Tuesday, August 16, 2016

Meier on the Rule of Capture

MeierLuke Meier (Baylor) recently posted Teaching Pierson v. Post on SSRN. Here's an excerpt:

I have now taught Pierson thirteen times. I love the case. (My former students would confirm this statement.) After experimenting with different ways of teaching Pierson, I have developed a unique approach that (I believe) accomplishes many of my pedagogical objectives for the first week of class. The students also seem to enjoy it. This article explains my approach to teaching Pierson v. Post.

August 16, 2016 in Recent Scholarship | Permalink | Comments (0)

Monday, August 15, 2016

Posner & Weyl on Private Property and Resource Allocation

Eric Posner (Chicago) and E. Glen Weyl (Yale/Microsoft) posted Property is Another Name for Monopoly Facilitating Efficient Bargaining with Partial Common Ownership of Spectrum, Corporations, and Land on SSRN. Here's the abstract:

The existing system of private property interferes with allocative efficiency by giving owners the power to hold out for excessive prices. We propose a remedy in the form of a tax on property, based on the value self-assessed by its owner at intervals, along with a requirement that the owner sell the property to any third party willing to pay a price equal to the self-assessed value. The tax rate would reflect a tradeoff between gains from allocative efficiency and losses to investment efficiency, and would increase in line with expected developments in information technology. The legal and economic implications of this system are explored.

 

August 15, 2016 in Recent Scholarship | Permalink | Comments (0)

Monday, August 8, 2016

Registration Open: State & Local Government Law Works-in-Progress Conference

Houston

The University of Houston Law Center will be hosting the 5th Annual State & Local Government Law Works-in-Progress Conference on Friday, October 7, 2016 and Saturday, October 8, 2016.  Scholars and practitioners writing in areas related to state and local government law are invited to attend and/or present works in progress. Participants can register and obtain hotel information here.

Please register for the conference by September 9, 2016.  Participants will have the option of either presenting a full draft or an early work-in-progress/abstract.  Drafts/abstracts will be due September 26, 2015.  Questions should be directed to Kellen Zale at kbzale@central.uh.edu.

August 8, 2016 in Conferences | Permalink | Comments (0)

Friday, August 5, 2016

Hiring Announcement: California Western School of Law seeks 2-3 tenure-track faculty members

Cal_western

This just in from from Laura M. Padilla at California Western for anyone on the market this year in property law:

Do you value diversity? At California Western School of Law, we pride ourselves on the diversity of our student body.  This year, around 50% of our incoming students are from diverse cultural and ethnic backgrounds.  We are committed to having a faculty that reflects our student body and our community.  

Do you want to influence legal education at an established but innovative law school?  California Western recently celebrated its 90th anniversary - but we have never been stale or ordinary.  We were on the forefront of innovative, experiential education three decades ago.  As a result, our graduates have a reputation for being uniquely practice-ready.  California Western continues to rethink the status quo in legal education – balancing a rigorous practical education with cutting edge scholarship and community service.  

Who are you?  We are seeking candidates with an entrepreneurial spirit who are eager to put their own stamp on a law school with an expanding faculty and many growth opportunities.

What do you want to teach?  We can prioritize your teaching preferences regardless of subject matter. 

Where do you want to live?  California Western is in downtown San Diego, California, literally overlooking the Pacific Ocean.  A city of breathtaking beauty, we have perfect weather, miles of beaches, and nearby mountains.  We are a family-friendly, diverse city with small city traffic and walkable neighborhoods. 

If you are excited about teaching a diverse student body, shaping the next iteration of an innovative and successful law school, and living in “America’s Finest City,” we want to hear from you.

Candidates should email their materials by September 30, 2016 to Professor Ken Klein at kklein@cwsl.edu.  Candidates are encouraged to submit a statement to our Appointments Committee addressing how they can contribute to the goal of creating a diverse faculty. 

August 5, 2016 in Law Schools, Teaching | Permalink | Comments (0)

Tuesday, August 2, 2016

DNC Party Platform on Housing/Property Law

DNC
(Photo Credit: BizBash)

Now it's time to dive into the 2016 Democratic Party Platform. Here’s what the Democrats have to say about housing and property law:

Expanding Access to Affordable Housing and Homeownership

Whereas the Republican Presidential nominee rooted for the housing crisis, Democrats will continue to fight for those families who suffered the loss of their homes. We will help those who are working toward a path of financial stability and will put sustainable home ownership into the reach of more families. Democrats will also combat the affordable housing crisis and skyrocketing rents in many parts of the country, which is leading too many families and workers to be pushed out of communities where they work.

We will preserve and increase the supply of affordable rental housing by expanding incentives to ease local barriers to building new affordable rental housing developments in areas of economic opportunity. We will substantially increase funding for the National Housing Trust Fund to construct, preserve, and rehabilitate millions of affordable housing rental units. Not only will this help address the affordable housing crisis, it will also create millions of good-paying jobs in the process. Democrats believe that we should provide more federal resources to the people struggling most with unaffordable housing: low-income families, people with disabilities, veterans, and the elderly. 

We will expand efforts to address the lingering effects of the foreclosure crisis through programs like the federal Neighborhood Stabilization Program. We will also expand programs to prevent displacement of existing residents, especially in communities of color; create affordable and workforce housing; and preserve neighborhood-serving nonprofit organizations and small businesses. We will reinvigorate housing production programs, repair public housing, and increase funding for the housing choice voucher program and other rental assistance programs. And we will fight for robust funding to end homelessness in our cities and counties once and for all, through targeted investments to provide the necessary outreach, social services, and housing options for all populations experiencing homelessness. We will engage in a stronger, more coordinated, and better funded partnership among federal, state, and local governments to end chronic homelessness for millions of Americans. We will build on and expand President Obama's promising initiatives to end veteran and family homelessness in our country.

We must make sure that everyone has a fair shot at homeownership. We will keep the housing market robust and inclusive by supporting more first-time homebuyers and putting more Americans into the financial position to become sustainable homeowners; preserving the 30-year fixed rate mortgage; modernizing credit scoring; clarifying lending rules; expanding access to housing counseling; defending and strengthening the Fair Housing Act; and ensuring that regulators have the clear direction, resources, and authority to enforce those rules effectively. We will prevent predatory lending by defending the Consumer Financial Protection Bureau (CFPB). These steps are especially important because over the next decade most new households will be formed by families in communities of color, which typically have less generational wealth and fewer resources to put towards a down payment.

Guaranteeing Lesbian, Gay, Bisexual, and Transgender Rights

***We will also fight for comprehensive federal non- discrimination protections for all LGBT Americans, to guarantee equal rights in areas such as housing, employment, public accommodations, credit, jury service, education, and federal funding.

Ending Poverty and Investing in Communities Left Behind

***We will expand and make permanent the New Markets Tax Credit. We will improve safety by repairing crumbling infrastructure in communities that need it most as well as on tribal lands. And we will make investments in affordable housing near good jobs and good schools.

Building Strong Cities and Metro Areas

***We will provide resources to help overcome blight, expand Community Development Block Grant funds, provide more housing support to high-poverty communities, and build more affordable rental housing units.

Honoring Indigenous Tribal Nations

***We will strengthen the operation of tribal housing programs, and reauthorize the Indian Housing Block Grant Program. We will increase affordable and safe housing and fight to significantly reduce homelessness on and off Indian reservations, especially among Native youth and veterans.

Pursuing Our Innovation Agenda: Science, Research, Education, and Technology

Democrats value American innovation and believe it is one of our country’s great strengths. We will protect the intellectual property rights of artists, creators, and inventors at home and abroad. The entire nation prospers when we promote the unique and original artistic and cultural contributions of the women and men who create and preserve our nation’s heritage.

Democrats will fight against unfair theft of intellectual property and trade secrets. We will increase access to global markets for American intellectual property and other digital trade by opposing quotas, discriminatory measures, and data localization requirements.

Now let me make a few general comments and observations. First, the affordable housing plank talks about combatting “the affordable housing crisis and skyrocketing rents in many parts of the country.” I wonder if this means rent control legislation. How would they suggest we push back against rising rents? No doubt this is a huge problem, but some additional specifics would have been useful.

As to increasing the affordable housing stock, the platform says the party wants to “substantially increase funding for the National Housing Trust Fund to construct, preserve, and rehabilitate millions of affordable housing rental units.” Obviously this means more federal spending on housing, but what else? I noticed that a lot of the housing/property policy positions (more below) are about increasing funding. That's great but does that mean new spending or does that mean cut-backs in other housing (or non-housing) programs?

Also, regarding the goal of addressing “the lingering effects of the foreclosure crisis” I was curious to get more specifics. The HAMP program was pretty unsuccessful in refinancing the debt of many underwater American homeowners. Most people lost their homes in the wake of the crisis (when Democrats were in control of the White House and both houses of Congress), so what new programs would be offered? And…isn’t it a little too late?

The party also says it wants to “make sure that everyone has a fair shot at homeownership” but is short on details. The platform talks about “preserving the 30-year fixed rate mortgage” (is anyone suggesting that it’s going away?) and “putting more Americans into the financial position to become sustainable homeowners.” Credit is still tight since the crisis – and black and Hispanic borrowers are really feeling the credit squeeze. I would have liked to know more about how the party would reconcile the desire to provide access to credit with the need for mortgage lenders to utilize prescribed underwriting criteria. Also, noticeably absent from this discussion is anything about the future of Fannie Mae and Freddie Mac. How can anyone talk about housing finance and homeownership and not discuss the GSEs and their perpetual conservatorship? This is a noticeable absence from the party’s platform paper (and a real weakness in my view).

Also, it appears that we can look for gender identify and sexual orientation to be added to the Civil Rights Act and related federal statutes, as the party says they will “fight for comprehensive federal non- discrimination protections for all LGBT Americans.” This will, of course, include housing discrimination.

In the "Ending Poverty" section I found it somewhat strange (although perhaps it was implied) that although there was mention of expanding the New Market Tax Credit program (which is geared toward creating or expanding business opportunities in low-income communities) there was no mention of the federal housing tax credit program (LIHTC). I suppose the statement about making “investments in affordable housing” might arguably include that program, but if you’re going to mention one tax credit program by name why not mention the other if you’re talking about affordable housing.

When it comes to building/rebuilding communities, the platform says the party will "provide resources to help overcome blight, expand Community Development Block Grant funds, provide more housing support to high-poverty communities, and build more affordable rental housing units."Again, this is a little light on details and heavy on aspirations. The most substance here is that funding will increase. Perhaps the “build more affordable rental housing units” is meant to capture the Low-Income Housing Tax Credit program’s expansion? Will CDBG be made more flexible in terms of how it can be spent?

Lastly, the most substantive comments in the intellectual property rights section have to do with “opposing quotas, discriminatory measures, and data localization requirements.” As I mentioned in the RNC post, I would have liked to have seen more discussion of the digital economy here and the emerging challenging that those markets and innovations present.

As a final note, another item that featured prominently in the RNC's platform, but was completely absent from the DNC's, was any talk about eminent domain/the Takings Clause. In other words, discussion of the sanctity of property rights was not a main focus here (although I think you could say that, taken together, the property/housing platform for the DNC broadly includes that notion).

Please share your thoughts in the comments below!

August 2, 2016 | Permalink | Comments (0)

Saturday, July 30, 2016

RNC Party Platform on Housing/Property Law

RNC
(Photo Credit: Engine Blog)

With both of the conventions over, now is a good time to take a look at what the parties have to say about property law and housing policy. Notably, affordable housing has been largely left out of the big policy discussions from both the Clinton and the Trump camps. So, who knows how significant these policy prescriptions (such as they are) will be as we move into the general.

First up for today are the property/housing items from the 2016 Republican Party Platform:

Responsible Homeownership and Rental Opportunities

Homeownership expands personal liberty, builds communities, and helps Americans create wealth. “The American Dream” is not a stale slogan. It is the lived reality that expresses the aspirations of all our people. It means a decent place to live, a safe place to raise kids, a welcoming place to retire. It bespeaks the quiet pride of those who work hard to shelter their family and, in the process, create caring neighborhoods.

The Great Recession devastated the housing market. U.S. taxpayers paid billions to rescue Freddie Mac and Fannie Mae, the latter managed and controlled by senior officials from the Carter and Clinton Administrations, and to cover the losses of the poorly-managed Federal Housing Administration. Millions lost their homes, millions more lost value in their homes.

More than six million households had to move from homeownership to renting. Rental costs escalated so that today nearly 12 million families spend more than 50 percent of their incomes just on rent. The national homeownership rate has sharply fallen and the rate for minority households and young adults has plummeted. So many remain unemployed or underemployed, and for the lucky ones with jobs, rising rents make it harder to save for a mortgage.

There is a growing sense that our national standard of living will never be as high as it was in the past. We understand that pessimism but do not share it, for we believe that sound public policies can restore growth to our economy, vigor to the housing market, and hope to those who are now on the margins of prosperity.

Our goal is to advance responsible homeownership while guarding against the abuses that led to the housing collapse. We must scale back the federal role in the housing market, promote responsibility on the part of borrowers and lenders, and avoid future taxpayer bailouts. Reforms should provide clear and prudent underwriting standards and guidelines on predatory lending and acceptable lending practices. Compliance with regulatory standards should constitute a legal safe harbor to guard against opportunistic litigation by trial lawyers.

We call for a comprehensive review of federal regulations, especially those dealing with the environment, that make it harder and more costly for Americans to rent, buy, or sell homes.

For nine years, Fannie Mae and Freddie Mac have been in conservatorship and the current Administration and Democrats have prevented any effort to reform them. Their corrupt business model lets shareholders and executives reap huge profits while the taxpayers cover all loses. The utility of both agencies should be reconsidered as a Republican administration clears away the jumble of subsidies and controls that complicate and distort home-buying.

The Federal Housing Administration, which provides taxpayer-backed guarantees in the mortgage market, should no longer support high- income individuals, and the public should not be financially exposed by risks taken by FHA officials. We will end the government mandates that required Fannie Mae, Freddie Mac, and federally-insured banks to satisfy lending quotas to specific groups. Discrimination should have no place in the mortgage industry.

Zoning decisions have always been, and must remain, under local control. The current Administration is trying to seize control of the zoning process through its Affirmatively Furthering Fair Housing regulation. It threatens to undermine zoning laws in order to socially engineer every community in the country. While the federal government has a legitimate role in enforcing non-discrimination laws, this regulation has nothing to do with proven or alleged discrimination and everything to do with hostility to the self-government of citizens.

The Fifth Amendment: Protecting Private Property

The Framers of our government knew, from history and experience, that when private property is not secure, freedom is at risk. That is why the Fifth Amendment declares that private property may not be “taken for public use without just compensation.” The Supreme Court’s Kelo decision undermined this safeguard by allowing local governments to seize a person’s home or land not only for vital public use, but also for “public purpose,” which thus allowed the government to seize it for transfer to private developers or other private entities. We call on any state legislatures that have not already done so to nullify the impact of Kelo within their jurisdiction by legislation or state constitutional amendments declaring that private property may be taken only for true public use, and we join House Republicans in supporting the Private Property Rights Protection Act.

The government at every level must always pay just compensation whenever it takes private property to achieve a compelling public use, with the money coming from the budget of the agency performing the taking. This includes the taking of water rights and the taking of property by environmental regulations that destroy or diminish the property’s value.

Civil asset forfeiture was originally intended as a way to cripple organized crime through the seizure of property used in a criminal enterprise. Regrettably, it has become a tool for unscrupulous law enforcement officials, acting without due process, to profit by destroying the livelihood of innocent individuals, many of whom never recover the lawful assets taken from them. When the rights of the innocent can be so easily violated, no one’s rights are safe. We call on Congress and state legislatures to enact reforms to protect law-abiding citizens against abusive asset forfeiture tactics.

The Fifth Amendment: Intellectual Property Rights

Private property includes not only physical property such as lands and homes, but also intellectual property like books and patents. Article 1, section 8 of the Constitution gives Congress the power to safeguard intellectual property rights for “Authors and Inventors.” By protecting the proprietary rights of creators and innovators, the Constitution promotes the general welfare by providing incentives for investment in all sorts of technology and artistic works. Intellectual property is a driving force in today’s global economy of constant innovation. It is the wellspring of American economic growth and job creation. With the rise of the digital economy, it has become even more critical that we protect intellectual property rights and preserve freedom of contract rather than create regulatory barriers to creativity, growth, and innovation.

Protecting intellectual property is also a national security issue. We must guard against counterfeit parts that can compromise the reliability of our weapons systems and the safety of military personnel. Today, the worst offenses against intellectual property rights come from abroad, especially in China. We call for strong action by Congress and a new Republican president to enforce intellectual property laws against all infringers, whether foreign or domestic.

A couple of thoughts: The platform promotes "clear and prudent underwriting standards and guidelines on predatory lending and acceptable lending practices." Assumedly this means that the Dodd-Frank Act's "ability-to-repay" mandatory analysis is not what the RNC is aiming for here, but I'm curious to know what would replace it? Do they mean mandatory underwriting (i.e., imposed by law) or do they mean industry self-regulated standards? They also note that "compliance with regulatory standards should constitute a legal safe harbor to guard against opportunistic litigation by trial lawyers." The "qualified mortgage" rule is  a safe-harbor that insulates mortgage lenders from predatory lending suits related to proper underwriting, so is that what the party is talking about (if so, then it already exists) or do they mean something different?

Also, the platform states that "For nine years, Fannie Mae and Freddie Mac have been in conservatorship and the current Administration and Democrats have prevented any effort to reform them." This is pretty much false all the way around. The Housing and Economic Recovery Act of 2008—which put Fannie and Freddie into conservatorship—was signed by President George W. Bush back in July 2008. The entire effort was lead and supported by his treasury secretary, Henry Paulson. So this was hardly the work of Democrats. Indeed, it was entirely bipartisan. And the fact that the conservatorship hasn't ended yet is also a bipartisan problem. Members of Congress from both parties have tried (i.e., the Corker-Warner Bill, the Johnson-Crapo Bill) but failed to get any traction for their proposals. 

As to zoning, the platform criticizes the Affirmatively Furthering Fair Housing regulations as being merely a way to socially engineer a community and a form of "hostility to the self-government of citizens." There may be reasons to criticize the AFFH rule, but I wish there would have been  more here about what the RNC thinks should be done about the very real problem of housing discrimination in this country.

The platform also seems to take a muscular view toward Takings Law by emphasizing the need to pay just compensation when property is taken (with a focus on environmental regulation and water rights). Whether this leads to any real pull back on federal takings seems unlikely. 

Lastly, there's some mention about the emergence of the digital economy and the need to protect IP rights, but nothing more than that. It mostly appears to be centered on cyber-security.  There are some bigger issues dealing with online commerce that could use some treatment (i.e., how to deal with the rise of virtual assets, the growth of online lending, possibilities with trustless public ledgers etc.).

Next week I'll post the 2016 Democratic Party Platform and share some musings on that as well. Would love to hear your thoughts on the RNC's platform in the comments section below. Have a good weekend!

July 30, 2016 | Permalink | Comments (0)

Thursday, July 21, 2016

Weiss on Housing Tax Credits and Residual Value

Website PictureBrandon M. Weiss (UMKC) has posted Residual Value Capture in Subsidized Housing (Harvard Law & Policy Review) on SSRN. Here's the abstract:

This Article argues that our primary federal subsidized housing production program, the Low-Income Housing Tax Credit (LIHTC), will result in the unnecessary forfeit of billions of dollars of government investment and the potential displacement of tens of thousands of households beginning in 2020 when LIHTC property use restrictions start to expire. The LIHTC example is presented as a case study of an inherent dynamic of public-private partnerships—namely, the potential capture by for-profit providers of “residual value.” For purposes of this Article, this is value generated by a public-private transaction that is unnecessary to incentivize a private provider to deliver the contracted for good or service. 

Drawing on corporate organizational theory, which has highlighted the role that nonprofits play in solving certain contract failures and generating positive externalities, the Article argues that, in certain contexts, partnering with nonprofit providers can be an effective approach to increasing the share of residual value that flows to public purposes. The LIHTC program is one such context, given that a nonprofit preference results in a three-sector approach whereby the federal government provides tax credits to nonprofit developers that must attract private investor equity. This framework leverages institutional strengths, including the access to capital of government, the relative fidelity to public purposes of nonprofits, and the market-based underwriting and oversight of for-profit investors.

July 21, 2016 in Home and Housing, Real Estate Transactions, Recent Scholarship | Permalink | Comments (0)

Wednesday, July 20, 2016

CFP: "Property in the City" Conference at the University of British Columbia

Allard_hall

Douglas Harris over at the the Peter A. Allard School of Law at the University of British Columbia passes along the following call for papers. The conference will take place March 3-7, 2014 in Vancouver. Cribbing from the announcement:

In The Great Transformation (1944) Karl Polanyi argued that economies were not separate and apart from larger social forces, but embedded within them. The project of nineteenth century economic liberalism, he continued, was to strip the influence and constraints of those larger social forces from markets, something he viewed as utopian in its pursuit of the unachievable ideal of free markets, and dangerous to the extent that it succeeded because unfettered markets would destroy society. Nonetheless, Polanyi considered the dis-embedded market to have been at least partially achieved in the industrializing economies of northern Europe in the nineteenth century, and the reconstruction of land as a commodity that might be “freely” bought and sold was among his primary exhibits.

In this workshop, we turn Polanyi’s metaphor of embeddedness towards property relations and the city. In doing so, we intend to consider the processes by which property, including intellectual property, is embedded and dis-embedded in its urban location. We are particularly interested in the role of law, including but not limited to property law, in the processes that embed and dis-embed property in urban ecosystems, economies, communities, and polities. This workshop is not intended only as a conversation with Polanyi’s work, but we hope the metaphors of embeddedness and dis-embeddedness will help animate the papers and the discussion of property as we grapple with its urban location as well as questions about its conceptual salience, the justifications for various forms of property, and the inequality of its distribution.

Submit paper proposals of up to 500 words to property_city@allard.ubc.ca by October 1st, 2016. Authors will be informed by November 1st, 2016, about acceptance. Confirmed workshop presenters will be expected to submit papers in draft form by February 17th, 2017, for circulation to the other participants.

A selection of papers may be chosen for publication in a special issue of a scholarly journal. We ask that you indicate your interest in publication with the special issue in the paper proposal. There is no registration fee for paper presenters. We may be able to provide out of town presenters with assistance in accommodation.

If you have any questions, please contact Douglas Harris (harris@allard.ubc.ca) or Graham Reynolds (reynolds@allard.ubc.ca).

Financial support has been provided by The Peter A. Allard School of Law and the Franklin Lew Innovation Fund.

July 20, 2016 | Permalink | Comments (0)

Tuesday, July 19, 2016

Registration Open for the Central States Law Schools Association Conference

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Registration is now open for the Central States Law Schools Association 2016 Scholarship Conference, which will be held on Friday, September 23 and Saturday, September 24 at the University of North Dakota School of Law in Grand Forks, ND. We invite law faculty from across the country to submit proposals to present papers or works in progress.
 
CSLSA is an organization of law schools dedicated to providing a forum for conversation and collaboration among law school academics. The CSLSA Annual Conference is an opportunity for legal scholars, especially more junior scholars, to present on any law-related topic in a relaxed and supportive setting where junior and senior scholars from various disciplines are available to comment. More mature scholars have an opportunity to test new ideas in a less formal setting than is generally available for their work. Scholars from member and nonmember schools are invited to attend. 

Please click here to register. The deadline for registration is September 2, 2016.  

Hotel rooms are now available for pre-booking. The conference hotel is the Hilton Garden Inn in Grand Forks. The hotel phone number is (701) 775-6000. When booking, identify yourself as part of the “UND School of Law” block to receive a daily rate of $89. Please note that conference participants are responsible for all of their own travel expenses including hotel accommodations.

For more information about CSLSA and the 2016 Annual Conference please subscribe to our blog.
           
We look forward to seeing you in Grand Forks!

Sincerely,

The 2016 CSLSA Board
For more information about CSLSA, visit our website at http://cslsa.us/ or contact a board member.

July 19, 2016 | Permalink | Comments (0)

Monday, July 18, 2016

Brown and Merriam on Takings Claims and Lucas

Carol Necole Brown (Richmond) and Dwight H. Merriam (Robinson+Cole LLP) have posted On the Twenty-Fifth Anniversary of Lucas: Making or Breaking the Takings Claims (Iowa Law Review) on SSRN. Here's the abstract" 

In Lucas v. South Carolina Coastal Council, the United States Supreme Court established the premier categorical regulatory takings standard with certain limited exceptions. The Lucas rule establishes that private property owners are entitled to compensation for a taking under the Fifth Amendment Takings Clause when a government regulation “denies all economically beneficial or productive use of land.” Today, Lucas remains the controlling law on categorical regulatory takings. But in application, how much does Lucas still matter?  

My review of more than 1,600 cases in state and federal court reveals only twenty-seven cases in twenty-five years in which courts found a categorical regulatory taking under Lucas. By percentage, that works out to a Lucas claim success rate of just 1.6 percent. This does not mean Lucas is unimportant, however. Rather, the paucity of successful Lucas claims itself tells a significant story about the importance of pleading takings claims. I contend that Lucas’ most enduring value is not its contribution to the positive law but rather its effect on how litigants shape their cases. A crucial aspect of the Lucas categorical regulatory takings analysis has been, and will continue to be, the problem of defining the denominator in the regulatory takings equation. My research suggests that Lucas’ holding incentivizes the private contractual agreements entered into by property owners to shrink the takings denominator and tilt the scales slightly in favor of the plaintiff. The ability of a property owner to reduce the denominator remains the loadstar for a Lucas case-winning strategy. 

This is important for not only theorists but also for practitioners to know — those who litigate and conduct transactions in Lucas’ shadow.

July 18, 2016 in Recent Scholarship, Takings | Permalink | Comments (0)

Saturday, July 9, 2016

Professors' Corner: Conservation Easements

RPTE

Professors’ Corner
A FREE monthly webinar featuring a panel of law professors,
addressing topics of interest to practitioners of real estate and trusts/estates

Tuesday, July 12, 2016
12:30 p.m. Eastern/11:30 a.m. Central/9:30 a.m. Pacific
Conservation Easements: Contemporary Issues and Challenges

Speakers:

Federico Cheever, Professor of Law & Co-Director of the Environmental and Natural Resources Law Program, University of Denver Sturm College of Law

Nancy A. McLaughlin, Robert W. Swenson Professor of Law, University of Utah S.J. Quinney College of Law

Jessica Owley, Associate Professor of Law, SUNY Buffalo Law School

Moderator:

Amy Morris Hess, Waller Lansden Dortch & Davis and Williford Gragg Distinguished Professor of Law Emeritus,
University of Tennessee College of Law

Conservation easements have become an increasingly popular land protection tool, in part due to the availability of generous federal and, in some cases, state tax incentives for their donation. There are, however, a number of contemporary issues and challenges associated with conservation easements that all attorneys should be aware of. The speakers, each of whom has extensive experience with conservation easements, will address:

  • the sometimes surprising laws that impact the creation and administration of conservation easements,
  • the due diligence required when a client is considering conveying a conservation easement, and
  • the lessons learned from the voluminous case law regarding qualifying for a federal charitable income tax deduction for the donation of a conservation easement.

Register for this FREE webinar by clicking here.

Sponsored by the ABA Real Property, Trust and Estate Law Section
Legal Education and Uniform Laws Group

July 9, 2016 | Permalink | Comments (0)

Thursday, July 7, 2016

Davidson & Infranca on the Sharing Economy

Nestor Davidson (Fordham) & John Infranca (Suffolk) recently posted The Sharing Economy as an Urban Phenomenon (Yale Law & Policy Review) on SSRN. Here's the abstract:

Seemingly overnight, companies like Uber, Lyft, Airbnb, WeWork, Taskrabbit, Shyp, and many others have transformed transportation, accommodations, personal services, and other sectors. The evolving regulatory response to this “sharing economy” presents an intriguing puzzle. Where telephone, broadband, early Internet companies, and similar previous technologies were shaped by battles with federal regulators, the fate of sharing enterprises is playing out in front of taxi and limousine commissions, zoning boards, and city councils. 

The reason for this atypical dynamic, this Article argues, is that — unlike prior technological disruptions — the sharing economy is fundamentally an urban phenomenon. The platforms that enable sharing leverage or confront conditions of density, proximity, specialization, and even anonymity that mark city life. And many sharing companies flourish through a kind of regulatory arbitrage that finds value in frictions and barriers generated by urban regulatory regimes. 

A fascinating experimentalist dialectic is emerging from the resulting decentralized regulatory landscape. Local economic, political, legal, and social conditions are generating regulatory responses that range from full embrace to open hostility. And sharing enterprises are responding by adjusting their business models and reconciling in various ways to these regulatory constraints. These compromises are generating creative solutions to balancing innovation and public welfare. 

The interaction between urban governance and the sharing economy, however, flows both ways. Local governments are being pushed to be more transparent about their policy interests, creating spillover effects in regulatory regimes beyond the sharing economy. And the sharing economy is transforming cities themselves. The shift from ownership to access is altering development and mobility patterns as traditional links between transportation, housing, and labor markets and the shape of metropolitan space morph. 

By framing the sharing economy as an urban phenomenon, this Article sheds important new light on a rapidly emerging scholarly discourse. To date, scholars have failed to recognize the sharing economy’s deep reliance on the urban fabric and its potential to mold that fabric. Understanding this relationship will also lead to better calibrated regulatory responses that reflect the sharing economy’s holistic impact on cities. Equally important, it will firmly ground our understanding of the sharing economy in its urban birthplace as it matures.

July 7, 2016 in Land Use, Law & Economics, Property Theory, Recent Scholarship | Permalink | Comments (0)

DeBarbieri on Community Benefits Agreements

Edward_debarbieriEdward W. De Barbieri (Brooklyn Law School) has posted Do Community Benefits Agreements Benefit Communities? (Cardozo Law Review) on SSRN. Here's the abstract:

Community Benefits Agreement (CBA) campaigns and public discussions about community benefits are becoming the norm in deciding how large urban projects are built outside of formal public land use approvals. CBAs have revolutionized land use approvals for large, public-private economic development projects: now developers and coalitions representing low-income communities can settle their disputes before formal project approval. As a result, CBAs are now commonplace nationwide.

Legal scholarship, however, has failed to keep up with these important developments. This Article aims to do just that by examining how CBAs, when properly negotiated, lower transaction costs, enhance civic participation, and protect taxpayers. It argues that CBAs achieve all these outcomes well, and more efficiently than existing government processes. Indeed, this Article’s central argument is that to the extent that scholars have analyzed CBAs, their analyses have gone astray by either dismissing CBAs as harmful to communities or by focusing on the role of the state in negotiating what really should be a private contract between a coalition of community groups and a developer. It is a mistake to give the state’s role in CBAs primacy over the community coalition because the inclusion of government in the CBA bargaining process creates a host of constitutional protections for developers — namely that the community benefits must be connected to and proportional with the instant government approval.

This Article places focus back on CBAs as private contracts enforceable by inclusive and representative community coalitions. It presents a case study of a successful CBA negotiated for the development of the Kingsbridge National Ice Center in the Bronx. This Article proposes a framework for assessing the impact of CBAs in economic development — one that recognizes the nuanced role that states and municipalities play in the formation and enforcement of CBAs. The framework focuses on the extent to which CBAs (1) lower transaction costs by effectively resolving disputes among developers and community groups, (2) increase civic participation in public processes, (3) protect taxpayers, and (4) avoid government intervention and constitutional protections for developers. This Article concludes with recommendations for the appropriate, limited role of government in CBA negotiations.

July 7, 2016 in Home and Housing, Land Use, Landlord-Tenant, Real Estate Finance, Real Estate Transactions, Recent Scholarship | Permalink | Comments (0)

Friday, July 1, 2016

Roark gives TED Talk on Development and Human Impact

RoarkMarc Roark (Savannah) recently gave a TED Talk on his article Human Impact Statements (Washburn Law Journal). Here's the abstract from SSRN:

When a city undertakes a development project, low income and homeless persons face risks of expulsion. Public and private developers often target low-income neighborhoods and public lands because those spaces are viewed as economically more attainable or available for development. Moreover, the legal system's preference to treat disputes as individual entitlement claims tends to relegate disputes to broad questions of entitlements rather than unpacking the impacts that property changes have on the vulnerable populations. Whether by gentrification or by enhancement of city infrastructure, developer decisions disrupt what are already unstable living environments by imposing increased costs of relocation. These changes also destabilize community relationships by separating individuals and families from their support networks, local transportation options, and local employment that they have come to rely on. In short, low-income and homeless persons find themselves even more destabilized when public and private development projects force their evacuation from where they live. This article argues that though development may be necessary, it should not be undertaken without more serious evaluation of the human impacts in relation to the space. Such evaluations should include the impact on communities, employment, education, and environment for impacted persons. Importantly, failure to take notice of these impacts continues to promote cycles of poverty that plague American cities.

Drawing on similarities in the environmental context, the article argues that a NEPA-like approach to human housing can offset externalities that homeless persons and those living in low-income housing are forced to internalize through environment changes. Amongst those impacts are the imbalance between the well-funded developer and low income populations; the view that low income properties can be classified as nuisance-type properties; and the tendency to only consider the highest best use of property as the rationale for development. The article concludes by offering model legislation that could be implemented to provide a NEPA like assessment to city development.

And here's his TED Talk. Good job, Marc!

 

July 1, 2016 in Home and Housing, Law Reform, Real Estate Transactions, Recent Scholarship | Permalink | Comments (0)

Tuesday, June 28, 2016

Job Posting: Director of Property Rights Initiative at New America

The non-partisan think tank New America has a new job posting that might be of interest to property-minded folk. Details are at the link below. The website describes the position, in part, as follows:

"New America seeks a director for a new initiative devoted to the study of, and advocacy for, property rights. The individual we seek will already have substantial experience in the field of property rights, as a global development professional, civil servant, journalist, or academic. He or she will also be a strong, clear writer and editor, with a desire not only to advance the state of property rights research, but also to parse such research for a non-specialist audience, in the United States and around the world. The successful candidate will also have a good understanding of the impact of new technologies on property rights, which will be a particular focus of the initiative.

"The director of the initiative will have substantial voice in shaping it...."

http://newamerica.jazz.co/apply/DjVy7a/Director-Of--Property-Rights-Initiative

 

June 28, 2016 | Permalink | Comments (0)

Sunday, June 26, 2016

Newman on the Economics of Indigenous Property Rights

Newman
Dwight Newman (Saskatchewan) has posted The Economic Characteristics of Indigenous Property Rights: A Canadian Case Study (Nebraska Law Review) on SSRN. Here's the abstract:

Legal and economic scholars have increasingly drawn attention to the impact of property rights issues on economic prosperity for Indigenous communities around the world. In the context of a constitutional provision entrenching Indigenous rights in a state whose resource industries have an international strategic significance, Canadian courts have been and are currently engaged in a process of creatively developing the parameters of various Indigenous rights, including Indigenous property rights. This Article will argue that in doing so, they have developed certain characteristics on those property rights that seemingly undermine Indigenous communities’ own opportunities to make economically beneficial choices concerning uses of their own lands for resource development. The Article will ultimately suggest that this case study raises concerns about the idea of courts focused on public law considerations being positioned so as to develop the private law characteristics of Indigenous property rights. To do so, focusing first on the Supreme Court of Canada’s landmark Aboriginal title decision in the Tsilhqot’in case, Part II of this Article engages first in the complex legal doctrinal task of trying to unpack certain aspects of just what the Court actually said on Aboriginal title and its parameters. Part III builds upon that description of the nature of the Aboriginal title property right and related writing by economic scholars to consider the economic implications of characteristics of that property right, which exhibits — relative to what would have been possible with different drafting of the judicial rules — uncertainties of scope and incentivization of attempts to create further uncertainty, simultaneous imposition of roles to multiple decision-makers on uses of the property and of surprisingly fragmented ownership characteristics, and significant restrictions on alienability of property rights. These characteristics may lead to significant economic consequences both in the context of Indigenous communities contracting with outsiders (such as with resource development proponents) and in the context of members’ own use of the land. The latter parts of Part III try to show the practical consequences for specific resource developments that might be considered by Indigenous communities, such as in the context of a mining development. Part IV, engaging with broader law and economics scholarship on the efficiency of common law adjudication processes, tries to offer some explanations of why the courts are developing these rights in ways that have these economic characteristics, in part by showing how the context in which they are operating is distinct from traditional common law contexts in which scholars have shown why courts have developed legal doctrines that fit more closely with economic efficiency. Part V tries to offer some policy responses that could help to promote the development of more economically functional property rights for Canadian Indigenous communities. Although the particular discussion is situated within Canadian legal doctrine, it will also conclude by referencing broader implications, both for American resource investors and for analogous contexts elsewhere in the world, including for the possibility that courts are not best situated to develop the shape of Indigenous property rights when their adjudicative processes are structured in certain ways.

June 26, 2016 in Law & Economics, Recent Scholarship | Permalink | Comments (0)

Friday, June 24, 2016

The Takings Clause and the Contracts Clause: Friends or Foes?

Constitution

I’ve been doing a lot of research lately on how property law and the law governing debt recomposition interact—specifically in the context of the Puerto Rican debt crisis. Two major concepts that keep coming up in my research are the Takings Clause and the Contracts Clause.

Property law professors routinely teach eminent domain and Takings Clause concepts in class. In fact, it’s rare to attend a property law conference these days without at least several panels being devoted to such topics. But, I’ve not spent much time thinking about the Contracts Clause—or how it’s different from/similar to the Takings Clause.

Let me make this a little more concrete [BEWARE: this is going to be long-winded] . . . the Supreme Court recently struck down Puerto Rico’s Recovery Act. For those who haven’t been following this as obsessively as I have, Puerto Rico has been going through a bit of a debt spiral of late (to the tune of about $72 billion). Rather than waiting for Congress to do something about it, back in June 2014 Puerto Rican lawmakers decided to take things into their own hands and passed something called the Public Corporation Debt Enforcement and Recovery Act. The new law essentially created a bankruptcy-like process for the island to restructure its debt (I am summarizing, of course. For a more in-depth discussion, the good folks over at CreditSlips have some great descriptions and analysis).

Naturally, the island’s bondholders didn’t greet this new law with open arms. A group of them quickly filed a lawsuit in late summer 2014 arguing that the Recovery Act was unconstitutional. They raised a number of claims, including that the Act was preempted by the U.S. Bankruptcy Code. Now, despite the way oral arguments seemed to go, on June 13, 2016 SCOTUS struck down the Recovery Act in Commonwealth of Puerto Rico v. Franklin California Tax-Free Trust et al., holding that it was preempted by the federal bankruptcy code (specifically, Section 903).

But the part that got me thinking didn’t have anything to do with the Bankruptcy Clause—instead, I got interested in some of the other claims that the bondholders made, but that were not decided by the Court. They asserted in their complaint that “The operation of the Act, as enacted by the Commonwealth and signed into law by the Governor, threatens to improperly impair Plaintiffs' rights . . .  in contravention to . . .  the Takings Clause, and the Contract Clause.” See Amended Complaint, Franklin California Tax-Free Trust et al., 2014 WL 4954576 (D. Puerto Rico) (Trial Pleading). So, basically, modifying the creditor’s debt would violate the Contracts Clause and the Takings Clause—so Puerto Rico can’t do it – because both constitutional rights apply—or something like that—Right?

THE CONTRACTS CLAUSE

The Contract Clause (Article I, Section 10, Clause 1) states that “[n]o state shall . . . pass any . . . law impairing the obligation of contracts . . . .”

By its very terms, it only applies to the states (i.e., feds, this isn’t a problem for you). The Contracts Clause has a storied history—ebbing and flowing from importance to obscurity. In the early days of the republic (often called the Critical Period, being that time during which the Articles of Confederation were in effect) it was precisely due to a fear of state governments interfering with the rights of creditors that the provision was ultimately included in the federal constitution. As background, after the American Revolution many citizens of the new country found themselves horribly in debt. As a result, various state legislatures began passing laws to ease their pain (which creditors didn’t like very much). Drafters of the constitution found these “invasions into the contracts of private parties” harmful to commerce and the general course of business so they decided to put a limitation in place. See Ogden v. Saunders, 25 U.S. 213, 354 (1827) (for some angry commentary by Chief Justice Marshall).  As with so many other provisions in the federal constitution, numerous state constitutions contain parallel contracts clauses as well.

THE TAKINGS CLAUSE

The Takings Clause (in the Fifth Amendment), on the other hand, provides that “private property [shall not] be taken for public use, without just compensation.”

Going back to the early days of the Republic, Thomas Jefferson and his buddies who were opponents of a strong central government advocated for the Bill of Rights (which contained the Fifth Amendment), but they weren’t the first to come up with the idea of protecting private property from the government. The Magna Carta had a similar idea going on, and the concept was already fairly prominent in various state constitutions during the period of the Articles of Confederation. 

Initially, the Takings Clause only applied to the federal government (i.e., states, not your problem). Chief Justice Marshall stated in Barron v. Mayor and City Council of Baltimore, 32 U.S. 243 (1833) that “The provision in the fifth amendment to the constitution of the United States, declaring that private property shall not be taken for public use, without just compensation, is intended solely as a limitation on the exercise of power by the government of the United States; and is not applicable to the legislation of the states.”

But that all changed with the ratification of the Fourteenth Amendment in 1868. In Chicago Burlington and Quincy R.R. v. City of Chicago, 166 U.S. 226 (1897) the Court stated: “‘Whatever may have been the power of the states on this subject prior to the adoption of the fourteenth amendment to the constitution, it seems clear that, since that amendment went into effect, such limitations and restraints have been placed upon their power in dealing with individual rights that the states cannot now lawfully appropriate private property for the public benefit or to public uses without compensation to the owner.”

To the point about the recomposition of debt, SCOTUS later developed the regulatory takings doctrine in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), which provides that the government need not physically dispossess a person from his property in order for a takings claim to be raised. Rather, the government could restrict or regulate the use of property to such a degree that the state action was tantamount to a physical taking.

THE CLAUSES WORKING TOGETHER (OR NOT)

So now, when a state government takes an action that causes an impairment or modification of a contract, an aggrieved party can asset claims under both the Takings Clause and the Contracts Clause. That got me wondering—are they really, practically different? Do they produce different outcomes? Are those outcomes consistent? Do courts do a good job (or even try) when it comes to differentiating between the two?

I’m still working on the answers to those questions, but what does seem clear to me is that there doesn’t appear to be very clean lines here. The law is a bit…well…cloudy.

Take the Contracts Clause, for instance. Contemporary cases have held that just because a law impairs a contact doesn’t necessarily mean that it’s prohibited. Cases like U.S. Trust v. New Jersey, 431 U.S. 1 (1977) and Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978) hold that this clause still has to be squared with “the inherent police power of the State to safeguard the vital interests of its people.” See Energy Reserves Group, Inc. v. Kan. Power & Light Co., 459 U.S. 400, 410 (1983). The Supreme Court noted in U.S. Trust that “an impairment may be constitutional if it is reasonable and necessary to serve an important public purpose.” So the prohibition isn’t all that prohibitive after all.

In the context of the Takings Clause, courts have held that various government actions, despite limiting or restricting the use of property, nevertheless do not raise a takings claim. Regulations related to providing for the general welfare, for instance, are perfectly permissible. The court in Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 105 (1978) stated that where the government “reasonably conclude[s] that ‘the health, safety, morals, or general welfare’ would be promoted by prohibiting particular contemplated uses of land,” there is no requirement to compensate the owner. Joe Singer points out in Justifying Regulatory Takings, 41 Ohio N.U. L. Rev. 601 (2015) that:

Key examples of laws that promote the public welfare are zoning and environmental laws and consumer protection laws such as building codes. The Supreme Court has upheld against takings challenges laws that impose height limits and setback requirements, as well as zoning laws that segregate residential, commercial, farming, institutional, and industrial uses. The Court has upheld public accommodation laws and implicitly approved fair housing and employment discrimination laws. It has allowed minimum wage and maximum hours laws and workplace safety laws to operate without challenge.

Both clauses are, in a sense, concerned with protecting the sanctity of property rights (be they tangible—like land or personalty—or intangible—like those arising from a contract creating debt). One obvious difference is that with the Takings Clause it’s still possible for state governments to “take” property as long as they do so for a public purpose and just compensation is paid. Under the Contracts Clause, however, states are flat out prohibited from impairing a contract right. But, as indicated above, both of these commands can ring a bit hollow. States can pass laws that break contracts when it's “necessary and reasonable” and states can regulate property without causing a taking when its “justified.” And if a state is prohibited from impairing a contract, then can they just turn around and claim they're doing it under the Takings Clause? Can a public purpose be "necessary and reasonable" for Contracts Clause purposes and yet not "justified" for Takings Clause purposes? What about the other way around? Are these standards different or are they the same thing?

So what does all this mean for the distinction between the two? Can they always be raised together in the face of state action? What are the defining features/lines that make them wholly separate concepts—or is it better to think of them as being interlocking (like how Justice Kennedy describes the Equal Protection and Due Process Clauses in Obergefell v. Hodges)? I hope to formulate some answers to these questions (or at least sound a bit more like I know what I’m talking about) in the months ahead. Your thoughts are welcome and appreciated in the comments below.

June 24, 2016 in Law & Economics, Personal Property, Property Theory, Recent Cases, Takings | Permalink | Comments (1)

Sunday, June 19, 2016

Reiss on Housing and Sustainability

ReissDavid Reiss (Brooklyn) has posted Ensuring that Homeownership is Sustainable (Westlaw Journal of Bank and Lender Liability) on SSRN. Here's the abstract:

This short article argues that the Federal Housing Administration has suffered as a result of many of the same unrealistic underwriting assumptions that led to problems for many lenders during the 2000s. It, too, was harmed by a housing market as bad as any since the Great Depression. As a result, the federal government announced in 2013 that the FHA would require the first bailout in the agency’s history. While facing financial challenges, the FHA has also come under attack for the poor execution of policies designed to expand homeownership opportunities.

Leading commentators have called for the federal government to stop having the FHA do anything but provide liquidity to the low end of the mortgage market. These critics rely on a few examples of agency programs that were clearly failures, but they do not address the FHA’s long history of undertaking comparable initiatives. In fact, the FHA has a history of successfully undertaking new homeownership programs. However, it also has operational flaws that should be addressed before it undertakes similar future homeownership initiatives. 

June 19, 2016 in Recent Scholarship | Permalink | Comments (0)

Friday, June 17, 2016

June in Germany: Kein Law and Econ in Deutschland

The law and econ movement has influenced large swaths of American law, particularly in the area of property law. People may disagree whether the vast influence law and economics has had for the past seventy-ish years over property law is for better or worse, but the impact law and econ has had on property law is indisputable. In fact, the influence is so strong, it can be challenging to contemplate a property regime with absolutely no reliance on law and econ.

If you want to see such a system, look no further than Deutschland. Law and economics has not made it to Germany. For the foreseeable future, if law and econ comes knocking at the country’s door, my guess is that border patrol will turn it away.

No where is the lack of law and econ in German law better seen than in the subject of waste. We all know about waste—the doctrine of waste precludes a current possessor of property from taking actions (or inactions) that might harm the predesignated future owner of the property. And we all know about Melms and how Pabst Blue Ribbon gained its glory in property law textbooks throughout the United States by furthering the concept of ameliorative waste. But here are a few things you might not have known:

(1) Almost every legal system has a Melms-like fact pattern. The Romans talk about converting land into vineyards for grapes. The English talk about converting a house into a pub. The French follow the Romans and the god of Bacchus. The Americans follow the English and beer-making. It’s almost shocking how, for more than one thousand years, society has always had the desire to change land from something residential into something alcoholic. With this random trivia in mind, I looked into German law. What do the Germans have? Nichts. Zilch. Nada. Nothing even remotely similar. I have proposed the basic Melms hypo to at least half a dozen German law scholars from Passau to Hamburg and their response has been, uniformly, “that fact pattern would never happen in Germany.” Full stop. Part of the reason it may never happen is because of the strong recording system in Germany, the Grundbuch, the details of which will be in a forthcoming post. Some of it may because due to the waste policy in German law. Who knows. But Germany is where the common fact pattern ends.

(2) German law rejects Melms. For usufruct law (usufructs being the civil law analog to life estates), the German BGB provides that the usufructuary may not alter the economic purpose of the property. BGB section 1030 provides that “An object can be burdened in such a way, that the person for who benefit this burden occurs is entitled to the use of the object and to take the fruits.” Section 1036 describes the type of use the usufructuary can make: “(1) The holder of a right of usufruct is entitled to possession of the object. (2) In the exercise of his right to use the holder must maintain the economic purpose for which the object was used and must exercise his right in a normal economic way.” Finally, section 1037 provides that “[t]he holder of a right of usufruct is not entitled to transform or actually change the object.” Bottom line, the usufructuary (=life tenant) ain’t altering anything big or anything that doesn’t fit with the economic purpose of the property. If the land has a mansion on it, nothing but a mansion is going on it.

(3) There is no give in the interpretation of BGB sections 1030 and 1037. German courts have narrowly interpreted BGB section 1037 such that any substantial change is prohibited. For example, the Landesgerichte court in Siegen, Germany held in 2014 that a usufructuary could not add a carport onto a house because the addition of the carport was more than an inconsequential addition and thus was an unlawful transformation.

(4) Leading me back to law and econ, German law would not allow a transformation of property that increased the value of the property. In 1983, a German court found a usufructuuary could not convert a single-family building into three flats because that would be a transformation of the property and alter the purpose of the property. A double whammy under the BGB. There was no discussion in the case about the fact a three-flat building could be more financially valuable than a one-family building It’s unclear that argument was even raised, though admittedly, German cases are not the most transparent cases in the world. But German commentaries cite the case for the proposition that a usufructuary cannot alter property even if that alteration increases the property’s value. You might think there would be something more definitive on the topic, something a la Melms, but there is not. It’s almost as if the law and econ idea is so foreign and antithetical to German law, that the argument never really comes up.

At this point, you may think waste is a small example, but looking in other areas of German property law, you don’t see law and econ anywhere. Take co-ownership. The German law of co-ownership (Miteigentum) has a detailed set of rules about how co-owned property can be used and managed. If all co-owners cannot agree, majority wins. So if there are 4 co-owners, each owning 25% of the property, and 3 vote one way, the 3 win. Simple. But German law places restrictions on what the majority can do. The majority cannot vote on any “substantial change” to the property. See BGB section 745. Even if the change will increase the value of the property, the 3 can’t do it. Yes, they can always partition, but German law excludes co-owners from making any profitable changes that are “substantial” if everyone is not on board. What does substantial mean? There are not a lot of cases on it, but it appears between the cases and commentaries that “substantial” is interpreted fairly broadly as to restrict co-owners’ ability to alter property. For example, building a parking garage on what had previously been a parking lot would be a substantial change. Further, anything that is expensive is a substantial change. A whole lot gets captured under the “substantial change” language meaning co-owners cannot do much without everyone’s consent, regardless of whether the end result behooves them all.

What makes German law so interesting to me is that there are lots of similarities with the American common law system—German civil law has servitudes and mortgages and takings and all of the other topics we talk about in the American common law system. And in many cases, there are very similar results. But one area where stark differences can be noticed is in the total lack of influence the law and economics movement has had on German law.

June 17, 2016 | Permalink | Comments (0)

Wednesday, June 15, 2016

Cupp on Animal Rights and Property Law

Cupp
Richard Cupp (Pepperdine) has posted Animals as More Than "Mere Things," but Still Property: A Call for Continuing Evolution of the Animal Welfare Paradigm (University of Cincinnati Law Review) on SSRN. Here's the abstract:

Survival of the animal welfare paradigm (as contrasted with a rights-based paradigm creating legal standing for at least some animals) depends on keeping pace with appropriate societal evolution favoring stronger protections for animals. Although evolution of animal welfare protection will take many forms, this Article specifically addresses models for evolving conceptualizations of animals’ property status within the context of animal welfare. For example, in 2015 France amended its Civil Code to change its description of companion animals and some other animals from movable property to “living beings gifted with sensitivity,” while maintaining their status as property. This Article will evaluate various possible approaches courts and legislatures might adopt to highlight the distinctiveness of animals’ property status as compared to inanimate property. Although risks are inherent, finding thoughtful ways to improve or elaborate on some of our courts’ and legislatures’ animals-as-property characterizations may encourage more appropriate protections where needed under the welfare paradigm, and may help blunt arguments that animals are “mere things” under the welfare paradigm. Animals capable of pain or distress are significantly different than ordinary personal property, and more vigorously emphasizing their distinctiveness as a subset of personal property would further both animal welfare and human interests.

June 15, 2016 in Articles, Law Reform, Recent Scholarship | Permalink | Comments (0)