PropertyProf Blog

Editor: Stephen Clowney
Univ. of Kentucky College of Law

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Wednesday, March 12, 2014

Tax Reform Proposal Slices Many Real Estate Deductions

The LA Times summarizes the major tax reform proposal floated by Rep. Dave Camp, chariman of the House Ways and Means Committee:

So what did Camp propose? For the vast majority of individuals and corporations, enticingly lower marginal rates of 10% and 25%, plus a substantially increased personal standard deduction — $22,000 for married joint filers, $11,000 for singles. Individuals with annual incomes above $400,000 and joint filers above $450,000 would pay taxes at a marginal rate of 35%.

In exchange, say bye-bye to the mortgage interest deduction in its current form. The $1-million limit on mortgage amounts that qualify for interest deductions would phase down to $500,000 in four annual steps, with no indexing to inflation. This would effectively diminish its value year after year as inflation takes its bites.

The good news on interest deductions: Anyone with an existing mortgage of $500,000 or higher on the date the tax bill takes effect would be grandfathered for the life of the loan. The bad news: Interest write-offs on home equity borrowings, currently limited to $100,000, would be prohibited unless the money was being used to improve your property.

Another set of changes Camp would make: He'd revise the present $500,000 and $250,000 capital gains exclusions for profits on sales of homes by joint filers and single filers, respectively. Under today's rules, you can claim a tax-free exclusion once you've owned and lived in a home for two years out of the preceding five years and you can do so once every two years.

Under Camp's proposal, you'd need to own your house for five out of the preceding eight years to claim a tax-free exclusion and you could exercise this privilege only once every five years. Capital gains exclusions for home sellers with high incomes — $250,000 a year for singles and $500,000 a year for joint filers — would be phased out altogether over a period of years.

Besides these, Camp's tax bill would End all deductions for local property taxes, which he considers subsidies for excessive spending at the local government level.

March 12, 2014 | Permalink | Comments (0) | TrackBack (0)

Our Waterless Future

Tucson

Eric Holthaus interviews the mayor of Tucson, Arizona on the challenges facing the Southwest and how climate change could affect land use in desert regions:

Slate:What are the biggest challenges in creating a 21st-century water policy in Tucson? Is private industry showing resistance? Could climate change lay your best plans to waste?

Rothschild: I think the two biggest challenges are still education and technology. We’re spending $3 million a year in conservation education programs. We've got people in our schools, talking to our elementary kids all the time.

On technology, we won’t be able to solve this problem without more work. But what are those technologies going to be? We recently received an IBM Smarter Cities Challenge grant, where they sent eight of their top engineers out here to work with us to help make our city more efficient. Part of their solution was improved meters that can be read in real time and can be monitored in real time. If there's a water leak, you don't have to wait 30 days to catch it when it shows up on your bill. I can't even imagine what the next technologies are going to be. Tucson has the ability to hopefully lead in developing water technologies for people around the world going through the same issues.

March 12, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 11, 2014

Don't Shoot Trespassing Dogs

In Arkansas, a jury awarded $145,000 to a man whose hunting dog was shot deadwhile he was trespassing on another man's land. From the account:

Newell Gill and three hunting companions, Mackie Edmonds, Lee Edward McGriff, and Darrel McGee, all of Star City, were coon hunting in late 2012 on the North Branch of White River National Refuge in Monroe County when their dogs crossed over onto private property and treed a raccoon.

The dogs had trailed and treed raccoons that were attracted to corn dispensed by deer corn feeders on the landowner’s property, according to Gill’s attorney, Charles Sidney Gibson of Dermott. Gibson said coon dogs cannot be called off once they tree; they have to be pulled off by hand and leashed.

Though there were posted signs on the property, there was no phone number to call for permission to retrieve the dogs. “The hunters rightfully put away their guns and went to retrieve the dogs,” Gibson said. When they did so, they encountered an irate man armed with a rifle.  The man, Frank Newby of Holly Grove, threatened to shoot the dogs and the hunters if they attempted to retrieve the dogs. Over Newby’s objections, Gill retrieved his dog, a 4-year-old treeing Walker named Buck, and leashed him. Newby then ordered Gill to back away from the dog so he could shoot him. Gill refused and the man shot the leashed dog.

“It was a horrible experience for Newel Gill to helplessly watch his leashed dog’s execution then thrash around his feet in agony,” Gibson said. “Gill has nightmares yet about that night.” Gill filed a civil suit against the man and was awarded $145,000. The 5-man, 7-woman Lincoln County jury on Wednesday awarded Gill $100,000 in punitive damages and $45,000 in compensatory damages.

March 11, 2014 | Permalink | Comments (0) | TrackBack (0)

Weisbord on The Connection Between Unintentional Intestacy and Urban Poverty

RWeisbordReid Weisbord (Rutgers) has posted The Connection Between Unintentional Intestacy and Urban Poverty (Rutgers Law Review) on SSRN.  Here's the abstract:

Most people think of estate planning and testamentary freedom as issues for the rich and middle class, but there is much to learn about inheritance patterns in lower economic populations. This Essay examines the connection between urban poverty and decedents who failed to appreciate the consequences of dying intestate (without a will). Unintended intestacy causes wealth to fractionate, a problem of particular concern when a decedent owned real property in which surviving family members reside. For individuals near or below the poverty line, the unexpected loss of an anticipated inheritance by an intended beneficiary can cause devastating social and economic consequences. This is especially true for intended beneficiaries forced to vacate the decedent’s home.

March 11, 2014 | Permalink | Comments (0) | TrackBack (0)

Monday, March 10, 2014

For Boys, Leaving Poverty is Hard

Given the policy focus on breaking up concentrations of poverty, this is certainly depressing:

It’s well known that  living in high-poverty neighborhoods has a significant effect on the mental health of children. Now a new study in the Journal of the American Medical Association offers a nuanced look at what happens after children leave these environments. It highlights a paradox: According to the study authors, led by Harvard professor Ronald Kessler, boys who move into more affluent neighborhoods report higher rates of depression and conduct disorder than their female peers.

Buy why?

The reason for the disparity between boys and girls isn’t exactly pinned down. Kessler points to various factors—community perception, interpersonal skills—as major points of influence: “We had an anthropologist working with us, and the anthropologist went and talked to and watched the kids in the old neighborhoods and the new neighborhoods, and their perception was that when the boys came into the new neighborhood they were coded as these juvenile delinquents,” says Kessler. “Whereas with the girls, it was exactly the opposite. They were embraced by the community—‘you poor little disadvantaged thing, let me help you.’”

March 10, 2014 | Permalink | Comments (0) | TrackBack (0)

Fraley on Labor, Waste, and the Evolution of Property

FraleyjJill Fraley (Washington and Lee University) has posted Finding Possession: Labor, Waste, and the Evolution of Property (Capital Law Review).  Here's the abstract:

Although possession has long been intimately linked to labor, recent historical work on land claims during the sixteenth and seventeenth centuries suggests that the clash of divergent legal cultures of possession drove the two apart. This clash yielded an American concept of possession much more deeply connected to industrialization than the traditional understanding of labor. By providing evidence of how our concept of labor was industrialized, this article questions the outcomes in modem possession cases, particularly as they impact development and environmental preservation in rural areas.

March 10, 2014 | Permalink | Comments (0) | TrackBack (0)

Friday, March 7, 2014

Couple Finds $10 Million Worth of Gold Coins in Old Tin Can

 Finders Keepers?

A senior expert at the firm representing a Northern California couple who discovered buried gold coins worth $10 million says he has not received any credible claims to the huge find and does not expect to.

Numerous theories have cropped up since the discovery of the Saddle Ridge Hoard was announced last week. One of them, that the coins were tied to a 1901 U.S. Mint theft in San Francisco, appeared to be debunked Tuesday by the U.S. Mint itself.

“We do not have any information linking the Saddle Ridge Hoard coins to any thefts at any United States Mint facility,” U.S. Mint spokesman Adam Stump said in a statement, adding that lawyers have looked into the matter.

The Northern California couple, only identified as John and Mary by Kagin's, had walked the path on their gold country property for years before they spotted the edge of a rusty can peeking out of the moss in February 2013. When the lid cracked off, they found dirt-encrusted coins, some in better condition than those on display in museums.

The Saddle Ridge Hoard, named for the space on their property, may be the most valuable cache ever found in North America, with an estimated value of more than $10 million. If you melted the coins, the gold alone would be worth $2 million, said David Hall, co-founder of Professional Coin Grading Services in Newport Beach, who recently authenticated them.

March 7, 2014 | Permalink | Comments (0) | TrackBack (0)

The Most Terrifying Lawyer Commercial on the Interweb

Because its Friday and I love all things Pittsburgh (and, yes, this is real):

March 7, 2014 | Permalink | Comments (0) | TrackBack (0)

McLaughlin on Perpetual Conservation Easements in the 21st Century

NancymNancy McLaughlin (Utah) has posted Perpetual Conservation Easements in the 21st Century: What Have We Learned and Where Should We Go from Here? (Utah Law Review) on SSRN.  Here's the abstract:

The public is investing billions of dollars in conservation easements, which now protect an estimated 40 million acres throughout the United States. But all is not well. Uncertainties in the law and abusive practices threaten to undermine public confidence in and the effectiveness of conservation easements as a land protection tool. This short article is part of a series of articles published in the law review discussing conservation easements, with a focus on what we have learned thus far and where we should go from here. This article sets the stage by describing the dramatic growth in the use of conservation easements, the various laws that impact easement creation and administration, a timeline of important legal and policy developments, and the recent surprising lack of certainty and consensus regarding what it means to protect land “in perpetuity” or “forever” with a conservation easement. The article concludes by discussing how the perpetuity issue might be productively resolved.

March 7, 2014 | Permalink | Comments (0) | TrackBack (0)

Thursday, March 6, 2014

Why Don’t the Japanese Value Their Old Homes?

A new Freakonomics podcast investigates the surprisingly disposable nature of Japanese homes:

It turns out that half of all homes in Japan are demolished within 38 years — compared to 100 years in the U.S.  There is virtually no market for pre-owned homes in Japan, and 60 percent of all homes were built after 1980. In Yoshida’s estimation, while land continues to hold value, physical homes become worthless within 30 years. Other studies have shown this to happen in as little as 15 years.

Does this make  sense? Not according to Alastair Townsend, a British-American architect living in Japan, who is perplexed — and awestruck — by the housing scenario there: "The houses that are built today exceed the quality of just about any other country in the world, at least for timber buildings. So there’s really no reason that they should drop in value and be demolished."

Fascinating stuff.

March 6, 2014 | Permalink | Comments (0) | TrackBack (0)

White & Reid on Bankruptcies and Loan Modifications in the Foreclosure Crisis

Alan White (CUNY) & Carolina Reid (Berkeley - City Planning) have posted Saving Homes? Bankruptcies and Loan Modifications in the Foreclosure Crisis (Florida Law Review) on SSRN.  Here's the abstract:

Do homeowner bankruptcy filings work to delay or prevent home foreclosures, and how do they compare to voluntary loan modifications specifically targeted to mortgage relief? The 2007–2012 financial crisis provides a unique opportunity to assess whether bankruptcy can help homeowners avoid the negative consequences of over-indebtedness and mortgage default. This empirical study analyzes a large, loan-level mortgage dataset to determine which variables are associated with delinquency and bankruptcy filing, and in turn, whether filing bankruptcy or receiving a loan modification measurably influences subsequent loan outcomes (e.g., foreclosure sale, prepayment, or default cure). Overall, we find that bankruptcy filings delay foreclosures but are not generally effective in curing payment defaults, especially when compared to modifications negotiated outside of bankruptcy, which are highly effective. We also find, consistent with prior research, that variations in state bankruptcy and foreclosure law greatly influence debtor outcomes from one state to another. Bankruptcy filing is more effective in states with nonjudicial foreclosure and limited homeowner protections.

March 6, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 4, 2014

Zoning By Any Other Name, Houston Edition

Houston is the only city of any size in America without zoning regulations.  But land use regulation continues to creep into the innerworkings of the Bayou City. Elizabeth Rhodes highlights the newest expanaion of historic districts:

Houston City Council's voted to designate the Starkweather subdivision of Independence Heights as a historic district. This marks only the second time this designation has been awarded to a neighborhood outside the 610 Loop.  The subdivision, which includes only 25 lots on E. 31st 1/2 St. between Yale and Cortlandt, features classic 1930s-era homes and is located about two blocks north of the 610 Loop. 

Designating a neighborhood as a historic district isn't just for show. Property owners in these districts are limited in how they may alter the fronts of their homes and historic district houses are far more difficult to demolish as they are subject to the city's preservation rules. [...] There are now 21 historic districts in Houston, including Starkweather.

(HT: Matt Festa)

March 4, 2014 | Permalink | Comments (0) | TrackBack (0)

Map of the Day: Russia's Fear

The map states: "Since 1989 (red line) pro-EU-forces have moved 1500 km eastward (yellow line).

Russia

March 4, 2014 | Permalink | Comments (1) | TrackBack (0)

Roark on Homelessness

RoarkMarc Roark (Savannah) has posted Homelessness at the Cathedral on SSRN.  Here's the abstract:

This Article argues that legal restraints against homeless persons are resolved by applying certain nuisance-like approaches. By drawing on nuisance restraints that adopt property-based and social-identity information, courts and decision-makers choose approaches that create conflict between homeless identities and adopted social identities. These approaches tend to relegate the social choice of whether to tolerate homeless persons to one of established social order (property) or broadly conceived notions of liberty (constitutional rights or due process rights). This Article argues for a broader conception of social identity, which may force parties to internalize certain costs of action, tolerate certain uses, or abate the full range of property rights that the law would otherwise allow in different social settings. Considering the question of “undesirable” uses of space -- both on private and public land -- helps articulate a narrative of property that moves beyond the rhetoric of economics-bound entitlements and affords a broader, more honest characterization. Conceived in this way, property entitlements represent information about how society defines, refines, enforces, and rejects its collective identity through the legal recognition of property entitlements.

March 4, 2014 | Permalink | Comments (0) | TrackBack (0)

Monday, March 3, 2014

The Role of Architecture in the Films of Steve McQueen

From the LA Times:

"12 Years a Slave," at once McQueen's most ambitious and most conventional movie, is even more suggestive in its use of architecture. Fassbender is back as a brutish Southerner, but the film rarely leaves Chiwetel Ejiofor's Solomon Northup as he is lured from freedom in New York state and sold into slavery in Washington, D.C.

Beginning with an early shot that pans up from Northup's face and through dozens of layers of bricks before ending with a shot of the Washington skyline — he is in for it, that scene says — the movie takes up architectural symbols in a sustained and strategic way.

This is most obviously true in the way the porches of the slave owners' houses tower over Northup like looming Parthenons of white privilege. It is most persuasively true of the pair of structures that Northup helps to build and that become a visual way to track his slow path back to freedom.

First comes a slave shack that he works to frame and that stands in the background, roofless, as he hangs from a tree after barely surviving a lynching attempt. Next is what turns out to be a gazebo on the grounds of a second plantation. The gazebo is roofless as well for scene after scene, until Northup meets and tells his story to a sympathetic abolitionist carpenter played by Brad Pitt.

March 3, 2014 | Permalink | Comments (0) | TrackBack (0)

Top SSRN Downloads

SsrnIn honor the beginning of the month here are the most downloaded property articles from SSRN over the last 60 days:

 

1.  [286 downloads]  An Economic Theory of Fiduciary Law
      Robert H. Sitkoff (Harvard)

2. [136 downloads]  Does the Endangered Species Act Preempt State Water Law?
      Robin Kundis Craig (Utah)

3.  [127 downloads]  The Law and Economics Approach to Property
      Daniel H. Cole (Indiana)

4.  [100 downloads]  Property in the Bible
      Geoffrey P. Miller (NYU)

5.  [77 downloads]  Zombie Mortgages, Real Estate, and the Fallout for the Survivors
      David P. Weber (Creighton)

6.  [72 downloads]  Demandas De Propiedad Entre Cuba Y Los Estados Unidos. Una Revisión De La Literatura. (Property Claims Between Cuba and The United States. A Literature Review.)
      Jesus V. Bu (Independent)

7.  [70 downloads]  Fracking Bans, Taxation, and Environmental Policy
      Robert D. Cheren (Case Western)

8.  [69 downloads]  Foreclosure and the Failures of Formality, or Subprime Mortgage Conundrums and How to Fix Them
      Joseph William Singer (Harvard)

9.  [68 downloads]  Property's Structural Pluralism: On Autonomy, the Rule of Law, and the Role of Blackstonian Ownership
      Hanoch Dagan (Tel Aviv)

10.  [66 downloads] New York State Commercial Landlord - Tenant Law and Procedure: A Primer - Part I
      Gerald Lebovits (Columbia) & Michael B. Terk (Independent)

March 3, 2014 | Permalink | Comments (0) | TrackBack (0)

Friday, February 28, 2014

Should Michigan Sell Its Water to California?

A question worth asking:

It’s almost unfair how the Great Lakes area’s bountiful snowfall this winter will only compound the region’s enjoyment of an unequaled 21 percent of the world’s supply of fresh surface water, while places like California, the Southwest, the Southeast and even the Great Plains continue to struggle with near- and long-term water supply challenges.

In an era of increasingly stressed water systems and still-growing populations around the world, the aqueous blessings of the Upper Midwest, especially those fulsome bodies of water surrounding the peninsula amoena of Michigan, will only be envied — and coveted — even more.

[...] Some believe that Michigan hasn’t been doing a sufficient job of economically leveraging its own singular position at the epicenter of the world’s largest fresh-water supply.

[...] One possibility is blocked for now. A five-year-old agreement between the United States and Canada called the Great Lakes-St. Lawrence River Water Resources Compact ensures that the lakes’ waters won’t be shipped wholesale from the region even if the temptation to do so presents itself to one state or province or another. That’s exactly what happened in the late 1990s when Ontario moved toward sending bulk containers of Lake Superior water to Asia.

But the expectation may grow that in an increasingly thirsty world, those who benefit most from the Great Lakes should figure on sharing their fresh-water fortune with the rest of America and maybe beyond. Nothing says the Compact couldn’t be modified or overturned by future political pressures.

February 28, 2014 | Permalink | Comments (2) | TrackBack (0)

Why is North Up on Maps?

Upside

Writing for Al-Jazeera America, Nick Danforth sorts through some cartographic history:

There is nothing inevitable or intrinsically correct — not in geographic, cartographic or even philosophical terms — about the north being represented as up, because up on a map is a human construction, not a natural one. Some of the very earliest Egyptian maps show the south as up, presumably equating the Nile’s northward flow with the force of gravity. And there was a long stretch in the medieval era when most European maps were drawn with the east on the top. If there was any doubt about this move’s religious significance, they eliminated it with their maps’ pious illustrations, whether of Adam and Eve or Christ enthroned. In the same period, Arab map makers often drew maps with the south facing up, possibly because this was how the Chinese did it.

[...]  The north’s position was ultimately secured by the beginning of the 16th century, thanks to Ptolemy, with another European discovery that, like the New World, others had known about for quite some time. Ptolemy was a Hellenic cartographer from Egypt whose work in the second century A.D. laid out a systematic approach to mapping the world, complete with intersecting lines of longitude and latitude on a half-eaten-doughnut-shaped projection that reflected the curvature of the earth. The cartographers who made the first big, beautiful maps of the entire world, Old and New — men like Gerardus MercatorHenricus Martellus Germanus and Martin Waldseemuller — were obsessed with Ptolemy. They turned out copies of Ptolemy’s Geography on the newly invented printing press, put his portrait in the corners of their maps and used his writings to fill in places they had never been, even as their own discoveries were revealing the limitations of his work.

(HT: Andrew Sullivan)

February 28, 2014 | Permalink | Comments (0) | TrackBack (0)

Butler on The Resilience of Property

Butler-26Lynda Butler (William & Mary) has posted The Resilience of Property (Arizona Law Review) on SSRN.  Here's the abstract:

Resilience is essential to the ability of property to face transforming social and environmental change. For centuries, property has responded to such change through a dialectical process that identifies emerging disciplinary perspectives and debates conflicting values and norms. This dialectic promotes the resilience of property, allowing it to adapt to changing conditions and needs. Today the mainstream economic theory dominating common law property is progressively being intertwined with constitutionally protected property, undermining its long-term resilience. The coupling of the economic vision of ordinary property with constitutional property embeds the assumptions, choices, and values of the economic theory into both realms of property without regard for property’s other relational planes.

A real-life theory of property — one based on a theory-practice link — sees the property landscape as a function of interactions among possible property arrangements and other perspective-based systems, including natural systems. Understanding property as a function of those relational planes is important to preserving its resilience. Research on the dynamics of change in social-ecological systems provides important insight into how institutions, like property, that manage resources can promote resilience. The mainstream economic theory lacks the openness and interdisciplinary inclusion needed to handle complex disturbances, ignoring conflicting perspectives and alternative visions that have played a significant role in the evolution of property. Often presented as involving either/or choices, the mainstream theory takes a singular perspective that overlooks important dialectical interactions. As subsystems of larger natural systems, complex societies need a resilient property system open to different perspectives and new knowledge if they are to handle the serious challenges of the future.

February 28, 2014 | Permalink | Comments (0) | TrackBack (0)

Thursday, February 27, 2014

Akkermans on The Comparative Method in Property Law

AkkermansBram Akkermans (Maastricht) has posted The Comparative Method in Property Law on SSRN.  Here's the abstract:

Property law systems diverge and there are many reasons for this. This does not only apply to common law and civil law systems (or Nordic or mixed legal systems), but basically for all systems of property law. Property lawyers can approach these differences with different methods. One of these methods is the comparative method, of which the functional method of comparative law is the most well known and used. That method is, depending on the ‘agenda’ of the comparative lawyer, used to find similarities or to find differences. Generally the method is used to (i) improve the own national legal system, (ii) to provide an overview of systems, (iii) to understand vertical dynamics, such as the influence of EU law on national property law, or (iv) to provide the basis to develop something completely new, such as a Common European Sales Law.

Comparative lawyers compare equivalents in the systems they are investigating. They find these equivalents generally by looking for functionally similar concepts or institutions. For example to compare the right of ownership in civil law to the fee simple in common law as these are both primary rights. The danger of using this method is that, depending on the viewpoint of the comparative lawyer, it is very easy to find similarities and differences. It is therefore important for the comparative lawyer to make his or her intentions explicit. Although the comparative method is losing ground to other approaches, which enable a more normative approach to law, it remains of relevance, especially in light of the vertical dynamics that exist in multi-level systems such as the European Union.

February 27, 2014 | Permalink | Comments (0) | TrackBack (0)