Friday, June 23, 2017
Zach Arnold (DC lawyer) has posted Preventing Industrial Disasters in a Time of Climate Change: A Call for Financial Assurance Mandates (Harvard Environmental Law Review) on SSRN. Here's the abstract:
In the current era of accelerating climate change, rising sea levels, and increasingly extreme weather, coastal industrial disasters pose a large and growing risk to society. The private sector and public officials are both failing to adequately respond to this risk, and the familiar regulatory tools in this context, such as design mandates and adaptation subsidies, have significant drawbacks. This paper proposes a novel policy framework to prevent coastal industrial disasters. I argue that financial assurance requirements (FAMs), such as insurance mandates, can induce coastal industry to adapt to the coastal impacts of climate change and can ensure that the public will be fully compensated for any disasters that nonetheless occur. FAMs can mobilize the considerable expertise of third-party financial assurance providers and provide efficient incentives for private adaptation. Moreover, they are relatively simple to implement, making them especially suitable for state, regional, and municipal policymakers facing locally concentrated climate impacts, tight resources, and federal gridlock. FAMs are a promising remedy for a significant and increasingly urgent danger.
Tuesday, May 9, 2017
Sunday, May 7, 2017
Fresh from Cambridge University Press, property law scholar and friend of the blog Ilya Somin (George Mason) recently published a co-edited book titled Eminent Domain: A Comparative Perspective. The work analyzes the use and abuse of eminent domain in a number of jurisdictions, including Germany, Taiwan, the US, South Korea, and a variety of developing nations. The book came about as a result of a conference hosted by the Korea Development Institute (one of South Korea's leading research centers), as the use of eminent domain in South Korea has attracted a great deal of attention from law and policy makers across the globe.
Monday, May 1, 2017
Joe Singer (Harvard) has posted Indian Title: Unraveling the Racial Context of Property Rights, or How to Stop Engaging in Conquest (Albany Government Law Review). Here's the abstract:
This article discusses the racial injustice faced by Native Americans, with whom land titles in the United States originated with. The author argues it is vital to interpret the Supreme Court cases of the 19th century that correctly defined Indian title, and to honor the property rights of Indian title just as we do the "fee simple of the whites."
Monday, April 10, 2017
This Article offers a new theory of secured debt that aims to answer fundamental questions that have long puzzled bankruptcy scholars. Are security interests property rights, contract rights, or something else? Why do secured debt holders enjoy a priority right that, in bankruptcy, requires them to be paid in full before other debt holders recover anything? Should we care that secured credit creates distributional unfairness when companies cannot pay their debts? Because scholars have yet to provide a satisfactory account of security interests, these questions remain unanswered.
The Article argues that security interests are best understood as a form of “limited liability property.” Limited liability — the privilege of being legally shielded from liability that would normally apply — has long been considered the quintessential feature of equity interests. But limited liability is in fact a critical feature of security interests as well. When examined closely, security interests enable their holders to assert several privileges of ownership without bearing any of ownership’s concomitant burdens.
In seeking to explain security interests, the Article offers a comprehensive account of capital investment more generally, systematically examining the various interests held in corporate capital structures. Though critics have bemoaned the inequity associated with the priority right in bankruptcy — a secured debtholder can get all its assets back in the event of a bankruptcy while unsecured creditors like unpaid employees get nothing — this priority right is an inevitable consequence of recognizing security interests as a form of direct ownership. The real problem lies in the scope of secured debt holders’ limited liability protections. While equity holders enjoy limited liability, in return they are paid only after other claims in the event of insolvency. Secured lenders make no such tradeoff, and are thus arguably over-protected. Understanding security interests as limited liability property, then, offers a more elegant way to understand capital investment at the theoretical level while also helping us recognize when and where our system of secured debt needs reform.
There is a clear tension in the law between exercises of state police power in land-use regulation, including zoning laws, on the one hand, and takings under the Fifth Amendment on the other. Courts have struggled to find a dividing line between the two, but for their efforts we are left only with is a disjointed array of legal tests, each one as flawed as the next. Legal theorists, for their part, must shoulder some of the blame—no single theory can identify the point at which community need outweighs private property rights. Even well-developed theories thus fail to translate into practical application. But this Article is resolved to bridge that gap.
This Article presents a novel theory that provides a unified normative framework for evaluating government interference with private property. It seeks to identify the tipping point at which private property rights must give way to the needs of the community at large. This approach, which I refer to as Property’s Tipping Point, is a burden-shifting framework that accommodates competing theories of property. It builds on landmark Supreme Court cases to provide a unified standard for courts to apply in resolving cases of regulatory takings and exactions.
The approach presented in this Article has both a substantive and a procedural component. It develops two tests that work dynamically to identify the point where community need trumps owner autonomy: the indispensability of needs and the generality of action. The former requires that any government interference with private property is designed to promote community prosperity. The latter test—the generality of action—confines the government to the boundaries of the rule of law. It is only by passing these two tests that a government authority may reach Property’s Tipping Point.
Thursday, March 9, 2017
Incomplete takings are vital and extremely common. Yet, they present unique challenges that cannot be resolved by standard rules of eminent domain. In particular, incomplete, or partial, takings may result in the creation of suboptimal parcels, and even unusable and unmarketable ones. Additionally, partial takings create nettlesome assessment problems that do not arise when parcels are taken as a whole. Finally, incomplete takings engender opportunities for inefficient strategic behavior on the part of the government after the partial taking has been carried out. Current partial takings jurisprudence fails to resolve these problems, and, in some instances even exacerbates them.
In this Article, we offer an innovative mechanism that remediates the shortcomings of extant partial takings doctrines. Specifically, we propose that whenever the government engages in a partial taking, the affected property owner should be given the power to force the government to purchase the remainder (or, untaken part) of the lot at fair market value. Exercise of this power by the private owner would lead to the reunification of the land in its pre-taking form, while transferring title to the entire parcel to a new single owner, namely the government.
Implementation of our proposal would yield several important benefits: First, it would allow for the preservation of the current configuration of parcels, enabling them to remain highly usable and marketable. Second, it would lower the cost of determining compensation for private property owners and thereby of the adjudication process as a whole, in those cases in which private owners choose to exercise their entitlement to sell the remainder to the government. Third, it would significantly reduce the ability of the government to behave strategically and externalize costs on private property owners. Fourth, it would create opportunities for more efficient planning and land use by the government as the government would be free to re-parcel, develop and re-sell the parcels sold to it.
Thursday, January 12, 2017
Privacy and property rights are tricky subjects for a variety of reasons. One reason is that they have a unique relationship with each other, and this Article focuses on one of those areas of intersection—that of air rights and invasion of privacy. This is a timely topic due to the advent of drones, and this Article will argue that drone surveillance constitutes common law trespass and that any statute or regulation that permits such activity is in derogation of common law and so should be subject to particularly careful thought and consideration.
This is not as straightforward a thesis as one might perhaps think because both property and privacy rights have a murky past and have gone through iterative formulations as society has sought to achieve the right balance between the public and private spheres. Privacy has historically focused on expectations of privacy, and property rights have traditionally provided such expectations, but the legally recognized nature of each has not changed over time to keep pace with technological innovation. This has led to a situation where the kinds of rights and causes of action that have traditionally protected individuals no longer suffice in a variety of circumstances.
In particular, the use of drone technology to engage in sophisticated surveillance presents significant challenges to our existing legal framework. Part I of this Article examines the history of privacy law in some detail, and Part II does the same with respect to the common law of airspace property rights. When these two areas of the law are examined in tandem, it becomes apparent that drone surveillance violates rights that society generally wants to protect and that society has historically protected. That protection, however, is now lacking. There is some reason for the failure of the law to keep up with this type of new technology, and Part III examines the historical “aircraft exception” that many may now believe justifies the law’s acquiescence in the face of drone surveillance. Ultimately, though, this Article concludes that this common law exception is not applicable to drones and that, as such, the law should adapt to protect the public from drone surveillance. Part IV concludes this analysis by making a number of recommendations that state and federal legislatures and various administrative agencies would do well to consider when passing laws and promulgating rules regarding drone technology.
Friday, December 30, 2016
Local governments typically insure themselves against all kinds of losses, from property damage to legal liability. For small- and medium-sized governments, this usually means purchasing insurance from private insurers or participating in municipal risk pools. Insurance for regulatory takings claims, however, is generally unavailable. This previously unnoticed gap in municipal insurance coverage could lead risk averse local governments to underregulate and underenforce existing regulations where property owners threaten to bring takings claims. This seemingly technical observation turns out to have profound implications for theoretical accounts of the Takings Clause that focus on government regulatory incentives. This Article explores the impact of insurance on land use regulations. In the process, it reveals important insights about public insurance more generally and offers a novel explanation for the burgeoning land use innovation in cities compared to the relative stagnation of land use in the suburbs. It concludes by suggesting new ways for promoting local land use regulations that risk generating takings claims.
Friday, November 11, 2016
Kellen Zale (Houston) has posted When Everything is Small: The regulatory Challenge of Scale in the Sharing Economy (San Diego Law Review) on SSRN. Here's the abstract:
The sharing economy — the rapidly evolving sector of peer-to-peer home-sharing and ride-hailing transactions facilitated by platforms like Airbnb and Uber — offers the potential for economic growth, greater sustainability, and expanded access for underserved groups. But the massive number of small-scale activities facilitated by these platforms is also resulting in negative cumulative impacts and exposing regulatory fractures, from the loss of long-term rental housing to discrimination against protected classes to increased burdens on public infrastructure.
This Article contends that scale is a defining feature and fundamental challenge of the sharing economy. Small may be beautiful, but when everything is small, the regulatory challenge is immense. Small-scale activities that once fit the criteria for light or no regulation are occurring at scales at which non-regulation makes little sense. As the sharing economy becomes an increasingly large segment of the public accommodations and transportation markets, the traditional ways we distinguish between activities that we should regulate and those we treat with regulatory leniency no longer fit. Existing regulatory systems, from civil rights and environmental law to consumer protection and tax law, do not map neatly onto the configuration of scale in the sharing economy. This regulatory misfit threatens to result in inequitable and discriminatory outcomes across the sharing economy.
Effective governance of the sharing economy requires a more complete understanding of the role of scale. This Article investigates the implications of scale in the sharing economy, focusing on the prominent sectors of home-sharing and ride-hailing. The Article unpacks how massive numbers of home-sharing and ride-hailing activities are producing negative cumulative impacts and exposing regulatory fractures, which threaten to undermine a range of important public policies — including affordable housing, civil rights, and consumer protection — and considers possible legal regimes for responding to scale.
Sunday, October 30, 2016
Alan C. Weinstein (Cleveland-Marshall) has posted Regulation of Religious Uses Under the Religious Land Use and Institutionalized Persons Act on SSRN. Here's the abstract:
This article examines how the courts have applied the Religious Land Use & Institutionalized Persons Act (RLUIPA) in the context of conflicts between religious "uses," such as churches, and local land use regulation. In RLUIPA, Congress has attempted to empower churches when they choose where and how they build a sanctuary or assemble for worship and to restrain local governments when they seek to apply zoning or landmark regulations to those churches. In this environment, local governments face a difficult task in seeking to avoid RLUIPA claims and in evaluating their likelihood of prevailing if challenged. After discussing how the courts have ruled on these conflicts, the article notes how local officials can take steps to lessen the likelihood of a potential claim, including: a comprehensive review of the treatment of religious institutions in its land use codes, both substantively and procedurally; training officials and employees to be sensitive to religious differences; and recognizing that land use applications from, and enforcement of regulations against, religious institutions must be handled with special care.
Jennifer Anglim Kreder (Northern Kentucky) has posted Analysis of the Holocaust Expropriated Art Recovery Act of 2016 (Chapman Law Review) on SSRN. Here's the abstract:
This article introduces readers to the problems facing Holocaust victims and their heirs today as they seek to recover art stolen during the Nazi era. It provides essential history beginning with Hitler’s rise to power so that readers can understand the Holocaust Expropriated Art Recovery Act (hereinafter the “HEAR Act”), a bipartisan piece of legislation currently under consideration by a Senate subcommittee. Part I provides the essential pre-war and WWII-era history. Part II informs readers about the essential decisions a plaintiff must make before filing suit. Part III analyzes the key cases and legal developments concerning Nazi-looted art recovery since 1998. Part IV analyzes the HEAR Act. Part V concludes that the HEAR Act is a positive development that would allow survivors and their heirs a fair chance at recovering their stolen art.
Monday, October 24, 2016
Nancy Leong (Denver) has posted The First Amendment and Fair Housing in the Sharing Economy (Ohio State Law Journal) on SSRN. Here's the abstract:
The sharing economy — a marketplace made up of businesses that profit by connecting providers of goods and services with users of those goods and services — challenges us to reevaluate our anti-discrimination laws. This Essay considers one such challenge: how should public accommodation laws such as Title II of the Civil Rights Act of 1964 and the Fair Housing Act apply to the housing sector of the sharing economy? Such laws, the Essay explains, should apply in full to the housing sector. Moreover, legislators should act to remove the current statutory exemption for landlords who rent a small number of housing units and live on the premises from which they rent. While some might raise concerns that closing the exception will infringe upon small-scale landlords’ First Amendment right to free association, such concerns have no doctrinal basis. Moreover, closing the exception will in fact have the effect of advancing interests related to both freedom of speech and of association, particularly with respect to the people of color whom public accommodation laws were originally designed to protect.
Thursday, September 22, 2016
Daniel Schaffzin (Memphis) has posted (B)Light at the End of the Tunnel? How a City's Need to Fight Vacant and Abandoned Properties Gave Rise to a Law School Clinic Like No Other (Washington University Journal of Law & Policy) on SSRN. Here's the abstract:
Over the course of the last two decades, intensified by the mortgage foreclosure crisis of the late 2000s, an epidemic of vacant and abandoned properties has inflicted devastation on people, neighborhoods, and cities across the United States. Though surely coincidental, the same time period has seen the emergence of experiential learning coursework, long operating at the periphery of legal education, as a centerpiece of the law school curriculum. In Memphis, the temporal convergence of these two phenomena has acted as a catalyst for the creation of a law school clinical course in which students learn and work under direct faculty supervision to abate the public nuisance presented by neglected properties. This Clinic is distinctive for a number of reasons, not the least of which is its singular client: the City of Memphis itself.
In this article, the University of Memphis School of Law’s Director of Experiential Learning, one of the two founders and codirectors of the Neighborhood Preservation Clinic, asserts the efficacy of the Clinic’s role in training future lawyers and providing zealous legal representation to the City in lawsuits against the owners of blighted properties. For context, the article first considers the rise and devastating effects of the nationwide vacant and abandoned property epidemic, the statutory authority available in Tennessee to pursue recourse against the owners of such property, and the broader blight-fighting strategy being employed by the City within which the decision to launch the Clinic was made. The article then examines the Clinic’s multilayered design and articulates the benefits that the Clinic has conferred upon its students, the Law School and the City of Memphis. The article concludes that the Neighborhood Preservation Clinic offers a government representation model for in-house law school clinics that stays true to traditional clinical pedagogy while honoring clinical legal education’s two-pillared historical mission to effectively prepare students for practice and to work in advancement of social justice and public interest outcomes.
Saturday, September 17, 2016
What if animals could own property? This Article presents a thought experiment of extending our anthropocentric property regime to animals. This exercise yields new insights into property law, including what appear to be biological underpinnings to what is widely assumed to be the distinctly human system of property. It also reveals that government and private actors alike have created a vast network of functional property rights for animals. The effects of a property rights regime for animals extends beyond property law: it would serve to improve the plight of animals, especially wildlife, by counting historic exclusion of animals from property allocations.
Property law may be a human codification of ingrained biological principles, common among species. Human governance of land, partially reflected by property law and observation of social attitudes to property, may, in fact, better theorized as animal in nature. Scientific findings suggesting that animals engage behavior mirroring that which establishes property ownership among humans. Species ranging from bees to jaguars undertake actions to acquire and protect land, which, when undertaken by people, forms the legal basis of property ownership.
Initial entitlements of American land excluded customary animal users, then afforded subsequent human landowners with the right to develop and exclude, which produced profoundly negative effects on species conservation. In response, a variety of governance strategies have emerged to protect wildlife, most federal statutes weakening property rights. In fact, law has already partially accommodated the idea of animals as property owners. Examining a variety of Constitutional, statutory, and common law doctrines suggests that animals already hold a variety of functional property rights, including ownership of hundreds of millions acres of land.
This Article is the first to analyze a property-rights approach to animal welfare and species conservation. Benefits of this approach, relative to existing efforts to imbue animals with human rights, include its bipartisan nature and foreseeable endpoint. Animal property rights would not require a massive shift in societal norms or uncompensated property redistributions. Indeed, this approach would likely improve animal welfare while also strengthening existing property rights, lessening the need for statutory controls on land uses, and updating law to harmonize with prevailing norms regarding animals’ place in society.
Tuesday, September 13, 2016
In the past several years the growth of virtual property in today’s economy has been explosive. The everyday use of virtual assets ranging from Twitter and Facebook to YouTube and virtual world accounts is nearly absolute. Indeed, by one account Americans check social media over 17 times per day. Further, a growing number of savvy virtual entrepreneurs are reporting incomes in the six and seven figure range, derived solely from their online businesses. Nevertheless, although the commercial world has come to embrace these newfound markets, commercial law has done a poor job of keeping up. Scholars have argued that laws governing everything from taxation, to bankruptcy, to privacy rights have not kept pace with our ever-changing virtual world. And nowhere is this truer than in the law of secured credit. Doubtlessly virtual property has come to represent significant wealth and importance, yet its value as a source of leveraged capital remains, in large part, untapped. This unrealized potential is not without good reason; the law — specifically Article 9 of the UCC and the law of property more broadly — suffers from a number of deficiencies and anomalies that make the use of virtual property in secured credit transactions not only overly complex and expensive, but almost entirely untenable. This Article shines light on these shortcomings, and, in doing so, advances a number of guiding principles and specific legislative recommendations, all geared toward a reformation of the law of secured credit in virtual property.
Sunday, September 11, 2016
Jonathan Zasloff (UCLA) has posted The Price of Equality: Fair Housing, Land Use, and Disparate Impact (Columbia Human Rights Law Review) on SSRN. Here's the abstract:
What happens when local government policies run head-on into federal civil rights laws? Nowhere does this question assume greater importance than with land use and fair housing, yet in the nearly half-century since the passage of the Fair Housing Act (FHA), courts and commentators have skirted the question. With the Supreme Court’s recent decision in Inclusive Communities Project v. Texas, the most significant fair housing decision in the nation’s history, they can no longer do so. This Article represents the first sustained effort to show how the FHA affects land use, the most important power that cities have under American localism. The Supreme Court held for the first time that the FHA allows disparate impact liability, and outlined when such disparate impact cases can be brought. But it left many crucial questions unanswered, and this Article attempts to fill the gap. It concludes that when cities restrict affordable and multifamily housing, which often has a disparate impact on people of color, zoning ordinances must withstand intermediate scrutiny in order to be sustained. Courts must balance local policies with demands for inclusion: sometimes those policies will triumph, but in many instances they will not, for they rest on weak empirical or legal foundations, or they can be addressed in less restrictive ways. The Article sets forth a series of the most common scenarios and justifications for exclusionary zoning, and seeks to show that such justifications have far less purchase than is commonly supposed. The FHA comes nowhere close to abolishing zoning, but it does insist that local zoning must no longer exclude racial minorities, and the Court’s decision makes clear how fair housing advocates can and should use the law to fight such exclusion. If localities no longer have the discretion to exclude people of color, then that is the price of equality.
Tuesday, September 6, 2016
Gregory Stein (Tennessee) has posted Chinese Real Estate Law and the Law and Development Theory: Comparing Law and Practice (Florida State Journal of Transnational Law & Policy) on SSRN. Here's the abstract:
China did not adopt a modern Property Rights Law until 2007, which means that most modern real estate development occurred before there was a comprehensive property law to govern it. Moreover, business conventions in China frequently diverge from published laws, and the rules that professionals follow do not always comply with legal requirements. This article addresses how real estate professionals in China contend with these legal inconsistencies and uncertainties. It also asks whether China is disproving the traditional law and development model, which holds that transparent property and contract laws are a prerequisite to robust economic development.
Part II introduces some of the common Western misconceptions about Chinese real estate law and business. Part III presents examples of how three specific Chinese business practices have come to differ in significant ways from Chinese real estate law. Part IV concludes by noting the ways in which China calls into question the widely accepted model of law and development.
Monday, September 5, 2016
Gregory Alexander (Cornell) has posted Five Easy Pieces: Recurrent Themes in American Property Law (University of Hawaii Law Review) on SSRN. Here's the abstract:
The title of my article, "Five Easy Pieces," may not resonate with those of you who are too young to remember Jack Nicholson as a budding young movie star cut out of the James Dean mold. For those who do remember, it is, of course, the title of one of Nicholson's early (and, to my mind, greatest) movies. Jack's five easy pieces were piano pieces, easy for him to perform, less so for others. There was a certain irony about the word "easy" in the title. The irony lay not only in the fact that just about everyone else consider those pieces difficult, but, more deeply, because those piano pieces were the only pieces of the life of Bobby Dupea, the character whom Jack portrayed, that were easy for him. Life as a whole, the big picture, was one great, almost impossible challenge for him.
My five easy pieces have their own ironic twist. They are rather different but equally challenging in their own ways that first-year law students here will readily recognize. My pieces, this piece, is really aimed at them. The pieces I will discuss are five recurrent themes in American property law, leit motifs, to continue the metaphor from the Nicholson movie, that run throughout American legal doctrines. These themes provide a way of structuring all of property law, adding coherence to what so often appears to law students as an unintelligible rag-tag collection of rules and doctrines that defy any attempt to construct an overarching framework for analysis. I have given five simple labels to these recurrent topics: "conceptualizing property," "categorizing property, " "historicizing property," "enforcing property," and "de-marginalizing property." We begin with how we conceptualize property.
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.