PropertyProf Blog

Editor: Stephen Clowney
Univ. of Arkansas, Fayetteville

A Member of the Law Professor Blogs Network

Monday, February 9, 2015

Bubb & Krishnamurthy on Mortgage Regulation in the Dodd-Frank Act

Ryan Bubb (NYU) & Prasad Krishnamurthy (Berkeley) have posted Regulating Against Bubbles: How Mortgage Regulation Can Keep Main Street and Wall Street Safe - From Themselves (Penn Law Review) on SSRN.  Here's the abstract:

As the Great Recession has painfully demonstrated, housing bubbles pose an enormous threat to economic stability. However, the principal mortgage market reforms in response to the latest boom and bust — the Dodd-Frank Act’s provisions on mortgage lending and securitization — are not designed to protect the economy from a housing bubble. Instead, these reforms tinker with the incentives of securitizers and lenders to prevent their exploitation of naïve investors and borrowers. In particular, they require securitizers to retain credit risk and lenders to assess borrowers’ ability to repay.

This approach misses the mark. The sine qua non of a bubble is market-wide overoptimism about future house prices. Irrational exuberance in a bubble leads parties across the entire system of housing finance to make risky bets based on rosy beliefs. It is not just investors who underprice credit risk and borrowers who overextend. Securitizers and lenders are also eager to take on dangerous levels of risk and leverage. The Dodd-Frank Act’s incentive-based reforms, by relying on rational behavior by supposedly sophisticated parties, will do little to protect the economy from a bubble. They might even increase systemic risk by concentrating mortgage risk in large financial institutions.

Because indirect incentive-based regulation is ineffective in a bubble, more direct mandates should be employed. We suggest a number of direct regulations to limit mortgage leverage, debt-to-income levels, and other contractual features that enable or induce borrowers to take out larger loans. We show how such limits can curb bubbles, lower defaults, and reduce household exposure to housing risk. While such limits would undoubtedly entail costs, such as restricting access to mortgage credit and homeownership, we suggest straightforward ways to mitigate many of these concerns. Our critique of incentive-based regulation also provides an important new perspective on current legislative efforts to reform the broader architecture of housing finance.

The Dodd-Frank Act’s mistargeted approach reflects in part the growing literature in behavioral law and economics that shows how sophisticated firms take advantage of biased consumers. Indeed, much of the debate over the appropriate response to the Great Recession has been about how to keep Main Street safe from Wall Street. We advance this literature by showing that the mistakes of firms have important implications for the design of regulation. Our analysis calls for a fundamental paradigm shift. The central policy challenge is to keep Main Street and Wall Street safe from themselves.

February 9, 2015 | Permalink | Comments (0) | TrackBack (0)

Friday, February 6, 2015

Conference Announcement: National Perservation Law

Screen Shot 2015-02-06 at 10.43.03 AM

Georgetown Law and the National Trust for Historic Preservation have teamed up to present a national conference on Historic Preservation Law at Georgetown Law on February 25.  The list of speakers features a number of prominent thinkers from both within and without the academy. This is certainly one of the largest and most exciting Historic Preservation conferences of the past decade.

Too see the conference agenda click here (pdf).

And here's a link to the registration.

February 6, 2015 | Permalink | Comments (0) | TrackBack (0)

Thursday, February 5, 2015

A One Man City Beautiful Movement


The New York Post has a story on John Colgan, a security guard who has made it his personal mission to refurbish the city's ornate fire call boxes:

The state of the city’s quaint fire call boxes is simply alarming, says a Queens graffiti avenger who’s repainted dozens of the street fixtures.

John Colgan, a 39-year-old security guard, began his crusade to beautify the alarm boxes, and hundreds of hydrants, mailboxes and lampposts, three years ago, when he noticed one near his Woodside home covered in ugly graffiti.

Now, several nights a week, Colgan scours city streets for badly tagged fixtures. His car serves as a makeshift art studio, jammed with brushes, paints and a ladder.

He spends up to 18 hours per call box — first covering them in a base layer of glossy red, then adding gold detailing and finishing by outlining words in bright white.

February 5, 2015 | Permalink | Comments (0) | TrackBack (0)

Kochan on the Right to Exclude

Kochan_DDonald Kochan (Chapman) has posted Bubbles (Or, Some Reflections on the Laws of Human Relations) (Fordham Environmental Law Review) on SSRN.  Here's the abstract:

Very few of us want to live in the absolute isolation of a “bubble.” Most humans cherish the capacity to interact with their external environment even when we know that, at times, such exposure makes us susceptible to all sorts of negative effects ranging from mere annoyance to the contraction of deadly illnesses. Yet, because there are so many positive elements and benefits from that interaction and exposure, we often are willing to take the bitter with the sweet. We tolerate much external exposure to bad things in order to take advantage of the collisions with the good things that our outer environment offers. Yet, at the same time, to one extent or another, we all live with, and choose to cherish at times, some metaphorical, protective bubble around us, and it is the law that helps to define that bubble’s contours and provide its relative strength against those forces that might intrude upon it.

This Essay understands the right to exclude and the control of externalities as far more than a real property issue, the area of law where it is normally discussed. Most laws regarding human relations involve these same concepts. Individuals have the right to exercise dominion by doing what they wish with their property in the self and in things, while keeping people and things out (the right to exclude) or letting people and things in (the right to include, consent). The law struggles to formulate rules, including those related to the boundaries of property or the integrity of the body, to protect these bubbles and to define unacceptable externalities and remediable wrongs. This Essay seeks to identify the difficult choices we must make in deciding which intrusions we must accept as normal, inconvenient incidents of life and which we decide to deem externalities against which we should institute enforceable legal rules and protections.

February 5, 2015 | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 4, 2015

Property Events at the University of Florida


Our good friends in Gainesville have exciting property-related news to announce. 

First, the annual Nelson Symposium will be held on Friday, February 6.  This year's theme is "Kelo's First Decade: The Eminent Domain (R)evolution." Speakers include Scott Bullock (Institute for Justice); Marc Edelman (Baruch College); Robert Hockett (Cornell); Alexandra Klass (Minnesota); Roy Payne (Assistant City Attorney for Orlando); Ilya Somin (George Mason); and Michael Wolf (Florida). The full details are here/ 

For those who can't make the quick trip to Gainesville (it's supposed to be in the 70s this weekend), the law school will be posting a video on-line a few days after the event.

Second, Bob Ellickson of Yale will deliver the annual Wolf Family Lecturer later this month (on the 26th). Here are the details.   This talk, entitled "Open Space in Urban Areas: Might There Be Too Much of a Good Thing?," will also be available on video a few days after the event.

Kudos to Florida for putting together these exciting events.

February 4, 2015 | Permalink | Comments (0) | TrackBack (0)

Levitin & Wachter on Second-Liens and the Leverage Option

Adam Levitin (Georgetown) & Susan Wachter (Wharton) have posted Second-Liens and the Leverage Option on SSRN.  Here's the abstract:

The finance literature has long recognized the existence of embedded put options within mortgage contracts, such as a prepayment option and a walk-away default option. This Article identifies a previously unrecognized option embedded in residential mortgages: a mortgagor’s unilateral option to increase total leverage on the collateral property through junior liens irrespective of existing mortgagees’ wishes. We term this the “leverage option.”

We show how the leverage option was created as an unintended consequence of a federal law enacted to deal with seller financing arrangements that prevailed during the inflationary economy of the 1970s. The leverage option was of little importance until the housing bubble in the 2000s, as homeowners massively increased their leverage using second-lien mortgages.

We demonstrate the problems that the leverage option causes for lenders, for homeowners (who pay for it, regardless of whether they want it), for regulators, and for the economy at large. We propose a discrete legal change that will convert the leverage option from being a mandatory embedded option to a bargained-for, unembedded option that will enable efficient pricing and force the information about total mortgage market leverage that is necessary for both effective market oversight.

February 4, 2015 | Permalink | Comments (0) | TrackBack (0)

Keiter & Ruple on the Transfer of Public Lands Movement

Robert Keiter (Utah) & John Ruple (Utah) have posted The Transfer of Public Lands Movement: Taking the 'Public' Out of Public Lands on SSRN.  Here's the abstract:

This white paper is a follow-up to our 2014 legal critique of Utah's Transfer of Public Lands Act (TPLA), which demands title to 31.2 million acres of federal public lands in Utah. In our earlier work we concluded that Utah previously disclaimed all legal rights to title to additional lands, and that "[t]he federal government has absolute control over federal public lands, including the constitutional authority to retain lands in federal ownership." Despite its weak legal case, Utah remains dedicated to a public land takeover, and other Western states are poised to follow. This white paper therefore addresses how a public lands takeover would impact land management and access. While we focus on the TPLA, the lessons learned have broader applicability, first because the TPLA serves as the model for other state's Transfer efforts, and second because the TPLA will likely be the first such effort to face a legal challenge.

February 4, 2015 | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 3, 2015

Housing Problems in Rural America


Gillian White looks at the problem of affordability outside the country's metro regions:

It can be hard to understand how finding affordable housing could be an issue in areas where housing is substantially cheaper than it would be in the nearest city or suburb. But the fact of the matter is, despite lower costs of living, income for many in rural areas is also significantly lower thanks to limited economic opportunities and struggling industries, like coal.

“When we are looking at areas that are most challenged economically we're also finding some of the most challenging housing conditions,” says David Dangler, the director of Rural Initiatives at NeighborWorks America, an organization that advocates for affordable housing and acts as a network for nonprofit housing groups. Poverty is high in rural areas, with about 17.2 percent of rural residents living below the poverty line in 2012 versus 14.9 percent nationwide, according to 2012 data from the HAC. “Much of the affordable-housing stock in rural housing areas is old and in need of repair. Many of the people who live there don't have the resources that they need in order to keep the houses in good repair,” says Sheila Crowley, president of the National Low-Income Housing Coalition.

February 3, 2015 | Permalink | Comments (0) | TrackBack (0)

Gervais & Holmes on Publicity Rights

Daniel Gervais (Vanderbilt) & Martin Holmes (Independent) have posted Fame, Property, and Identity: The Scope and Purpose of the Right Of Publicity (Fordham Intellectual Property, Media & Entertainment Law Journal) on SSRN.  Here's the abstract:

This Article examines the overlaps between the right of publicity and rights granted by trademark law and other deception-based restrictions on the use of names and symbols. It shows that the right of publicity creates a more expansive right rooted in a variegated normative soil with elements of privacy, personhood, and property. The Article suggests a proper scope for the right of publicity that protects free speech. The issue of descendibility is also discussed.

February 3, 2015 | Permalink | Comments (0) | TrackBack (0)

Monday, February 2, 2015

Top SSRN Downloads

In honor of the beginning of the month, here are the most downloaded property articles on SSRN over the last 60 days:

1.  [398 downloads]  A Response to the IPCC Fifth Assessment
      Sarah Adams-Schoen (Touro) et. al

2.  [103 downloads]  Agglomerama
      Lee Anne Fennell (Chicago)

3.  [90 downloads]  Surprising Commons
      Carol M. Rose (Arizona)

4.  [74 downloads]  Property in Licenses and the Law of Things
      Christopher Essert (Queen’s)

5.  [71 downloads]  'We Don't Follow, We Lead': How New York City Will Save Mortgage Loans by Condemning Them
      Robert C. Hockett (Cornell)

6.  [58 downloads]  Missing Sticks: Property Institutions and Income Dissipation in Indian Country
      Jacob W. Russ (George Mason) & Thomas Stratmann (George Mason)

7.  [58 downloads]  Land Law in the Age of Globalization and Land Grabbing
      Amnon Lehavi (ICH - Radzyner)

8.  [56 downloads]  A Coordinated Approach to Food Safety and Land Use Law at the Urban Fringe
      Stephen R. Miller (Idaho)

9.  [56 downloads]  Towards a Pre-History of the Public Domain: Copyright Law and its Limits in Eighteenth-Century England
      Simon Stern (Toronto)

10.  [55 downloads]  Injunctive Relief in Disputes Related to Standard-Essential Patents: Time for the CJEU to Set Fair and Reasonable Presumptions
       Pierre Larouche (Tilburg) & Nicolo Zingales (Tilburg)

February 2, 2015 | Permalink | Comments (0) | TrackBack (0)

Friday, January 30, 2015

Map of the Day: What's a $100 Worth Where You Live


Vox summarizes:

Common sense says that a dollar goes further in Manhattan, KS, than in Manhattan. This chart from the Tax Foundation attempts to give some rigor to that idea by using Bureau of Economic Analysis data on metro area price levels to show how far $100 can stretch in each county in the United States. There are a few different factors that drive prices. One is that very remote rural areas (see Maine, or even more so, Alaska) tend to have higher prices than rural areas that are more connected to the rest of the country. That reflects the logistical hassles of importing various goods. The other factor is that urban areas are systematically more expensive than rural ones. But there's also huge variation between urban areas. The Boston-Washington corridor and the California coastline are much pricier than the cities of the South and Midwest. That's overwhelmingly a question of housing costs. The size and geography of the big coastal cities has become unfriendly to further sprawl, while zoning restrictions in inner cities and central suburbs prevent new construction from keeping prices in check.

January 30, 2015 | Permalink | Comments (0) | TrackBack (0)

Blumm & Schaffer on The Federal Public Trust Doctrine

Michael Blumm (Lewis & Clark) and Lynn Schaffer (Lewis & Clark) have posted The Federal Public Trust Doctrine: Misinterpreting Justice Kennedy and Illinois Central Railroad on SSRN.  Here's the abstract:

In Alec L. v. McCarthy, an atmospheric trust case, the D.C. Circuit, in an unreflective opinion, rejected the plaintiffs’ claim that the public trust doctrine demanded action on the part of the federal government to curb atmospheric greenhouse gas emissions. The court relied on dicta in Supreme Court opinions to declare that the public trust doctrine does not apply to the federal government, but exists instead entirely as a creature of state law. In this article, we take issue with the D.C. Circuit’s conclusory opinion, maintaining that it rests on a misreading of the Supreme Court’s articulation of the public trust doctrine in Illinois Central Railroad v. Illinois, a century-old opinion in which the Court struck down a state conveyance of Chicago Harbor to the railroad as a violation of the public trust doctrine without any reliance on state law. Consequently, the D.C. Circuit’s interpretation of the Illinois Central opinion as a reflection of state law is erroneous. Similarly, recent statements by Justice Kennedy concerning the distinction between the equal footing and public trust doctrines were misinterpreted by the D.C. Circuit — as well as some other courts.

We maintain that the public trust doctrine is an inherent limit on all sovereign authority, not just states. Illinois Central is best interpreted as an application of the Tenth Amendment’s reserved powers doctrine, which reserved certain rights “to the people.” Just as the Supreme Court limited state sovereignty to enjoin Illinois from privatizing Chicago Harbor, the reserved powers doctrine should apply to the federal government, a government of limited powers. Application of the public trust doctrine to the federal government calls for close judicial oversight of federal conveyance of public resources or attempts to create monopolies, not judicial deference. We think that such judicial skepticism is warranted if the federal government is to fulfill its duties to protect and preserve public resources for future generations.

January 30, 2015 | Permalink | Comments (0) | TrackBack (0)

Thursday, January 29, 2015

Using Land Use Rules (and Intimidation) to Block an Abortion Clinic

Cosmo runs a story about the troubles that Planned Parenthood has encountered while trying to build up a new clinic in New Orleans:

Over the past several years, Louisiana passed a series of abortion restrictions. But one change that flew under the media radar was to the administrative code, requiring any proposed abortion clinic construction to have a "Facility Need Review" (FNR) approved by the Department of Health. Before 2012, FNRs applied to inpatient health care facilities funded largely by Medicare and Medicaid — nursing homes, hospices — and basically required that, before constructing one of those facilities, the owner demonstrate that it was needed in the area, to cut down on potentially wasteful public spending. No other outpatient medical facilities are specifically required to get FNRs, and Medicaid doesn't cover abortion care in Louisiana.

Planned Parenthood applied for an FNR in October 2014, the first clinic to apply since the abortion-specific FNR law was enacted. The Department of Health rejected the request, saying Planned Parenthood "failed to establish the probability of serious, adverse consequences to recipients' ability to access outpatient abortion services" — because there wasn't enough evidence to show that there would be grave consequences for women if the clinic doesn't perform abortions, the clinic cannot perform abortions.

[...] In September, Planned Parenthood held a community meeting to offer information on the clinic and invited local construction firms, particularly woman- and minority-owned businesses, to see if any of them might be interested in bidding on a contract. Anti-abortion activists were there, taking pictures and posting them online with the heading, "Here are more faces who attended the Planned Parenthood strategy meeting to kill babies," and telling readers, "If you are local and recognize any of these people, please implore them not to take Planned Parenthood's blood money." According to a blog post by anti-abortion activist Jill Stanek, who does not live in Louisiana but participated in the online campaign to dissuade contractors from working on the project, "Planned Parenthood asking minorities to help build abortion clinics is akin to having Jews build gas chambers."

January 29, 2015 | Permalink | Comments (0) | TrackBack (0)

Kloppers & Pienaar on Land Reform in South Africa

Henk Kloppers (North-West University) & Gerrit Pienaar (North-West University) have posted The Historical Context of Land Reform in South Africa and Early Policies (Potchefstroom Electronic Law Journal) on SSRN.  Here's the abstract:

The need for the current land reform programme arose from the racially discriminatory laws and practices which were in place for the largest part of the twentieth century, especially those related to land ownership. The application of these discriminatory laws and practices resulted in extreme inequalities in relation to land ownership and land use. This article provides an overview of the most prominent legislation which provides the framework for the policy of racially-based territorial segregation. It further discusses the legislative measures and policies which were instituted during the period from 1991 to 1997, aimed at abolishing racially-based laws and practices related to land and which eventually provided the basis to the current land reform programme.

January 29, 2015 | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 27, 2015

Property Poetry

Monica Youn, a Yale law grad and poet has a book coming out, entitled Blackacre.  Her poem Whiteacre was recently featured on the American Academy of Poets website.  Here's an interview with Youn, where she talks about the influence of the law on her poetry. Here's the poem:

the trees all planted in the same month after the same fire


              each thick around
              as a man’s wrist


meticulously spaced grids cutting the sunshine


              into panels into planks
              and crossbeams of light


an incandescent architecture that is the home that was promised you


              the promise of your new
              purified body


your body rendered glasslike by fire now open to the light


              slicing through you
              through the glass


bones of your hands as you lift the light free of its verticals

              carry it blazing
              through your irradiated life

January 27, 2015 | Permalink | Comments (0) | TrackBack (0)

Singer on Property Law Conflicts

JoesingerJoseph Singer (Harvard) has posted Property Law Conflicts (Washburn Law Journal) on SSRN.  Here's the abstract:

What law applies to real property? At one time the answer to this question was simple: the law of the situs. But then the choice-of-law revolution came and legal scholars began to see reasons to depart from the situs law rule. As interest analysis and the most-significant-relationship test developed, legal theorists undermined the logical and normative basis for such a simple solution to the choice-of-law problem. In recent years, however, the situs rule has been rehabilitated and increasingly defended by some scholars while others have continued to subject it to criticism. And in fact, the rule was never dislodged in practice and it remained the presumptive rule in the Second Restatement of Conflict of Laws. Even today, courts generally apply situs law to real property issues, although important exceptions have developed over time and some brave judges have deviated from the rule in certain classes of cases.

Rather than argue for or against the rule, this article explains the difference between the false conflicts cases where only one state has a legitimate interest in applying its law and the true conflicts cases where two (or more) states have such interests. That analysis shows cases under which situs law clearly should and clearly should not apply, as well as the true conflict cases that are hard because they present value conflicts generating good reasons both for application of situs law and for deviating from it. Those hard cases are of four types: (a) conflicts between situs law and the law of the domicile of one of the parties; (b) conflicts between situs law and the place where a contractual relationship is centered; (c) nuisance-type cases where the conduct is in one state and the injury is in another; and (d) the special case of federal Indian law which involves the paradoxical case of overlapping situses. The article concludes by addressing the renvoi problem. Real property law has traditionally required application of renvoi for issues involving title to real property. This article explains the reasons why that is so and why those reasons are less powerful than we may have thought.

January 27, 2015 | Permalink | Comments (0) | TrackBack (0)

Monday, January 26, 2015

A Year After Suing Landlord, Still No Heat

New York Housing Court sounds like a disaster:

Two weeks ago, a city housing inspector visited an apartment on the fourth floor of 940 Prospect Place in Brooklyn and issued a violation to the landlord for inadequate heat. The visit was nothing new — since December 2013, residents of 940 and the adjoining building at 930 Prospect Place have made more than 100 complaints about lack of heat or hot water.

How does a simple heat complaint, confirmed by city housing inspectors, take more than a year to resolve?

For many tenants stuck in cold apartments, Housing Court is, on paper at least, the place where they can meet their landlord on equal footing. In practice, tenants and lawyers say, it can feel more like a black hole where complaints languish, city agencies lack enforcement powers and delay seems to be the rule.

[...] When a resident calls 311 with a heat complaint, the call goes to the Department of Housing Preservation and Development, which automatically notifies the landlord. Two or three days later, the agency is supposed to send an inspector to the apartment that called in the complaint. If the resident is at home when the inspector arrives, and if the apartment is cold at the time, the inspector can issue a violation, giving the landlord 24 hours to repair the condition. The agency issued 12,352 violations for heat and hot water in fiscal year 2014, roughly one for every 10 complaints.

[...] Violations alone do not mean penalties. Unlike city agencies that regulate parking or sanitation, the housing department cannot directly assess fines; instead, it must seek them in Housing Court. Even then, Mr. Henriquez of Make the Road said, civil penalties are usually reduced in negotiations between the landlord and the agency. “When landlords know that,” he said, “that incentivizes a culture of noncompliance.”

January 26, 2015 | Permalink | Comments (0) | TrackBack (0)

Fischel on The Politics and Economics of Metropolitan Sprawl

BillWilliam Fischel (Dartmouth - Econ) has posted The Politics and Economics of Metropolitan Sprawl (Book Chapter) on SSRN.  Here's the abstract:

This is chapter 8 from my forthcoming book, "Zoning Rules! The Economics of Land Use Regulation," which will be published by the Lincoln Institute of Land Policy in 2015. This chapter addresses the metropolitan problems caused by local zoning, particularly its contribution to excessive suburbanization and regional housing costs. The chapter starts with a stylized political-economic characterization of government in metropolitan areas and explains how the local politics of zoning differ among big central cities, small suburbs, and rural townships and counties. This simple model offers a foundation for explaining exclusionary zoning, metropolitan sprawl, and regional income sorting. The chapter next considers some variations on this model, which are epitomized by the growth boundaries of Portland, Oregon, and the rejection of comprehensive zoning by Houston, Texas. Both have some merit in combatting the problems of local zoning, but both have some drawbacks that undermine either as a paradigm.

Finally, the chapter asks why housing costs and the stringency of land use regulations varies so much by region of the United States. I argue that restrictiveness is largely the product of the demand for housing itself. High productivity regions attract affluent people who want more land use restrictions to protect their home values. Local homeowners control the political process in the high-demand Northeast by virtue of their control of small local governments, where homeowners prevail easily over developers. In the high-demand West Coast, homevoters prevail because of the availability of the voter initiative, which trumps the otherwise prodevelopment politics of counties and larger cities. Evidence for this was the migration to the sunbelt as a result of the 1970s energy crisis. Housing supply remained elastic and home prices stayed low because most states in the South lack both responsive local governments and the voter initiative that would otherwise have facilitated more regulation.

January 26, 2015 | Permalink | Comments (0) | TrackBack (0)

Friday, January 23, 2015

Valparaiso Seeks to Fill Two Property Positions for 2015-16

As a result of some sudden retirements, Valparaiso is seeking two property profs to start teaching in the 2015-2016 academic year.  The school's advertisements are reproduced below:

FULL TIME TENURE TRACK – 2015-16 Academic Year

VALPARAISO UNIVERSITY LAW SCHOOL (VULS) is seeking to fill a full-time tenure track position with someone interested in teaching property courses as her/his primary teaching responsibility.  Beyond property, we have a number of curricular needs, including transactional law, skills training, and experiential learning programs.  Applications from entry level and experienced teachers are welcome.  Valparaiso University is located in Valparaiso, Indiana, a small college town near the southern shore of Lake Michigan that is approximately fifty miles from downtown Chicago.  The town has excellent schools and affordable housing.  VULS is an equal opportunity employer with a diverse student body; approximately 38% of the members of the current student body are underrepresented minorities.  Please send information to: Chair of the Appointments Committee, Valparaiso University Law School, 656 Greenwich Street, Valparaiso, Indiana, 46383; or, send information by e-mail to


 VALPARAISO UNIVERSITY LAW SCHOOL (VULS) is seeking to fill a full-time visiting professor position with someone interested in teaching property courses as her/his primary teaching responsibility.  Beyond property, we have a number of curricular needs, including transactional law, skills training, and experiential learning programs.  Applications from entry level and experienced teachers are welcome.  Valparaiso University is located in Valparaiso, Indiana, a small college town near the southern shore of Lake Michigan that is approximately fifty miles from downtown Chicago.  The town has excellent schools and affordable housing.  VULS is an equal opportunity employer with a diverse student body; approximately 38% of the members of the current student body are underrepresented minorities.  Please send information to: Chair of the Appointments Committee, Valparaiso University Law School, 656 Greenwich Street, Valparaiso, Indiana, 46383; or, send information by e-mail to

January 23, 2015 | Permalink | Comments (0) | TrackBack (0)

Lawton on Housing Cooperatives

LawtonJulie Lawton (DePaul) has posted Unraveling the Legal Hybrid of Housing Cooperatives (UMKC Law Review) on SSRN.  Here's the abstract:

Housing cooperatives are a form of residential property ownership that first populated in the United States in 1876, though they continue to create legal confusion for legislatures and courts around the country. Housing cooperatives are a corporation, formed pursuant to state statute, solely for the purpose of owning and operating real property for residents. The housing cooperative corporation owns multi-family property occupied by members of the housing cooperative. To become a member, individual residents purchase shares in the cooperative corporation providing them co-ownership in the cooperative corporation, and by extension, co-ownership in the real property. In tandem with the purchase of the cooperative share, each resident executes a proprietary lease representing the occupancy agreement between the resident and the cooperative corporation. The proprietary lease can be short term, such as twelve months, or long term, such as ninety-nine years. Regardless of the term, each resident’s occupancy is governed by the proprietary lease. Residents do not own the real property; the cooperative corporation owns the real property and residents own shares in the corporation. This confluence creates the legal hybrid nature of housing cooperatives: a resident is, at once, both a tenant of the cooperative corporation and co-owner in the cooperative corporation. It is this dual nature that creates the legal conflict in trying to define the legal structure of the housing cooperative.

Some courts, such as Arizona, designate housing cooperatives as ownership and specifically reject the idea of a housing cooperative as rental property. Other courts, such as Illinois, designate housing cooperatives as rental property and reject the argument that a housing cooperative is ownership. One jurisdiction, Georgia, noted that a housing cooperative can be designated homeownership or rental property by the language of the cooperative’s corporate documents. Even the federal government added to the confusion. In an argument before the federal Tax Court, the IRS claimed that a housing cooperative was ownership property, not rental property. The Tax Court disagreed, holding that the residents of the housing cooperative were lease holders, not owners of the housing cooperative real property.

This question of the legal structure of housing cooperatives becomes particularly important when determining the legal process for forcibly terminating the membership of a cooperative resident in an effort to reclaim possession of a terminated member’s unit. Housing cooperatives often attempt to reclaim possession of the unit through an eviction proceeding pursuant to a state’s rental property eviction laws. Residents frequently counter, and some courts have held, that since housing cooperatives are not rental properties, the issue cannot thus be resolved pursuant to an eviction action.

After the court determines whether the cooperative resident is a tenant, there remains the question of the resident’s ownership of the cooperative share. An action of eviction is an action for possession and does not directly resolve the resident’s ownership interest in the cooperative share. Most courts avoid the question by ruling solely on the possessory action without addressing the resident’s ownership interest. Frequently, a cooperative corporation’s bylaws give the cooperative the right to terminate the cooperative resident’s membership with a vote of the cooperative Board of Directors or the cooperative’s members. Cooperatives argue that this membership vote terminates the cooperative resident’s proprietary lease with the cooperative as well as the resident’s ownership of the cooperative share. I argue that the membership termination only terminates the resident’s proprietary lease and, thus only affects the resident’s possessory rights, not the resident’s ownership rights. This Article posits that a housing cooperative is ownership of personal property, not solely, or even primarily, a landlord-tenant relationship. I also argue that when a cooperative resident’s membership is terminated, that the cooperative and the court must bifurcate the decision on possessory rights to the unit from the ownership right to the share.

Part I of the Article introduces the reader to housing cooperatives, their prevalence as an American form of residential housing, and their history. Part II details housing cooperative corporations, their formation, corporate documents and the creation and termination of the housing cooperative membership. Part III evaluates the conflict in the federal and state courts and legislatures about the legal structure of a housing cooperative. Part IV argues that a housing cooperative membership creates ownership of personal property, not solely possession of rental property. Part V presents the rationale behind court decisions holding housing cooperatives as rental property. Part VI argues that housing cooperatives are not ownership of real property. Part VII concludes with the argument that housing cooperative membership creates an ownership interest in the cooperative share, the dispossession of which should be bifurcated from the housing cooperative’s action for possession of the housing cooperative unit.

January 23, 2015 | Permalink | Comments (0) | TrackBack (0)