September 7, 2012
The Takings Clause and the Propery of Homeless Persons
In this case, the government not only seized the property, but also destroyed it after seizure. Cases going back to the nineteenth and early twentieth centuries hold that government destruction of private property qualifies as a taking requiring just compensation. For example, the government must compensate property owners whose property is destroyed by flooding caused by a government-constructed dam. This is consistent with text and original meaning as well as precedent. An officially authorized seizure of property by government agents without any intention of ever returning it surely qualifies as a taking. And if the property is subsequently destroyed at the order of the state, it surely qualifies as a “public use.”
Pomeroy on Penn Central
Adam Pomeroy (Pacific Legal Foundation) has posted Penn Central after 35 Years: A Three-Part Balancing Test or a One-Strike Rule? on SSRN. Here's the abstract:
nearly thirty-five years, the test laid out by the Supreme Court in Penn
Central Transportation Co. v. City of New York has been the principal
means for determining whether a land use regulation constitutes a taking
under the Federal Constitution. During that time, a broad academic
consensus has emerged that the standard set forth by Penn Central is a
balancing test which considers three factors. Yet, despite this academic
consensus, an examination of the case law reveals that no such
consensus exists among the federal courts. A recent dissent in the Ninth
Circuit, commenting upon the jurisprudential divide within the circuit,
asked: Is Penn Central to be applied as a genuine three-factor
balancing test, or does government escape liability for a taking if it
can prevail on any one of those factors?
This article answers that question. More specifically, it answers whether the lower federal courts apply Penn Central as a true, three-factor balancing test, or a type of “one-strike you’re out” test, or something in between. It does so through a comprehensive, empirical analysis of all cases in the First, Ninth, and Federal Circuits which cite to Penn Central (nearly 500 cases). The review looked at how often the courts actually applied all three factors from the test, how often the courts applied the three factors as a genuine balancing test, and how often plaintiffs succeeded in their takings claim. The data indicates that the predominate practice of the federal courts is not to use Penn Central as a balancing test. Additionally, the article uses a case study of Guggenheim v. City of Goleta to demonstrate the divergent ways federal courts actually apply the Penn Central test.
September 6, 2012
Mobile Homes Aren't Really Mobile
Fred Clark sees problems on the horizon in mobile home communities:
The problem with mobile homes is that they’re not really mobile. They’re anchored to a particular site, and detaching them to transport them elsewhere is extremely expensive and, in many cases, impossible. That means the regular rules of the market do not apply — there can be no competition to restrain arbitrary or extreme rent hikes because these home-owners are, literally, stuck right where they are.
The article then notes that mobile rents have become a hot-button issue in a handful of local elections around the country:
Rising lot rents in manufactured home communities is shaping up to be one of the central issues in the race for the state representative seat from District 37, which includes Georgetown and Long Neck.
Democratic challenger Beth McGinn, a resident of a manufactured home community in Long Neck, has taken incumbent Republican Ruth Briggs King to task for opting out of a House vote on legislation that would have limited lot rental increases.
… The proposed legislation in question, Senate Bill 205, would have required the owners of manufactured home communities to seek state approval for average rent hikes greater than the previous year’s increase in the Consumer Price Index.
(HT: Andrew Sullivan)
Turnbull on Delegating Eminent Domain Powers to Private Firms
Geoffrey Turnbull (Georgia State - Economics) has posted Delegating Eminent Domain Powers to Private Firms: Land Use and Efficiency Implications (Journal of Real Estate Finance and Economics) on SSRN. Here's the abstract:
Many private common carriers or regulated utilities have eminent domain powers in the U.S. The rationale resembles that for local governments; lower cost of assembling land for long distance electric transmission, gas and oil products pipelines, etc. Recent court cases raise questions about whether eminent domain allows firms to use inefficiently long indirect land corridors, inefficiently wide corridors, or higher value land when lower value land is available as an alternative? Despite the incentive to overuse capital under rate-of-return regulation, it turns out that the firm adopts an excessive land corridor width only to the extent that corridor width is tied to capital usage. For route selection, rate-of-return regulated firms follow the same Pareto rule that would be followed by an efficiency-oriented government when designating which land to take for a transmission route by eminent domain.
September 5, 2012
Chinese Cities: Not Quite as Soulcrushing as You've Heard!
Angered by IIsaac Stone Fish's piece in Foreign Policy that claimed China's cities, "with their lack of civil society, apocalyptic air pollution, snarling traffic, and suffocating state bureaucracy, are still terrible places to live," Lisa Gu writes a passionate defense of her homeland's urban landscape.
Updating the Foreclosure Mess
The NY Times looks at how deficiencies within MERS (Mortgage Electronic Registration Systems) continue to cause problems for courts and borrowers:
Amid the foreclosure crisis . . .critics have contended that the registry . . . served to hide the true owner of a mortgage, making it difficult for borrowers to get help in working out their loans. The facts in [recent cases] seem to indicate another flaw with the MERS registry — that it may not even track mortgages effectively.
[Here's one example - the case of Eugene Kline, a borrowers who had two outstanding mortgages on his home and ultimately defaulted.] At the time of the foreclosure, Wells Fargo held both loans taken on by Mr. Kline. Nevertheless, its lawyers sued WMC, contending WMC held the smaller loan. Even though WMC did not own the loan, its lawyers represented to the court that it did. All the while court costs and other charges were billed to Mr. Kline. Many questions arise in this case. For starters, if the MERS registry is the accurate record it claims to be, why didn’t Wells Fargo or its lawyers see that it, not WMC, held the second lien when the Kline foreclosure began?
Levitin & Wachter on What Made Housing Vulnerable to a Bubble
Adam Levitin (Georgetown) and Susan Wachter (Wharton) have posted Why Housing? (Housing Policy Debate) on SSRN. Here's the abstract:
What made housing vulnerable to a bubble? And why has the housing market been so impervious to attempts at resuscitation? This
Article critically reviews the theories of the housing bubble. It
argues that housing is unusually susceptible to booms and busts because
credit conditions affect demand and because the market is incomplete and
difficult to short. Housing market distress transmits to the
macroeconomy through a balance sheet channel, a construction channel,
and a collateral channel.
Housing is unique as an asset class in that it is both a consumption and investment good. It is also the largest single consumer asset and debt class. Because housing is credit-backed and such a large asset class, failure will impact the financial system itself and pull down the economy as a whole. The dual-use of housing, its ubiquity on consumer balance sheets, its highly correlated pricing, and its linkage to the macroeconomy make it a particularly painful type of asset bubble to deflate.
The credit-backed nature of housing is also the key to understanding why there was a bubble. We argue that the bubble must be understood as stemming from the change in the mortgage financing channel from Agency securitization to private-label securitization (PLS). This shift enabled financial intermediaries — economic, but not legal agents of borrowers and investors — to exploit the information problems inherent in PLS for their own short-term gain. In other words, a set of agency problems in financial intermediation was the critical factor in fomenting the housing bubble.
September 4, 2012
Osofsky & Wiseman on Dynamic Energy Federalism
Hari Osofsky (Minnesota) and Hannah Wiseman (Florida State) have posted Dynamic Energy Federalism on SSRN. Here's the abstract:
energy law and the scholarship analyzing it are deeply fragmented. Each
source of energy has a distinct legal regime, and limited federal
regulation in some areas has resulted in divergent state and local
approaches to regulation. Much of the existing energy law literature
reflects these substantive and structural divisions, and focuses on
particular aspects of the energy system and associated federalism
disputes. However, in order to meet modern energy challenges — such as
reducing risks from deepwater drilling and hydraulic fracturing,
maintaining the reliability of the electricity grid in this period of
rapid technological change, and producing cleaner energy — we need a
more dynamic, holistic understanding of energy law. Examining the
energy system as a whole reveals patterns across substantive areas and
allows them to learn from one another.
This Article provides the first systematic account of energy federalism, proposing a novel model for understanding the energy system and its federalism dynamics. It begins by describing the U.S. energy system as comprised of interacting physical, market, and regulatory dimensions. The Article next explains why this complex system requires a federalism model that moves beyond disputes over federal versus state authority; it describes the many vertical interactions (those across levels of government, from the local to the international) and horizontal interactions (those among actors within the same level of government) within different types of energy regulation. The Article then considers the governance challenges created by these interactions, with a focus on inadequate regulatory authority, simultaneous overlap and fragmentation of regulation and institutions, and the difficulties of including key public and private stakeholders while avoiding inappropriate regulatory capture, such as when powerful utilities or oil companies gain control of regulatory processes to protect their private interests at the expense of the public. The Article concludes by proposing dynamic federalism principles for designing institutions that are responsive to these governance challenges through (1) creating needed authority; (2) reducing fragmentation; and (3) allowing for high levels of involvement from key public and private stakeholders that allow for meaningful input without capture. It also introduces our companion article, Hybrid Energy Governance, which applies these principles through detailed case studies to assess institutional innovation in areas critical to energy transformation.
September 3, 2012
Guest Bloggers Wanted
As the summer turns to fall, we're looking for a few guest bloggers to join us. If you're interested, please drop me an email. Guest stints generally last about a month, and we hope you'll post at around twice a week. If you've ever wondered if you'd like to blog, this is a low-pressure way to find out if you're made of the right kind of iron. Benefits include the opportunity to promote your scholarship, a cool new line on your C.V., and the promise of copious free drinks on me at the law conference of your choice.
Recent SSRN Downloads
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Housing Market Heading Toward a US-Style Crash?
Gregory M. Stein (Tennessee)
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Estates: Remedying Wrongful Interference with Inheritance
John C. P. Goldberg (Harvard); Robert H. Sitkoff (Harvard)
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Acquisition and Unilateralism: Kant, Hegel, and Corrective Justice
N. W. Sage (Toronto)
8. [67 downloads] Absolute
Preferences and Relative Preferences in Property Law
Lior Strahilevitz (Chicago)
10. [58 downloads] Landscape
Fairness: Removing Discrimination from the Built Environment
Stephen Clowney (Kentucky)