the house because their attractiveness helps get a higher price). Or they use their beauty to attract better listings that command higher prices but are no better (or worse) at selling them than other agents. The authors of this paper side with the second explanation – that agents don’t actually use their beauty to sell properties more successfully, but rather are better at attracting listings that they can sell for higher prices.
Douglas Laycock (Virginia) has posted The Neglected Defense of Undue Hardship (and the Doctrinal Train Wreck in Boomer v. Atlantic Cement) (Journal of Tort Law) on SSRN. Here's the abstract:
Economically minded legal scholars have devoted much attention to the comparative costs of property rules and liability rules, but little attention to the legal rule that most squarely addresses that choice — the defense of undue hardship. In general, a court will refuse an injunction, and leave plaintiff to his damage remedy, if defendant’s cost of complying with the injunction would be greatly disproportionate to the benefits to plaintiff.
This defense may have been rendered obscure to law-and-economics scholars by the highly visible opinion of the New York Court of Appeals in Boomer v. Atlantic Cement, which seemed to say that the cost of compliance had been irrelevant in New York prior to the court’s decision in Boomer itself. Boomer was in fact no innovation, and the defense of undue hardship had long been established in New York as elsewhere.
The undue-hardship defense implements the core economic concern with cost, but it differs from traditional economic analysis in important ways, and those differences are analyzed here. The defense could have provided a ready-made solution to the problem of “patent trolls,” had the Supreme Court attended to it in eBay v. MercExchange. And subsequent developments in Boomer, on remand from the Court of Appeals, illustrate that supracompensatory remedies, such as disgorgement of unjust enrichment and even punitive damages, can function as liability rules rather than property rules
Tuesday, April 17, 2012
Jessica Owley (Buffalo) has posted Neoliberal Land Conservation and Social Justice on SSRN. Here's the abstract:
Private land conservation programs in North America tend to convey the greatest benefits to those who are already relatively well off in terms of land, wealth, and quality of life. For example, conservation easements — the fastest growing method of land protection in the United States — reward landowners with cash payments and tax breaks. At the same time, these programs tend to focus protected land in areas with low population densities. These benign sounding programs can hamper social services by reducing tax revenues and preventing the development of socially desirable amenities like affordable housing. This article describes the emergence of conservation easements as a land protection mechanism, situating it within the worldwide trend of neoliberal conservation and emergence of new environmental governance systems dominated by private actors. Specifically, this article examines the social justice concerns of conservation easements including questionable use of public funding, inequitable distribution of environmental amenities, and concerns about democracy and accountability. Rethinking conservation easement placement, use, and enforcement along with reducing or removing the tax breaks associated with them would alleviate, but not erase, some of the environmental justice concerns.
Monday, April 16, 2012
The Washington Post runs a story on a re-newed push to loosen Washington D.C.'s building height restrictions:
Mayor Vincent C. Gray has spoken with U.S. Rep. Darrell Issa and Del. Eleanor Holmes Norton in recent weeks about ways Congress could amend height regulations that limit most city buildings to 130 feet. . .
The mayor’s stance will likely prompt a backlash from some civic groups and preservationists, who have long sought to protect city views. “We hold these national monuments as a treasure to be viewed and enjoyed and respected by people from all over the world and, for that reason, the current height limitations ought to be maintained. Period,” said William P. Lightfoot, a former D.C. Council member. “One story will block somebody’s view, and that is wrong.”
In a recent WSJ op-ed piece, historian David Beito and economist Daniel Smith point out that Joplin, MO has put togehter a more effective response to tornado destruction than Tuscaloosa, AL. The reason for the divergence, the authors argue, is that the cities have imposed drasticlly different land use regimes. While Joplin is "letting local business lead the revival," Tuscaloosa has mandated an inefficent set of "top-down rules."
The reason for Joplin’s successes and Tuscaloosa’s shortcomings? In Tuscaloosa, officials sought to remake the urban landscape top-down, imposing a redevelopment plan on businesses. Joplin took a bottom-up approach, allowing businesses to take the lead in recovery….
The Alabama city’s recovery plan, “Tuscaloosa Forward,” is indeed state-of-the-art urban planning—and that’s the crux of the problem. It sets out to “courageously create a showpiece” of “unique neighborhoods that are healthy, safe, accessible, connected, and sustainable,” all anchored by “village centers” for shopping (in a local economy that struggles to sustain current shopping centers). Another goal is to “preserve neighborhood character” from a “disproportionate ratio of renters to owners.” The plan never mentions protecting property rights.
In Joplin, the official plan not only makes property rights a priority but clocks in at only 21 pages, compared with Tuscaloosa’s 128. Joplin’s plan also relied heavily on input from businesses (including through a Citizen’s Advisory Recovery Team) instead of Tuscaloosa’s reliance on outside consulting firms. “We need to say to our businesses, community, and to our citizens, ‘If you guys want to rebuild your houses, we’ll do everything we can to make it happen,’” said Joplin City Council member William Scearce in an interview.
Instead of encouraging businesses to rebuild as quickly as possible, Tuscaloosa enforced restrictive zoning rules and building codes that raised costs—prohibitively, in some cases. John Carney, owner of Express Oil Change, which was annihilated by the storm, estimates that the city’s delays and regulation will cost him nearly $100,000. And trying to follow the rules often yielded mountains of red tape, as the city rejected businesses’ proposals one after another….
Joplin took a dramatically different approach. According to interviews with local business owners, right after disaster struck the city council formally and informally rolled back existing regulations, liberally waving licensing and zoning mandates….
The owner of one Joplin construction company told us that when it came to regulations, the “city just sort of backed out. . . . We had projects that we completed before we got building permits.” Said another Joplin resident: “When you have the magnitude of that disaster, really the old ways of doing things are suspended for a while until you create whatever normal is. . . . The government was realistic to know that there is a period of time when common sense, codes and laws that are in place to protect people are suspended for the sake of the greater good.”