Monday, January 27, 2020

Dangerous Ideas for Land Use Laboratories #1: Preempt the Single-Family Residence Restrictive Covenant

Preamble:  Where I've Been the Last Couple of Years

For the last several years, a lot of my time has been consumed by being an associate dean.  Rather than thinking big ideas about land use law, I've been worrying about course schedules and whatever issue had unexpectedly blown up when I came into the office that day.  With my stint in administration now past, I am delighted to get back to thinking about land use issues.  I find that I have a lot of ideas stacked up, many of which I haven't had time to fully research, and life being what it is, I may never have the chance to do so.  I also realize that the world of land use is changing dramatically, and there are some ideas I want to get out there before the moment passes.  I also realize that it seems the whole academic world has moved to Twitter, but I find that medium completely unappealing (even though I will link these posts to my Twitter account), and so I am returning to this blog for this series.  I don't know if anyone still reads it, but I'm hoping this series will give me a chance to start contributing again in a meaningful way.

The Dangerous Ideas series

For awhile, I've been thinking about the fact that the 39,000 local governments in the United States with land use authority utilize the same basic approach, almost all derived from enabling statutes themselves derived from the common origin of the SZEA.  It's remarkable, nonetheless, especially when you think of the idea that states--just 50 in number--are supposedly the laboratories of democracy.  My idea was, well, if you wanted to shake up land use law in the twenty-first century to address the major issues of the time...what would that look like?  There are certainly lots of discussions right now that are new and novel, but it interesting to me how quickly the novelty of the new idea becomes fetishized, and the invention stops as sides are taken and ideas politicized.  Bucking the norm of the SZEA-based approach is legally and politically dangerous.  But some places are going to want to try, and for those who are willing to think about things in a new way, what should they think about?  If folks are tired of the SZEA / Euclidean model, is their only option form-based codes?  New urbanism?  What else is there?  What can folks do now without hundreds of thousands of dollars of consultant fees? 

I welcome your thoughts and ideas.  In this series, I will share a few of mine.  I do not claim that the ideas in this series are not being done anywhere; surely, with 39,000 local governments in the US, almost everything I plan to discuss has been tried...somewhere.  My goal, though, is to try to broaden the conversation and, perhaps, convince some local governments out there to experiment a little, try something dangerous, and maybe build a better city while they're at it.  If folks know of cities or states working on these issues, I welcome thoughts.  And so, without further ado, here we go...

Dangerous Idea 1:  Preempt Restrictive Covenants for Single-Family Residences

There is plenty of discussion out there right now about places like Minneapolis and Oregon that have made strides to create more equitable and affordable neighborhoods by permitting duplexes, triplexes and fourplexes in existing single-family zoning districts.  I very much support this.

That said, this regulation primarily affects existing housing stock and only changes public regulation of that existing housing stock.  In many parts of the country, a significant percentage of housing stock is covered by private CC&Rs and an even higher percentage of new housing stock is covered by private CC&Rs.  One of the most common CC&Rs in residential subdivisions restricts those subdivisions to single-family residences.  If we are serious about affordable housing, those areas where CC&Rs are prevalent will prevent any meaningful retrofitting of single-family zones and mean our new housing will all still be single-family.  

The extent of this was made evident by this recent article:  Wyatt Clarke & Matthew Freedman, The rise and effects of homeowners associations, 112 Journal of Urban Economics 1 (2019).  The article estimates that 60% of all new housing construction is in an HOA, while 80% of new greenfield housing construction is in an HOA.  The article found significant class segregation between HOA ($83,401) and non-HOA ($59,656) household incomes.  Staggeringly, they found that 86% of new homes in the Mountain West, where I live, are covered by HOAs with all of the country above 40% of new housing stock in HOAs.  In the Mountain West, 40% of all housing is in an HOA, according to the article, and while that is the highest of any region, other regions have similar patterns.

My point is this:  if we are serious about addressing disparities in neighborhoods--and I think sociological studies tell us we should be--then we can't just address the public system of segregating neighborhoods through single-family zoning.  We must also contemplate pre-empting enforcement of single-family residence covenants in HOA CC&Rs through either state statute or local ordinance.

Dangerous idea?  You bet.  But how serious are we?  If we are really trying to build residential neighborhoods that are equitable, we can't congratulate ourselves for eliminating public barriers to more integrated neighborhoods through zoning while permitting the same thing by private means of the restrictive covenant.

Finally, I recognize some will say that it is the urban neighborhoods that are most important to address now because they are the most likely to be retrofit with density that would permit transit-rich options.  I disagree.  If developers know that they cannot enforce single-family residence CC&Rs, I believe they are more likely to engage in dense greenfield development that could yield meaningful density for future transportation nodes.  Moreover, such greenfield density is cheaper than infill density, which requires purchase of the existing structure and a demolition of the existing structure, which is time intensive and expensive.

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How could a statute or ordinance preempt a private restriction that is enforceable by everyone in a particular community who bought their homes in reliance on such a restriction. Sounds a lot like a taking to me.

Posted by: Neil Andrew Stein, Esquire | Jan 28, 2020 9:06:25 AM

Dear Stephen, welcome back to a pure academic focus! I am so excited to read this post - because I agree with your intuition and comments here and this topic is near & dear to my heart. Maybe we can talk about it at some point? In the meantime, here are some of my articles that touch on this very thing: Limiting the Collective Right to Exclude, 44 Fordham Urban Law Journal (2017); Common Interest Community Covenants and the Freedom of Contract Myth, 22 Brooklyn Journal of Law and Policy, 767 (2014), American Dream in Flux: The Endangered Right to Lease a Home, 49
Real Property, Trust and Estate Law Journal (2014); Community Covenant Alienation Restraints and the Hazard of Unbounded Servitudes, 42 Real Estate Law Journal (2014).

Posted by: Andrea Boyack | Jan 28, 2020 10:04:29 AM