Monday, April 7, 2014
Christopher Serkin (Vanderbilt) has posted Passive Takings: The State's Affirmative Duty to Protect Property (Michigan Law Review) on SSRN. Here's the abstract:
As conventionally understood, regulatory takings doctrine protects property owners from the most significant costs of legal transitions. Legal change has therefore always been central to regulatory takings claims. This Article argues that it does not need to be, and that governments can violate the Takings Clause by failing to act in the face of a changing world. This is much more than a minor refinement of takings law because government liability for failing to act means that, in at least some circumstances, the Takings Clause imposes an affirmative obligation on the government to protect property. This liability runs counter to conventional understandings of constitutional law in which the Constitution enshrines primarily negative liberties. The Takings Clause, then, can serve as a previously unrecognized basis for affirmative government obligations. The Article ultimately illustrates this new category of passive takings with the example of sea level rise, arguing that ecological threats may compel the government to respond or else face takings liability.
Friday, April 4, 2014
Disaster, Destruction, and Resilient Cities Panel:
Andrea McArdle (CUNY) started off the morning with a discussion of the need for cities to anticipate the human costs of weather disasters, particularly as they impact vulnerable populations, by analyzing NYC's response to Hurricane Sandy. John Travis Marshall and Ryan Rowberry (both George State) presented and discussed a prototype strengths and weaknesses index for measuring a city's legal capacity to deal with disasters that, in turn, can be used for the post-disaster allocation of recovery resources. Lastly, Kellen Zale (Houston) analyzed the policy decisions facing cities when they choose to demolish municipally owned property and then presented an alternative approach to destruction that still builds on resiliency.
Social Aspects of Resilient Cities Panel:
Palma Strand (Creighton) discussed the idea of "civity" by exploring the city as a complex adaptive system, underpinned by larger social networks and legal frameworks. Melissa Berry (Missouri) introduced the idea of an urban land ethic that rests on a concept that cities are socio-ecological constructs wherein people and nature have a reciprocal ecological relationship.
Resiliency, Equity, and Economy Panel:
Chris Odinet (Southern) discussed the notion that truly resilient cities must exercise good judgment and prudence in the allocation of public resources in public-private partnerships so as to ensure a level playing field for private businesses and true market competition. Jeff Litwak (Columbia River Gorge Commission) discussed agreements between cross-border local governments and the issues created by their status as interstate compacts, including a call for cities to use interstate compacts as a tool for resiliency. Jonathan Rosenbloom (Drake) discussed the problems in funding resiliency, particularly through traditional bond financing, and suggested more efficient and progressive means of funding public resiliency infrastructure through public-private partnerships.
Resiliency and Planning for City Growth Panel:
Keith Hirokawa (Albany) stressed the importance of water resources and how a well provided for water infrastructure that allows for the successful delivery of eco-system services can be a critical tool in the long-term resiliency planning of cities. Tom Wuerzer (Boise State-Community Planning) and Tom Bergin (Blaine County Planning Department) closed out the symposium with a discussion of the issues facing cities related to wildfires and how resilient cities can be better prepared for wildfire disasters through effective mapping and building codes.
Lastly, excellent job to all the faculty and law review students of the University of Idaho College of Law for a tremendously successful event. Keep on the lookout for the symposium issue of the Idaho Law Review where the articles from the above presentations will appear.
Greetings, all. I'm here in beautiful downtown Boise blogging from the University of Idaho's symposium entitled Resilient Cities: Environment | Economy | Equity. There's an excellent line-up of speakers scheduled for today, all of whom teach or work in the area of property or real estate/urban development. You can watch the presentations via live streaming video by clicking here. The students of the Idaho Law Review will be monitoring the live chat function of the streaming video so you can also interact real-time with the symposium presenters.
Below is the schedule of events (courtesy of Stephen Miller over at the Land Use Prof Blog):
|8:00 – 8:30||Registration and Continental Breakfast
|8:30 – 9:00||Introduction and Welcome Symposium Introduction: Alexandra Grande; Tori Osler (ILR symposium student editors) Welcome: David Bieter (Mayor, City of Boise) Dean's Welcome: Michael Satz (Idaho)|
|9:00 – 10:30||
Disaster, Destruction, and Resilient Cities Moderator: Dale Goble (Idaho) Kellen Zale (University of Houston Law Center) – Urban Resiliency and the Right to Destroy John Travis Marshall and Ryan Rowberry(Georgia State) – Urban Wreckage and Resiliency: Articulating a Practical Framework for Preserving, Reconstructing, and Building Cities Andrea McArdle (CUNY) – Imagining A Resilient New York After Superstorm Sandy
|10:45 – 12:00||Social Aspects of Resilient Cities Moderator: Anastasia Telesetsky (Idaho) Palma Strand (Creighton) –Increasing City-System Resilience by Cultivating Civic Social Networks Melissa Berry (University of Missouri) –Thinking Like a City: Grounding Social-Ecological Resilience in an Urban Land Ethic|
|12:00 – 1:30||Lunch with Keynote Moderator: Barbara Cosens Ken Alex (California Governor’s Office of Planning and Research) – 20-30 minute presentation|
|1:30 – 1:45||Break|
|1:45 – 3:15||Resiliency, Equity, and Economy Moderator: Jerrold Long (Idaho) Christopher Odinet (Southern University Law Center) – Fairness, Equity, and a Level Playing Field: Land-use Goals for the Resilient City Jeff Litwak (Columbia River Gorge Commission) – Implementing Resiliency: Urban Services Without Borders Jon Rosenbloom (Drake) – Funding Resiliency|
|3:15 – 3:30||Break|
|3:30 – 5:00||Resiliency and Planning for City Growth Moderator: Stephen Miller (Idaho) Tom Bergin (Blaine County Land Use & Building Services) and Tom Wuerzer (Department of Community and Regional Planning Boise State University) – Fire Resilience Policy and Planning at the Wildland-Urban Interface: Impressions from Idaho Keith Hirokawa (Albany) – Planning for Scarcity: Enabling Resilient Urban Water Planning Through Eco System Services|
|5:00 – 5:15||Concluding Remarks|
|5:15 – 6:15||Reception|
Daniel Farber (Berkeley) has posted Property Rights and Climate Change on SSRN. Here's the abstract:
Climate change poses a challenge for maintaining the stable entitlements that are basic to property law. Yet property rights can also serve as aids to climate adaptation. This essay, which was initially delivered as the Wolf Family Lecture on the American Law at the University of Florida, explores both aspects of the property/climate-change relationship. The first part of the article discusses takings issues that may arise in connection with sea level rise. The second part of the article discusses the constructive role that transferrable development rights and the public trust doctrine could play in climate adaptation, including their role in limiting takings claims.
Wednesday, April 2, 2014
Large department stores have been a major part of the downtown real estate landscape in nearly all great American cities. The Journal Sentinel recently chronicled the growing decline of downtown department stores across parts of the U.S., even when publicly subsidized. It's easy to imagine how these large, vacant buildings will impact downtown development going forward if willing buyers or replacement tenants cannot quickly be found. You can read the story here.
Downtown department stores continue to disappear, even as cities subsidize them.
Just within the past three years, department store operators have announced downtown closings in Indianapolis, Minneapolis, St. Paul, St. Louis and Cincinnati — all Midwestern cities with metro populations comparable to or larger than the Milwaukee area. In all of those cities, the stores or their landlords have received millions of dollars in publicly financed loans, grants and ownership stakes over the past several years.
The Wolf Family Lecture Series is endowed by a gift from UF Law Professor Michael Allan Wolf, who holds the Richard E. Nelson Chair in Local Government Law, and his wife, Betty. Past scholars who have delivered the Wolf Family Lecture in the American Law of Real Property include Tom Merrill, Greg Alexander, Lee Fennel, Joe Singer, and Vicki Been.
This year, Daniel Farber of Berkeley spoke about his recent work on climate change:
He said if the government is allowed to place restrictions on what landowners can do with their property due to a changing coastline – such as restricting how close to build to the water or preventing the use of “hard-armoring” (sea wall) to protect their land – property values could plummet. On the other hand, if a sea-side cottage is swallowed by the ocean, is it the government’s fault for not stepping in or simply a bad investment?
One possible solution to ease the blow of losing land to the sea might be transferrable development rights – the owner may be given rights to develop in another part of the community.
[...] Farber pointed out that real property lawyers will be a big part of deciding just how these questions and concerns will be addressed. “I think real property lawyers are going to be involved in a lot of this stuff in a way that will change a little bit the nature of the practice,” Farber said. “There are going to be a lot of issues for clients to worry about, connecting to climate changes, there are going to be a lot of risks to worry about, there are going to be a lot of changes in land use planning.”
Eric Freyfogle (Illinois) has posted Property Law in a Time of Transformation: The Record of the United States (South African Law Journal) on SSRN. Here's the abstract:
Over the century-long period from just before the American Revolution until the end of the Civil War the United States underwent a profound transformation, beginning with its political break from Britain and expanding rapidly to embrace political and economic liberalism and elements of equality and social justice. Importantly, this transformation was aided by fundamental changes to the received English common law of property. Several property-law changes enhanced economic freedom and facilitated industrialization. Other legal changes diminished the power of landowners to dominate the poor socially and economically. Yet further reforms stabilized land tenure and expanded easy public access to natural resources, on private as well as public lands. Along the way, American courts embraced a more instrumental conception of law and carved out greater space for legislatures to regulate uses of property. Many of these changes involved substantial shifts of wealth, yet none was accompanied by significant compensation. In its transformation, South Africa is differently situated from the US of two centuries ago. Nonetheless, the American record may prove instructive, both in its particulars and as an example of how a developing nation, committed to private property and the rule of law, can nonetheless reform the legal elements of ownership without diminishing the institution’s stability and widespread benefits.
Tuesday, April 1, 2014
I'm delighted to announce that Chris Odinet (Southern) has agreed to guest blog here during the month of April. Chris is magna cum laude graduate of LSU and had a successful real estate practice at Phelps Dunbar before turning becoming a professor. His research interests focus on the intersection of traditional property law concepts with modern commercial and tax policies. Although 2013-14 is Chris's first year as a full-time academic, his work has already appeared in South Carolina Law Review, the Quinnipiac Law Review, the Louisiana Law Review, and the Idaho Law Review. Welcome Chris!
1. [189 downloads] An Overview of the Fannie and Freddie Conservatorship Litigation
David J. Reiss (Brooklyn)
2. [93 downloads] Foreclosure and the Failures of Formality, or Subprime Mortgage Conundrums and How to Fix Them
Joseph William Singer (Harvard)
3. [84 downloads] Property's Structural Pluralism: On Autonomy, the Rule of Law, and the Role of Blackstonian Ownership
Hanoch Dagan (Tel Aviv)
4. [83 downloads] Regulating Land Grabs: Third Party States, Social Activism and International Law
Lea Brilmayer (Yale) & William J. Moon (Yale)
5. [80 downloads] Property Claims Between Cuba and The United States. A Literature Review
Jesus V. Bu (Independent)
7. [66 downloads] Planting Houses in Shenzhen: A Real Estate Market Without Legal Titles
Shitong Qiao (Yale)
Monday, March 31, 2014
For those living in a cave, Bitcoin is the world's most popular digital currency. Transactions made with Bitcoins happens with no middlemen – meaning, no governments or banks. There are no fees and transactions can be completely anonymous. However, the IRS recently announced that it will treat Bitcoin as property, not a currency, for tax purposes:
The U.S. government will treat Bitcoin as property for tax purposes, applying rules it uses to govern stocks and barter transactions, the Internal Revenue Service said in its first substantive ruling on the issue.
Today’s IRS guidance will provide certainty for Bitcoin investors, along with income-tax liability that wasn’t specified before. Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of gross income for the coffee shop.
The IRS, faced with a choice of treating Bitcoins like currency or property, chose property. That decision could reduce the volume of transactions conducted with the virtual currency, said Pamir Gelenbe, a venture partner at Hummingbird Ventures, which invests in technology businesses.
“It’s challenging if you have to think about capital gains before you buy a cup of coffee,” he said.
Adena Rissman (Wisconsin), Jessica Owley (Buffalo), Barton Thompson (Stanford), and Rebecca Shaw (Environmental Defense Fund) have posted Adapting Conservation Easements to Climate Change (Conservation Letters) on SSRN. Here's the abstract:
Perpetual conservation easements (CEs) are popular for restricting development and land use, but their fixed terms create challenges for adaptation to climate change. The increasing pace of environmental and social change demands adaptive conservation instruments. To examine the adaptive potential of CEs, we surveyed 269 CEs and interviewed 73 conservation organization employees. While only 2% of CEs mentioned climate change, the majority of employees were concerned about climate change impacts. CEs share the fixed-boundary limits typical of protected areas with additional adaptation constraints due to permanent, partial property rights. CEs often have multiple, potentially conflicting purposes that protect against termination but complicate decisions about principled, conservation-oriented adaptation. Monitoring is critical for shaping adaptive responses, but only 35% of CEs allowed organizations to conduct ecological monitoring. Additionally, CEs provided few requirements or incentives for active stewardship of private lands. We found four primary options for changing land use restrictions: CE amendment, management plan revisions, approval of changes through discretionary consent, and updating laws or policies codified in the CE. Conservation organizations, funders, and the IRS should promote processes for principled adaptation in CE terms, provide more active stewardship of CE lands, and consider alternatives to the CE tool.
Friday, March 28, 2014
The NY Times has a big exposé on the pitfalls of reverse mortgages:
Ms. Santos, 61, along with a growing number of baby boomers, is confronting a bitter inheritance: The same loans that were supposed to help their elderly parents stay in their houses are now pushing their children out. “My dad had nothing when he came here from Cuba and worked so hard to buy this house,” Ms. Santos said, her voice quivering.
Similar scenes are being played out throughout an aging America, where the children of elderly borrowers are learning that their parents’ reverse mortgages are now threatening their own inheritances. Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes that need not be paid back until they move out or die, have long posed pitfalls for older borrowers.
Now many like Ms. Santos are discovering that reverse mortgages can also come up with a harsh sting for their heirs. Under federal rules, survivors are supposed to be offered the option to settle the loan for a percentage of the full amount. Instead, reverse mortgage companies are increasingly threatening to foreclose unless heirs pay the mortgages in full, according to interviews with more than four dozen housing counselors, state regulators and 25 families whose elderly parents took out reverse mortgages.
Darien Shanske (UC Davis) has posted Revitalizing Local Political Economy Through Modernizing the Property Tax (Tax Law Rev) on SSRN. Here's the abstract:
As the Great Recession dramatically illustrated, state and local governments need a more stable revenue source. Accordingly, states and localities as diverse as Texas and San Francisco, are experimenting with new kinds of taxes. However, there has been essentially no experimentation with the oldest and most traditional local tax, namely the tax on real property.
This blindness to the property tax is unfortunate for many reasons, including that the property tax is both relatively efficient and stable compared to the other taxes available to states and localities. Of course, it is possible that the property tax has been ignored because, despite its merits, it has structural weaknesses that cannot be reformed. For instance, property tax liability is based on the value of the property and not on the income of the owner, which means that property taxes can impose great burdens on taxpayers on a fixed income. Furthermore, property taxes are typically collected once or twice a year, which imposes a significant obligation on taxpayers to budget correctly.
Yet there is no reason that the property tax needs to continue to be collected in much the same way as it was in the nineteenth century. Property taxes could be withheld from income just like income taxes, thereby making them easier to budget for. Furthermore withholding the property tax as part of a larger income tax system allows for the property tax to respond effectively to the cogent concern that taxpayers may not always have the income in a given year to pay their property taxes. Since the property tax and income tax systems would be integrated under my reform proposal, property tax liability could also be deferred (and perhaps forgiven) when the property tax liability grows to be too high as a percentage of income. Such a regime of incorporating income tax elements into the property tax would allow local taxpayers to respond directly to the relative merits of proposed public projects and services without concern for insuring themselves against future liquidity problems.
Thursday, March 27, 2014
Sarah Schindler (Maine) has posted Unpermitted Urban Agriculture: Transgressive Actions, Changing Norms, and the Local Food Movement (Wisconsin Law Review) on SSRN. Here's the abstract:
It is becoming more common in many urban and suburban areas to see chickens in backyards, vegetable gardens growing on vacant, forclosed-upon, bank-owned property, and pop-up restaurants operating out of retail or industrial spaces. The common thread tying all of these actions together is that they are unauthorized; they are being undertaken in violation of existing laws, and often norms. In this essay, I explore ideas surrounding the overlap between food policy and land use law, and specifically the transgressive actions that people living in urban and suburban communities are undertaking in order to further their local food-related goals. I assert that while governmental and societal acceptance and normalization of currently illegal local food actions is likely needed for the broader goals of the local food movement to succeed, there are some limited benefits to the currently unauthorized nature of these activities. These include transgression serving as a catalyst for change and as an enticement to participate.
Wednesday, March 26, 2014
The New York Times endorses (with a few caveats) China's plan to increase the number of its people living in cities by 2020:
the government has ordered up yet another migration that, it says, will further economic growth. The plan calls for expanding existing cities and for creating new towns and the housing, roads, rail lines and other public amenities that go with them. Addressing the frequent criticism that many new buildings are constructed poorly, the government has even promised to improve building standards as part of its plan. The overall goal is to increase the number of people living in cities to 60 percent by 2020.
But there are problems that the new plan hasn’t adequately addressed. One is the fact that local governments exercise great, even decisive, power over the lives of ordinary Chinese, requiring a hukou, or urban registration, of anyone who wants access to health, education and other public services. Just 36 percent of Chinese have a city hukou now, and rural migrants often find themselves denied services.
[...] Another set of problems has to do with farmers and their land. Because the Chinese government owns all the land, rural residents have only the right to use the plots that they farm and cannot easily sell or transfer those rights to other people. That keeps many farmers tied to their land. The government should make it easier for farmers to buy and sell usage rights in a transparent market.
Alexandra Klass (Minnesota) & Danielle Meinhardt (Minnesota) have posted Transporting Oil and Gas: U.S. Infrastructure Challenges (Iowa Law Review) on SSRN. Here's the abstract:
This article explores the history and geography of oil and natural gas to help explain why the U.S. physical and regulatory infrastructure for transporting these two similar types of energy resources to markets developed so differently. Notably, while interstate natural gas pipelines are reviewed and permitted at the federal level by the Federal Energy Regulatory Commission (FERC), interstate oil pipelines are reviewed and permitted almost exclusively at the state level. These regulatory differences, along with differences in the physical properties of the two energy resources, have resulted in very different energy transportation infrastructures and concerns for each resource. This inquiry is critical in light of the complete transformation of the U.S. energy economy over the past five years. Starting in 2009, hydraulic fracturing and horizontal drilling have allowed massive development of oil and natural gas in parts of the country that were not major oil and gas producers, and on a scale that could not have been contemplated less than a decade ago. This article concludes that the regulatory siting regime for oil pipelines at the state level and for natural gas pipelines at the federal level are generally both sufficient in their respective arenas to facilitate construction of new oil and gas pipelines when market forces allow. What is lacking however, are sufficient regulations or economic incentives under state or federal environmental laws to ensure that necessary natural gas transportation infrastructure is built in oil rich areas like North Dakota to capture the natural gas produced with oil. In the absence of such incentives, producers flare large amounts of natural gas into the atmosphere because of its relatively lower market value as compared to oil and the absence of gathering pipelines or other localized collection systems in producing areas. Likewise, the lack of oil transportation infrastructure in new producing areas has resulted in two-thirds of the oil produced in those regions traveling by rail instead of by pipeline, up from zero only a few years ago. This has resulted in high profile rail accidents leading to numerous deaths, explosions, and evacuations of towns. This article makes several proposals that draw on the complex history of transporting oil and gas in order to create a transportation infrastructure for the future that matches the realities of today’s new production technologies and geographies.
Tuesday, March 25, 2014
It's no secret that a lot of people try to solve their legal problems with (free) Google searches rather than with (expensive) attorneys. Sometimes this works fine, but sometimes the internet makes mistakes. For example, in the property arena, laymen often turn to Google to figure out how to avoid the adverse possession of their land. The men and women who respond to these inquiries often get the law wrong or fail to understand the diversity of state rules. Most commonly, the experts state that a landowner can prevent adverse possession by sending a certified letter that grants the trespassers' permission to stay on the land for a limited time. The thinking behind this advice is that such a letter will defeat any claim that the trespassers' possession is hostile (one of the standard requirements for adverse possession).
Benny Kass who writes a real estate column for the Chicago Tribune (and who I generally really like) provides a recent example of this advice:
You have asked what to do to protect yourself. First, perhaps your neighbors would like to buy that plot of land. If not, I would send them a nice letter telling them that you are aware their property is encroaching on yours, but that you are giving them permission to use it. Such permission will cancel any claim of hostility. If you want to keep peace with your neighbors, however, I would first invite them over for a drink and explain that you will send them a letter about the property.
The problem is that this just isn't the law in a lot of places. Sending a letter, without more, doesn't stop the statute of limitations from running. The Court of Appeals of Kansas does the heavy lifting for me:
Although no other Kansas case directly addresses the issue, other states have examined the effect of letters on the statute of limitations for adverse possession. In one Connecticut case, Woycik v. Woycik, 13 Conn.App. 518, 537 A.2d 541 (1988), the true owners' attorney sent a demand letter to the adverse possessors and requested that a metal shed be removed from the disputed property. The appellate court there equated a demand letter with oral notice, especially given that the act of sending a letter did not allow the true owner to interrupt the adverse possessors' control of the land. 13 Conn.App. at 525–26. Similarly, in Oklahoma, the trustee of the trust that owned the disputed land wrote a letter to the adverse possessors and assured them “that he ‘intend[ed] to preserve his interest in the property and [would] vigorously defend’ “ against suits related to the land. Flagg v. Faudree, 269 P.3d 45, 50 (Okla.Civ.App.2011). Aside from the letter, however, the trustee never acted to oust the adverse possessors. The Oklahoma Court of Civil Appeals found that “a letter notifying the occupant that title is held by someone else is insufficient to interrupt adverse possession.” 269 P.3d at 50.
(Yan Wang v. Reece, 2013 WL 6726148) The Kansas court goes on to agree that "demand letters alone are insufficient to toll the statute of limitations." Lawyers 1, Internet 0.
David Reiss (Brooklyn) has posted An Overview of the Fannie and Freddie Conservatorship Litigation (J. of Law & Business) on SSRN. Here's the abstract:
The fate of Fannie Mae and Freddie Mac are subject to the vagaries of politics, regulation, public opinion, the economy, and not least of all the numerous cases that have been filed in 2013 against various government entities arising from the placement of the two companies into conservatorship. This short article will provide an overview of the last of these. The litigation surrounding Fannie and Freddie’s conservatorship raises all sorts of issues about the federal government’s involvement in housing finance. These issues are worth setting forth as the proper role of these two companies in the housing finance system is still very much up in the air. The plaintiffs, in the main, argue that the federal government has breached its duties to preferred shareholders, common shareholders, and potential beneficiaries of a housing trust fund authorized by the same statute that authorized their conservatorships. At this early stage, it appears that the plaintiffs have a tough row to hoe.
Monday, March 24, 2014
Bloomberg chronicles the budding property empire of Amancio Ortega, the founder of Zara retail stores:
Amancio Ortega Gaona, already the world’s fourth-richest person based on the success of his Zara fashion retail stores, has quietly amassed a real estate empire worth as much as $10 billion and is emerging as a formidable competitor for prime properties from London to Beverly Hills.
Relying on all-cash offers, he has outbid the world’s biggest institutional funds and professional property investors, such as Tishman Speyer Properties LP.
[...] Ortega’s personal real estate portfolio may be closing the gap with Donald Bren, chairman of Irvine Co. of southern California, often cited as the world’s wealthiest real estate investor. Bren’s properties are worth $14.4 billion, according to the Bloomberg Billionaires Index.
[...] At least two of Ortega’s London properties are owned through Luxembourg entities, which he inherited from the previous owners, records show. Using subsidiaries in Luxembourg, which has lenient capital gains tax rules, is a common tactic among investors.
Inditex also uses tax-haven subsidiaries. As reported by Bloomberg News in February, the retailer has shifted $2 billion of profits into a low-tax unit in the Netherlands and Switzerland, helping cut its income tax bill around the world.
(HT: Tax Prof)