Friday, September 2, 2016
This week was the 11th anniversary of Hurricane Katrina. Over the years, many have said that Detroit is experiencing a hurricane without water.
Like with Katrina, the property tax foreclosure crisis in Detroit has wiped out entire neighborhoods inhabited by poor and working-class black people. From 2011-15, the Wayne County treasurer foreclosed upon approximately one in four Detroit properties for nonpayment of property taxes.
In fact, Detroit has one of the highest number of property tax foreclosures any American city has had since the Great Depression. Most important, once foreclosed properties are vacated, they are often vandalized, burned down or stripped of all valuable materials, creating a flood of blighted properties that decimate communities by reducing property values, attracting crime and causing those who can to evacuate.
There is a debate about the origins of Detroit’s property tax foreclosure crisis.
Popular narratives have focused on a culture of lawlessness in which property owners have cheated the city by not paying their property taxes and then devising ways to avoid foreclosure.
Some have welcomed the record number of property tax foreclosures as a sign that Detroit, at long last, is establishing law and order. But, I recently co-authored a study titled “Stategraft” that demonstrates that Detroit’s unprecedented property tax foreclosure rate is indefensible because property tax assessments in Detroit are, in fact, illegal.
Michigan’s Constitution clearly decrees that a property’s assessed value cannot exceed 50% of its market value. In our study, we find that Detroit’s assessor is flagrantly violating this vital state constitutional provision. Consequently, contrary to popular narratives, it is the city that is stealing from Detroit property owners through illegal assessments and inflated property tax bills, and not the other way around. And while the city has reassessed properties during the last two years, those actions have not been enough to bring most assessments in line with the Michigan Constitution.
To investigate whether property tax assessments in Detroit are illegal, we use citywide property sales and assessment data for 2009-15. As required by Michigan case law and statute, we included only arm’s length transactions in our analysis, and we find that, in 2009, 65.5% of the properties sold violated the state constitutional assessment limit. In subsequent years the numbers were equally shocking: 2010 (84.7%), 2011 (54.6%), 2012 (71.4%), 2013 (78.2%), 2014 (83.2%), 2015 (64.7%).
The property tax assessments were not only above the legal limit, but they also exceeded it by a substantial sum. For instance, in 2010, assessments were, on average, 7.3 times higher than the legal limit. In 2015, assessments were, on average, 2.1 times higher than the legal limit.
In all years studied, the illegality was most pronounced for lower-valued properties. That is, the city is more likely to assess modest homes at illegal levels than it is more expensive homes, leaving the most vulnerable homeowners drowning in injustice.
Detroit’s mayor, Mike Duggan — a former prosecutor — acknowledged that “for years, homes across the city have been over assessed,” and tried to remedy this in 2014 and 2015 by implementing assessment decreases for most of the city, ranging from 5% to 20%.
Our study shows that illegal property tax assessments nevertheless persist for lower-valued properties despite these reductions. For example, in 2015, properties with the lowest values were, on average, assessed at 4.8 times the legal limit, while properties with the highest values were, on average, legally assessed.
Both before and after Duggan’s assessment reductions, those who can afford only modest properties have been subject to the most severe illegality and forced to endure the consequences of Detroit’s broken levees.
In July, the American Civil Liberties Union of Michigan, the NAACP Legal Defense Fund and the law firm of Covington & Burling filed a class action alleging that the unprecedented number of property tax foreclosures in Detroit is unlawful on several counts, including the fact that the property tax assessments systematically violate the state constitution and the Fair Housing Act. The findings of "Stategraft" strongly support this claim.
The end goal of the class action is to stop all property tax foreclosures that are based upon illegal assessments. As an interim measure, the legal team recently filed a motion for a preliminary injunction that would place a moratorium on property tax foreclosures of owner-occupied properties in Detroit and throughout Wayne County.
To be sure, by reducing city revenues, a moratorium would further wound a city that has been in economic decline for decades and is desperately trying to emerge from the shadow of the largest municipal bankruptcy in our nation’s history. But, just as we do not allow homeless people in desperate need to burglarize homes, we should not allow the City of Detroit to use unlawful assessments and inflated property tax bills to steal money from Detroit property owners. Additionally, the requested moratorium is narrowly tailored so that it protects only vulnerable homeowners and not investors.
Given the mortgage foreclosure crisis, water shutoffs and historic bankruptcy, the people of Detroit have already had to weather several devastating storms. Now that they are facing a hurricane without water, the federal government cannot leave Detroiters stranded.
Attorney General Loretta Lynch must ensure that the Housing and Civil Enforcement Section of the Department of Justice opens an official investigation, which will supplement the ongoing class action and begin to quell the tides of inequity.
Bernadette Atuahene is a visiting professor at the University of Chicago Law School and a research professor at the American Bar Foundation.
Thursday, September 1, 2016
A very belated first post from me – this map of the day is less striking than the Nature Conservancy – UW map of climate-induced migrations that Jerry posted earlier this week, but I’ve found it’s already proved a useful teaching tool.
This map, and the underlying recent work by Geoff Boeing and Paul Waddell, produced in connection with UC Berkeley’s Urban Analytics Lab, is a great way to get students engaged in differences in rental markets and housing affordability issues across the country.
All well worth a read, and this excellent short summary from Kelsey E. Thomas at Next City might be the best place to start students with the semester underway at most schools and the holiday weekend coming up.
Thanks to Steve for such an amazing long run with the blog – it’s been such a wonderful resource for so many people. And thanks to Chris, Sally, and Jerry for everything over the past few months. It’s a privilege to join you all!
Tuesday, August 30, 2016
The Nature Conservancy and the University of Washington put together a map depicting how animals might migrate in response to climate change. One interesting aspect is the limited migration capacity of amphibians in the West, due (I assume) to limited habitat availability.
This just in from Tom Gallanis (Iowa):
Call for Papers
Wealth Transfer Law in Comparative and International Perspective
Friday, September 8, 2017
The University of Iowa College of Law and The American College of Trust and Estate Counsel’s Legal Education Committee are organizing the 7th academic symposium financially supported by the ACTEC Foundation. The symposium, Wealth Transfer Law in Comparative and International Perspective will be held at the University of Iowa College of Law on Friday, September 8, 2017. The keynote address will be given by Professor Lionel Smith of McGill University and King’s College London.
Among the objectives of this symposium are:
(1) To bring together prominent and up-and-coming scholars for the discussion of important issues in wealth transfer law from a comparative and international perspective;
(2) To spur leading-edge research on wealth transfer law, looking beyond the borders of any one jurisdiction;
(3) To encourage U.S. professors of trusts and estates to incorporate comparative and international perspectives into their scholarship and teaching; and
(4) To promote collaborations and exchanges between U.S. and non-U.S. scholars.
Papers presented at the symposium will consist of papers selected from this Call for Papers and papers from invited speakers. The papers will be published in the Iowa Law Review.
If you would like to be considered to present a paper, please submit an abstract of your paper to Professor Thomas Gallanis by email (firstname.lastname@example.org) by November 1, 2016. The Iowa Law Review will notify individuals chosen to participate in the symposium no later than December 1, 2016. Symposium speakers will be required to submit a draft of their papers by August 1, 2017, so that the panel commentators will have sufficient time to prepare their commentary.
Symposium speakers will be reimbursed for their travel expenses (economy airfare, the cost of ground transportation, and up to two nights’ hotel for speakers within North America and up to three nights’ hotel for speakers from beyond North America). Speakers will be invited to dinner on the evenings of Thursday, September 7, and (for speakers staying Friday evening) Friday, September 8.
Breakfast and lunch will be provided to speakers and attendees on Friday, September 8, courtesy of the ACTEC Foundation.
Questions about the symposium or this call for papers should be directed to Professor Gallanis at the email address above.
Saturday, August 27, 2016
Manufactured housing is a major affordable housing resource for millions of people. Restrictive zoning barriers limit its availability, even though studies have discredited myths, such as objections to its safety and quality. A national statute, the National Manufactured Housing Construction and Safety Standards Act, authorizes building code standards that address all aspects of safety, durability and quality, and that preempt state and local codes that deal with this problem. The Act does not preempt restrictive zoning, and Congress should amend the law to cover zoning restrictions. Judicial control of zoning barriers to manufactured housing is unsatisfactory and requires statutory change. Courts accept unequal treatment that applies restrictive zoning only to manufactured housing, though some statutes prohibit discrimination. The cases uphold exclusions from residential districts if manufactured housing is allowed elsewhere. Some statutes prohibit exclusion by requiring manufactured housing as a permitted use in all residential districts, or allow a community to decide what residential districts must accept manufactured housing. Courts uphold aesthetic standards, such as roofing and siding requirements, and some statutes authorize them, though limitations are needed to protect manufactured housing from exclusionary treatment. Communities often require approval of manufactured housing as a conditional use, and approval as a conditional use is often denied. Courts have upheld conditional use denials, and statutory protective standards are needed that will prevent abuse of the conditional use requirement.
Monday, August 22, 2016
Oceanfront landowners and states share a property boundary that runs between the wet and dry parts of the shore. This legal coastline is different from an ordinary land boundary. First, on sandy beaches, the line is constantly in flux, and it cannot be marked except momentarily. Without the help of a surveyor and a court, neither the landowner nor a citizen walking down the beach has the ability to know exactly where the line lies. This uncertainty means that, as a practical matter, ownership of some part of the beach is effectively shared. Second, the common law establishes that the owner of each oceanfront lot holds easement-like interests in adjacent state-owned land; and, the state holds similar interests in the oceanfront lot. For these two reasons, the legal relationship between the oceanfront owner and the state is more interdependent than it may seem at first. It is much more than the usual neighbor relationship.
Disputes over oceanfront property are often framed as cases of wrongful taking under the Fifth Amendment’s Just Compensation Clause. The Supreme Court has historically applied its standard takings test for determining whether or not a state is liable for the impact of its rules on a landowner’s rights. This Article is the first to examine the question of whether use of this standard test is optimal, or even logical, in cases between states and the owners of oceanfront land. Given the fact that climate change impacts such as sea-level rise are likely to increase rates of conflict along the legal coastline, the potential benefits of a test that takes into account the special relationship between these parties are significant. Support for an alternative test can be found in two sets of common law property rules, the upland rights and public trust doctrines, as well as in a mechanism that nineteenth-century courts used to resolve similar disputes.
This Article examines the varying and often-conflicting views of “affordable housing” of different social and economic groups. It asserts that attempts to deal with affordable housing issues must take into account the shelter, cultural, and economic needs of those populations, and also the effects of housing decisions on economic prosperity. The article focuses on affordable housing goals such as making available an ample supply of housing in different price ranges; attracting and retaining residents who contribute to the growth and economic prosperity of cities; ensuring that neighborhood housing remains available for existing residents, while preserving their cultural values; and providing adequate housing in high-cost cities for low- and moderate-income persons and the overlapping concern for “fair housing” for families of all races and backgrounds.
Thereafter, the Article examines the benefits and detriments of various means of providing more affordable housing, including fair-share mandates, rent control, and inclusionary zoning (including whether that leads to impermissible government takings of private property). It then briefly considers the merits and demerits of federal subsidy programs.
The Article briefly considers conceptual and practical problems in implementing the Supreme Court’s 2015 Inclusive Communities disparate impact holding, and HUD’s 2015 regulations on “Affirmatively Furthering Fair Housing.” Finally, it discusses how the concept of “affordable housing” conflates the separate issues of high housing prices and poverty, and how housing prices might be reduced through removal of regulatory barriers to new construction.
Throughout, the Article stresses that advancing affordable housing goals have both explicit and implicit costs, and that goals often are conflicting. To those ends, it employs economic and sociological as well as legal perspectives.
Wednesday, August 17, 2016
(Photo Credit: The Millennium Report)
As national news is just getting around to reporting, Baton Rouge and its surrounding areas recently experienced tremendous flooding. Large portions of southeast Louisiana were (and many remain) underwater. Our tax law friends over at the Surly SubGroup, specifically Phil Hackney (LSU), summarize the situation nicely:
The devastation stretches from around the Louisiana-Mississippi border all the way over to Lafayette -maybe 100 miles across. This story does a nice job explaining the weather phenomenon that caused this massive flood event. Neighborhoods that have never flooded before in our recorded history are under 4 -6 ft. of water, and some higher than that. Almost the entirety of certain cities are submerged. The last data I had for my area is that 20,000 were displaced and 10,000 in shelters. I expect that number to go up over the week. Even though it has stopped raining, the flood waters cannot drain because the rivers are too high and cannot take runnoff from tributaries.
For those who may find this helpful, this short post talks a little about the property law (specifically related to home mortgage obligations and homeowners’ insurance) that victims of natural disasters like the Louisiana flooding should keep in mind.
MORTGAGE LOAN OBLIGATIONS
After a disaster like the flooding in Louisiana it is important to get in touch with your bank or mortgage servicer to obtain relief. The reason for this is because even if your property is destroyed and/or you can no longer live in the home, the mortgage debt does not go away. It is still owed even if the improvements on the real estate are not longer habitable. If contacted, however, sometimes the mortgage company will give you more time to pay your monthly note and even dispense with late fees or penalties. Also, if the home has been lost due to substantial or total destruction, you’ll want to talk to your mortgage servicer ASAP to prevent or postpone foreclosure on the property. For private loans (i.e., not government-backed) it will be up to the lender and you to work out those details. Be aware that even if the lender gives you a forbearance for a period of time, you will still have to make up those payments later.
For those loans that are FHA-backed, borrowers are sometimes eligible for resources that allow them to remain in the home. The FHA has a disaster relief policy pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act where, if (1) you or your family live in a federally-declared disaster area; (2) you are a household member of someone who is deceased, missing, or hurt because of the disaster; or (3) your ability to pay your mortgage is significantly impacted by the disaster, then your lender cannot foreclose on its mortgage for a 90-day period. The FHA also strongly advises its participating lenders to work with mortgagees who are affected by natural disasters (for example, by taking a deed in lieu of foreclosure if appropriate or allowing only partial payment for a period of time). This is why it’s so important that homeowners in these flooded areas contact their mortgage servicers and let them know that they qualify for FHA Disaster Relief. For additional help in this process, HUD has a counseling hotline to call at 1-800-569-4287 or you can contact HUD's National Servicing Center.
With regard to property insurance, dealing with your insurer can be a long and complicated process after a natural disaster. The important part is knowing what your declaration and your policy states, and whether flood insurance is included (i.e., for damage caused from rising waters). A general homeowner’s policy only covers damage caused by wind, rain, hail etc. Flood damage is insured separately. The exclusions portion of the policy will help in making this determination.
When it comes to actually getting money for lost or damaged property, different insurance policies take different approaches. You can either obtain the replacement cost value of the property (which means the insurance company will give you funds necessary to substitute the damaged or lost property with comparable property) or actual cash value (which is where you receive the cash value of the property that was lost or damaged, minus depreciation over time). The insurance policy will reveal to which you are entitled.
In the case of personal property losses specifically, this is generally referred to as the insurance of “contents” of the home. Documenting these losses are particularly important (so don’t start throwing things away too quickly). Keeping receipts are also critical to submitting a successful claim.
Another important aspect of property insurance is the fact that you are not the only person insured. Your mortgage bank is also listed as an insured on your policy, which means that when the insurance company send the check the bank will also be listed as a payee. Usually your residential mortgage contract requires that you send the check to the bank and then, through an escrow and release process, the funds will be distributed to you to pay contractors to repair the home in tranches. This means that you and your mortgage bank will have to work together to get the repairs completed and your contractors paid. Another option can be to actually pay off the mortgage debt altogether (if there’s a sufficient amount), but that is a decision that the mortgage lender gets to make. As a homeowner you should try to find out how the mortgage lender will use the insurance proceeds because if the mortgage debt is paid off that leaves you with no money to make repairs to your home.
Tuesday, August 16, 2016
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.
Monday, August 15, 2016
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.
Monday, August 8, 2016
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 email@example.com.
Friday, August 5, 2016
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 firstname.lastname@example.org. Candidates are encouraged to submit a statement to our Appointments Committee addressing how they can contribute to the goal of creating a diverse faculty.
Tuesday, August 2, 2016
(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!
Saturday, July 30, 2016
(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!
Thursday, July 21, 2016
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.
Wednesday, July 20, 2016
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 email@example.com 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.
Financial support has been provided by The Peter A. Allard School of Law and the Franklin Lew Innovation Fund.
Tuesday, July 19, 2016
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!
The 2016 CSLSA Board
For more information about CSLSA, visit our website at http://cslsa.us/ or contact a board member.
Monday, July 18, 2016
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"
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.
Saturday, July 9, 2016
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
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
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