Friday, June 28, 2013
Building codes are often criticised as overly restrictive and costly. The New York Times, looking at India, reminds us that unregulated building does have consequences:
Mumbai has seen an alarming number of building mishaps this year, but what is more troubling is that more structures are likely to be vulnerable to collapse as old ones crumble from neglect and new ones are poorly made. [...]
Newer buildings, however, often have structural problems as developers compromise on quality in favor of speed. “The problem is that land has become so valuable that people are building on the land quickly, just to get something in place, and not with the intention of occupying it or keeping the inhabitants in mind,” said Matias Echanove, co-founder of URBZ, an urban research collective. “The acceleration of this process means that substandard apartments are quickly put up for purely speculative reasons.”
A bipartisan group of senators on Tuesday proposed an overhaul to the housing finance system that would gradually eliminate Fannie Mae and Freddie Mac, the two government-sponsored mortgage guarantee giants, and shift more mortgage and credit risk to the private sector.
Eight lawmakers from the Senate Banking Committee – four Democrats and four Republicans – said their legislation would protect taxpayers from bearing the costs of housing market downturns as occurred in the 2008 financial crisis when Fannie and Freddie were nationalized and bailed out with $187 billion in taxpayer-funded loans.
"All these years later, nothing has changed," said Sen. Bob Corker, R-Tenn., "It's time to end this failed model."
Thursday, June 27, 2013
At Prawfsblawg, Eduardo Penalver has a terrific post on the recent takings case in which he takes to pieces Justice Alito's majority opinion and looks at the distinction between takings and the unconstitutional conditions doctrine.
Reuters looks into the divorce of Harold Hamm, the Oklahoman who owns "more oil in the ground than any other American." Hamm has an $11 billion dollar fortune and did not ask his wife (of 25 years) to sign a prenup when they married:
Oklahoma attorneys familiar with the case say a settlement could cost him about $3 billion or more.
That's 60 percent higher than the largest reported divorce settlement - News Corp chairman Rupert Murdoch's $1.7 billion pay-out to ex-wife Anna in 1999. Murdoch has filed for divorce from his current wife, Wendi Deng, a spokesman said Thursday, confirming a report by Deadline Hollywood. The media mogul has a prenup, said a person familiar with the matter, but its terms aren't disclosed.
A multi-billion-dollar settlement would vault Sue Ann Hamm, 56, into the ranks of the 20 wealthiest women in America - worth more than Oprah Winfrey, the entertainment mogul whose fortune was estimated by Forbes at $2.8 billion this year.
Amnon Lehavi (IDC Herzliya - Israel) has recently finished his book The Construction of Property (Cambridge University Press). Here's the publisher's blurb:
The Construction of Property identifies the structural and institutional foundations of property, and explains how these features can accommodate various normative agendas. Offering rich and cutting-edge analysis, the book studies the spectrum of property regimes including private, common and public property as well as innovative forms of property hybrids such as US-style residential community associations, the British Private Finance Initiative, the Israeli Renewing Kibbutz, community land trusts and grassroots phenomena of property ordering in publicly-owned open spaces. It also investigates the protagonists of property beyond the individual and the state, identifying the key role that community organisations and business corporations play for both the private and public aspects of property. The book then addresses property's greatest challenge: the move from a largely domestic legal construct into one that accommodates the increasing social and economic forces of globalisation.
Wednesday, June 26, 2013
The always-insightful Tim Mulvaney has updated his post on Koontz over at Environmental Law Prof. If you haven't been following the case, Tim gives a clear outline of the dispute, explains what's at stake, and discusses the holding. His takeaway:
This morning, the U.S. Supreme Court issued a divided decision in Koontz v. St. John’s River Water Management District that expands Takings Clause protections for landowners. I raised the possibility last October that the case could serve as a vehicle for the Court to provide some sense of clarity to the field of takings jurisprudence that would benefit both landowners and government regulators alike, yet it appears on my first read of the 5-4 opinion that the Court has failed in this regard. Moreover, while the decision is undoubtedly a victory for proponents of a conception of property grounded in individual autonomy and control, there may be some silver lining for those who understand property as a socially contingent institution.
At Prawfsblawg, Rick Hills has a tour-de-force on the Supreme Court's decision in Koontz, handed down yesterday (here's a link to the opinion). The whole thing is worth reading, but the first paragraph alone is worth the price of admission:
Federal takings doctrine is the jurisprudential equivalent of a land war in Asia -- a quagmire from which any aggressive initial expedition will eventually have to extricate itself with patently phoney declaration that the mission was accomplished after being bogged down in the swamps and rice paddies of mushy doctrinal distinctions and sniped at by local government guerrillas too elusive to pin down in open battle. Every once in awhile, the SCOTUS attempts one of these invasions of subnational governments' land-use prerogatives, invariably to retreat in disarray when it discovers that (a) it does not understand the legal terrain and (b) its district court foot soldiers balk at getting involved in what Justice Sutherland once called the "tedious and minute detail" of land-use law's implementation. (Examples of such embarrassed retreats include Louisville & Nashville Ry. v. Barber Asphalt Paving (1906) and San Remo Hotel v. San Francisco (2005))
Tim Mulvaney summarizes the holding at Environemntal Law Prof Blog:
In an opinion authored by Justice Alito, a five-Justice majority declared that (1) the Nollan/Dolan test (which places the burden of proof on government defendants to prove land use permit conditions bear a nexus to and rough proportionality with development impacts) is applicable at the point in time when a condition is merely proposed, even if the permit ultimately is denied; and (2) the Nollan/Dolan test applies to conditions beyond those that require public occupation of private lands to include conditions that would require the applicant to fund offsite mitigation. Dissenting, Justice Kagan, joined by Justices Ginsburg, Breyer, and Sotomayor, disputed the majority’s latter conclusion as setting up a situation where lower courts will struggle to distinguish between takings and taxes.
Tuesday, June 25, 2013
Since everyone else is talking about the Affirmative Action case today, I thought I could chip in my two cents. Before going to law school I worked in the admissions office at Princeton University for two years. Here's a short piece I wrote about Affirmative Action based on that experience. The gist is that Affirmative Action is the least offensive thing that happens in a university admissions department; it affects fewer people than you think and (contra Justice Thomas) causes fewer harms.
Also, if any of you have high school aged kids, I'm more than happy to read their application essays.
Monday, June 24, 2013
From the New York Times:
Homeowners who have fallen behind on their mortgage payments should check their mail carefully in coming weeks. Lenders will be offering loan modifications without even being asked. Under a new Streamlined Modification Initiative announced by the Federal Housing Finance Agency, mortgage servicers must now offer borrowers who are 3 to 24 months delinquent a plan to help avoid foreclosure.
The elimination of paperwork coupled with a proactive approach should benefit borrowers, said Timothy M. Dwyer, the chief executive of Entitle Direct, a direct-to-consumer title insurance company. “All it takes is for the borrower to make that new payment and they’re in the trial period of the program,” he said. “It can’t be any more simple than that. There’s not even a requirement that you sign something, send it in and have it approved.”
Borrowers must make three monthly payments on time before the modification becomes permanent. The program applies to loans owned or guaranteed by Fannie Mae or Freddie Mac. The start date was to be July 1, but an agency spokesman said Fannie and Freddie had already begun the program. It expires Dec. 31, 2015.
William Fischel (Dartmouth - Econ) has posted Fiscal Zoning and Economists' Views of the Property Tax on SSRN. Here's the abstract:
Fiscal zoning is the practice of using local land-use regulation to preserve and possibly enhance the local property tax base. Economists agree that if localities can conduct "perfect zoning," which effectively makes all real estate development decisions subject to a review that balances its benefits and costs to the community, then the local property tax can be converted into a benefit tax and lacks the deadweight loss of taxation. This essay argues that American zoning is closer to this ideal than many other economists think. The practice is often difficult to detect because zoning serves several objectives besides fiscal prudence.