Land Use Prof Blog

Bray on Progressive Property and Low-Income Housing

Zachary Bray (University of Houston) has posted The New Progressive Property and the Low-Income Housing Conflict, BYU Law Review, Volume 2012, Issue 4, p. 1109 (2012).  The abstract:

The foundation of property law has been much debated in recent years, as several scholars have sought to provide a theoretical alternative to what they call the dominant, “law-and-economics” approach to property. In place of the law-and-economics approach, these scholars advance a new theoretical approach, which I call “the new progressive property.” At its core, this new approach favors rules thought to promote the collective well-being of the larger community while ensuring that relatively disadvantaged members of society have access to certain basic resources. This Article explores the boundaries and practical implications of the new progressive property. To do so, I focus on two potential examples of this theoretical approach related to low-income housing: the federal Section 8 housing voucher program and local rent-control ordinances. I argue that Section 8 is a better example than rent control of the new progressive-property approach, even though rent control has previously been identified as a practical example of the new progressive property and Section 8 has not.

I then turn to examine a deep conflict at the intersection of Section 8 and rent control, which presents an important opportunity to further test and refine the new progressive property. In particular, I argue that this underexamined low-income housing conflict provides good reasons to abandon rent control, even from a progressive-property perspective. In addition, the low-income housing conflict between Section 8 and rent control sheds light on the ambiguous relationship between law-and-economics analysis and the progressive-property framework. More specifically, I argue that the conflict between rent control and Section 8 demonstrates that even the most basic law-and-economics tools must be incorporated into a progressive-property framework to achieve the ends of the new progressive property.

 

Very interesting, and an an original contribution in comparing two different facets of housing policy in the context of the larger theoretical discussion of progressive property.

 

Matt Festa

Zeiner on a Theraputic Jurisprudence Analysis of the Use of Eminent Domain to Create a Leasehold

Carol Zeiner (St. Thomas) has posted A Therapeutic Jurisprudence Analysis of the Use of Eminent Domain to Create a Leasehold, forthcoming in the Utah Law Review (2013).  The abstract:

Therapeutic jurisprudence provides an excellent tool to analyze and guide the development of the law on the use of eminent domain to create leaseholds. The objective of these takings is for the condemnor to become a tenant under a “lease,” rather than the fee simple owner.

I am perhaps the only scholar who has written extensively on the topic of takings to create a leasehold. In a previous work, I provided an exhaustive analysis of the conclusion that government can use eminent domain to create a leasehold. That work went on to conclude that there are circumstances in which government should use eminent domain to create a leasehold, but that difficult problems can arise in such takings. They necessitate refinements in arriving at just compensation.

That work also concluded that there is at least one situation in which government should not be allowed to use eminent domain to create a leasehold. I labeled such takings Kelo-type takings, wherein the government uses its power of eminent domain with the objective of creating a leasehold that it will then transfer to a private party for private use. My argument that the use of such Kelo-type takings to create leaseholds should not be allowed was based primarily on public policy considerations. I concluded that the problems arising from takings that create private leaseholds are much worse than those encountered in situations such as Kelo, in which government acquires a fee simple from the condemnee and then makes a transfer to a private party, because the form disrupts the social contract between government and the people.

Any such conclusion demands reexamination on theoretical grounds, which is done in this Article. In order to re-examine the question, it formally extends the jurisprudential philosophy of therapeutic justice to eminent domain in general and specifically to takings to create leaseholds. The principles underlying therapeutic jurisprudence, as well as the illuminating insights derived from its application, confirm the prior conclusion.

Matt Festa

Professors' Corner teleconference on Legal Education and Uniform Laws

From Wilson Freyermuth (Missouri) via the property listserv comes the announcement for this Wednesday's Professors' Corner--the monthly free teleconference sponsored by the ABA's Section on Real Property, Trusts, & Estates.  This one looks really interesting.  See below for the info and dial-in instructions.

Matt Festa

Professors' Corner: Legal Education and Uniform Laws Group Call

April 10, 2013, 12:30pm Eastern/11:30am Central/9:30am Pacific

Call-in number: 866-646-6488

Passcode: 5577419753

The April 2013 program is entitled "Real Estate-Related Uniform Laws in Progress." This program will discuss the status of the two major uniform law projects related to real estate that are currently underway within the Uniform Law Commission (which we all used to know as NCCUSL).

The first project is a comprehensive revision of the Uniform Residential Landlord and Tenant Act. The URLTA was originally promulgated nearly 40 years ago and has been adopted, either in part or in whole, in approximately 20 states. During this month’s program, Professors Sheldon Kurtz (University of Iowa) and Alice Noble-Allgire (Southern Illinois University), who are the co-Reporters for this Act, will discuss the current status of this project and some of the key issues being addressed in this revision. These revisions will receive their "first reading" at this summer's annual meeting of the Uniform Law Commission in July 2013. In case you’re curious, here is a copy of the current draft of the Act: http://law.missouri.edu/freyermuth/JEBURPA/2013apr2_RURLTA_MtgDraft.pdf.

The second pending real-estate related uniform law project is a new project to produce a uniform act governing residential mortgage foreclosure processes. This project began earlier this year after extended study by the Uniform Law Commission, as well as a stakeholder meeting at which input was taken from both industry and consumer groups, as well as federal and state regulators. The Act proposes to address residential mortgage foreclosure processes and mortgagor protections in both judicial foreclosure and nonjudicial foreclosure. During the program, Professors James Smith (University of Georgia) and Alan White (City University of New York), who are the co-Reporters for this project, will discuss the status of this project and the key issues being addressed in this project. Here is a copy of the current draft of this Act, which will likewise receive its "first reading" at this summer's Uniform Law Commission meeting: http://www.uniformlaws.org/shared/docs/Residential%20Real%20Estate%20Mortgage%20Foreclosure%20Process%20and%20Protections/2012mar25_RREMFPP_MtgDraft_Clean.pdf.

Please join us on Wednesday for this month’s call!

Dod & Duhart on Evaluating Katrina

Eloisa C. Rodriguez-Dod and Olympia Duhart (Nova Southeastern) have posted Evaluating Katrina: A Snapshot of Renters’ Rights Following Disasters, Nova Law Review Vol. 31, p. 467.  The abstract:

Hurricane Katrina destroyed the homes of many people living in parts of the Gulf Region. The storm displaced as many as 800,000 victims and it is still difficult for them to return home. Consequently, many homeowners have turned to renting because of the slow recovery process. Renters face added difficulties; they are often the last in line for government benefits and other assistance. There is much hostility towards the rights of renters, creating even more difficulties for them.

This article focuses on the difficulties facing evacuee renters in New Orleans following the disaster. These renters face such obstacles as scarcity of land, increases in costs for repairs, higher insurance, infrastructure uncertainty, rental property inflation, uncertainty over flood protection, zoning restrictions, and criminalization. This article discusses legislation and attempted legislation impacting renters post Katrina. The article explores the increase in rent after disasters and a suggested control. It further discusses the manner in which criminal backgrounds determine rental options following disasters. Specifically, the article focuses on legislation limiting access to rentals and suggests, with the right legislation in place, New Orleans will be able to successfully rebuild its lower and middle income housing.

Matt Festa

Wiseman on Castles, Tenements, and the Private Governance Divide

Hannah J. Wiseman (Florida State), another of our fabulous former guest-bloggers, has posted Castles, Tenements, and the Private Governance Divide.  The abstract:

The revered status of American home ownership has deep and seemingly impenetrable roots. In our modern mythology/reality, the castles that shelter and nurture our pursuit of the good life are under siege. A narrative common to both popular media accounts and a burgeoning property literature warns that private homeowners’ associations hold dominion over millions of Americans, dictating what they may do with their property and foreclosing when they cannot pay association fees or fines In response to this threat, legislatures, courts, and academics are fighting to stave off these intrusions by constraining servitudes. In focusing on the harms to property owners, these critics have unjustifiably omitted a large and growing segment of the population: renters. Nearly every American rents living space at one stage of life, and rentals are expanding as the real estate market continues on its uncertain trajectory. Tenants have no less lofty life goals than do homeowners, yet they, too, are governed by private rules for property use that severely constrain their freedom and allow termination of their property interest through eviction or sale. The rules in rental communities, moreover, serve fundamentally the same purpose as those set by homeowners association controlling neighbors’ uses to increase property value. The key difference between the two types of communities, beyond simple physical layout, lies in tradition: a woman’s home is her castle, but her apartment is her rickety tenement. Even this distinction is vanishing, however, as private communities with now-familiar, “intrusive” rules continue their decades-old proliferation, objections notwithstanding. If, then, private governance of property is fundamentally problematic, it is no less problematic for renters. But if, as seems more likely, we are generally willing to accept certain private rules in communities as a reasonable response to the interests of both owners and tenants, critics of private governance must explain why traditional notions of property should prevail over a modern approach to property consumers’ demands.

Very timely.  With the future of American housing patterns in flux, it's really important to discuss the intersection of private-public as well as renting-owning.  Hannah has written on related ideas before, and I look forward to reading this piece too.

Matt Festa

NYC Rent Control Laws at Supreme Court?

The case of Harmon v. Markus, currently before the Supreme Court on a petition for cert, is starting to draw some attention.  Among others, George Will devoted his latest column to urging the Court to hear the case in Supreme Court should take on New York City's Rent Control Laws:

James and Jeanne Harmon reside in and supposedly own a five-story brownstone on Manhattan’s Upper West Side, a building that has been in their family since 1949. But they have, so to speak, houseguests who have overstayed their welcome by, in cumulative years, more than a century. They are the tenants — the same tenants — who have been living in the three of the Harmons’ six apartments that are rent controlled.

The Harmons want the Supreme Court to rule that their home has been effectively, and unconstitutionally, taken from them by notably foolish laws that advance no legitimate state interest. The court should.

This “taking” has been accomplished by rent-control laws that cover almost 1 million — approximately half — of the city’s rental apartments. Such laws have existed, with several intervals of sanity, since the “emergency” declared because returning soldiers faced housing shortages caused by a building slowdown during World War I.

This is a tough issue on the equities; rent-control laws (most prominently in New York) are of incredible help to some people and have a very negative effect on others, not only developers, but also (perhaps most especially) would-be entrants-- which is why the politics on this issue are more difficult to track.  Rent control favoring current (and often, inherited) tenants is getting increasingly hard to justify on policy grounds, but as a matter of property law, is it unconstitutional?  Harder to prove on legal doctrine.

Richard Epstein has a podcast on the case for the Federalist Society.  I've been looking for commentaries on the other side but haven't found quite as much; let me know.

Matt Festa

Morgan Stanley says US moving toward "Rentership Society"

I came across a link to this Bloomberg report in reading for my previous post on the Leinberger-Kotkin debate.  The article is a few months old, but I still think it's highly relevant: U.S. Moves Toward Home 'Rentership Society,' Morgan Stanley Says, discussing a report on housing.

The U.S. homeownership rate has fallen below 60 percent when delinquent borrowers are excluded, a sign of the country’s move toward a “rentership society,”Morgan Stanley said in a report today. . . .

The homeownership rate reached an all-time high of 69.2 percent in 2004 as relaxed lending standards fueled home sales and President George W. Bush promoted an “ownership society.” Mortgage delinquencies, foreclosures and tighter credit for housing loans are reducing property buying, [Morgan Stanley analysi Oliver] Chang said.

“Taken together they are forcibly moving the country away from being an ownership society,” Chang, based in San Francisco, said in an e-mail. “This change is only beginning, and is moving the country towards becoming a rentership society.”

A real estate professional demurs, but look at the reason why:

Most Americans still aspire to own their houses and don’t want to be renters forever, said Rick Davidson, president and chief executive officer of Century 21 Real Estate LLC in Parsippany, New Jersey.

“It isn’t about the financial aspects, but about building a family and having a part of the American dream,” Davidson, whose company is a unit of Realogy Corp., said today during an interview at Bloomberg’s offices in New York. “What really drives purchases at the end of the day is emotional and has to do with lifestyle.”

We're still conditioned to think of homeownership as the sine qua non of the American Dream--but it's not necessarily in our financial or economic interest; it's emotional and about lifestyle.  But is there an adequate range of opportunities presented for Americans to choose (emotionally?) between different forms of lifestyle?  I believe that at their base, issues of housing, community, and urban form are primarily cultural.

Matt Festa

Furman Center launches SHIP

Some exciting news from NYU's Furman Center for Real Estate & Urban Policy:

We are thrilled to announce the launch of our Subsidized Housing Information Project (SHIP), a new resource designed to provide housing agencies, community organizations, tenants and the affordable housing industry with the information they need to develop effective preservation strategies.

The SHIP database contains extensive information on nearly 235,000 units of privately-owned, subsidized affordable rental housing in New York City. Compiled from 50 different public and private data sources, the information is accessible through a user-friendly, interactive data search tool available on our website.

Our Institute for Affordable Housing Policy has simultaneously released the State of New York City’s Subsidized Housing report, which provides a comprehensive analysis of the properties in the SHIP database, and identifies opportunities to preserve affordable housing in the coming years. Another online tool, the Directory of New York City Affordable Housing Programs (Beta) summarizes nearly 200 programs that have been used in New York City to develop affordable housing since the 1930s.

The SHIP was made possible through a collaboration with the New York City Department of Housing Preservation and Development, the New York City Housing Development Corporation, New York State Homes and Community Renewal, and the U.S. Department of Housing and Urban Development, and support from the John D. and Catherine T. MacArthur Foundation, the F.B. Heron Foundation and NYU Law alumnus Herbert Z. Gold (¢40). The New York City Council has also committed to support technical assistance and training for community-based organizations on how to use the database in their preservation efforts and advocacy. We have also received invaluable guidance and support from members of the SHIP Advisory Committee, the IAHP Advisory Board and dozens of affordable housing experts.

Matt Festa

Glaeser on Rethinking the Federal Bias Toward Homeownership

Harvard economist Edward Glaeser--author of much fascinating work on land use and urban development, including his latest book, Triumph of the City-- has posted his latest article, Rethinking the Federal Bias Toward Homeownership, forthcoming in HUD's Cityscape: A Journal of Policy Development and Research, Vol. 13, No. 2 (2011). The abstract:

The most fundamental fact about rental housing in the United States is that rental units are overwhelmingly in multifamily structures. This fact surely reflects the agency problems associated with renting single-family dwellings, and it should influence all discussions of rental housing policy. Policies that encourage homeowning are implicitly encouraging people to move away from higher density living; policies that discourage renting are implicitly discouraging multifamily buildings. Two major distortions shape the rental housing market, both of which are created by the public sector. Federal pro-homeownership policies, such as the home mortgage interest deduction, weaken the rental market and the cities where rental markets thrive. Local policies that discourage tall buildings likewise ensure that Americans have fewer rental options. The economic vitality of cities and the environmental consequences of large suburban homes with long commutes both support arguments for reducing these distortions.

A very important argument; I'm looking forward to reading the whole thing.

Matt Festa

Nichols on Tenant Protections under the PTFA

Elan Stavros Nichols (Michigan State) has posted Unanswered Questions Under the PTFA: Exploring the Extent of Tenant Protections in Foreclosed Properties, forthcoming in the Journal of Affordable Housing, Vol. 20, No. 2, Winter 2011. The abstract:

The somewhat new Federal Protecting Tenants at Foreclosure Act (the “PTFA”), as recently amended, still leaves many questions of interpretation in states with the foreclosure by advertisement process, and in states with laws related to issues on which the PTFA is silent. The PTFA is vague in places, and does not address certain issues raised by the foreclosure processes in certain states, where state law is not clearly preempted.

This article will examine how the PTFA, including the recent amendments and any recent judicial and advisory opinions, applies in states with the foreclosure by advertisement process (as opposed to judicial foreclosure). The article will use Michigan as a case study for this inquiry, briefly discussing other states with a similar process. In so doing, the article will discuss issues raised in these states concerning matters on which the PTFA’s terms are vague or wholly silent.

To that end, this article picks up where the article, “Interpreting the Protecting Tenants at Foreclosure Act of 2009,” 19 J. of Affordable Housing & Community Dev Law 205 (Winter, 2010), by Allyson Gold, left off. Of particular assistance will be the recent statutory amendments, any relevant case law, interpretive statements from the Department of Housing and Urban Development, and the “working interpretation” adopted by legal services providers and others agencies dealing with the foreclosure crisis. Consequently, this article will conclude with a proposal for a reasonably fair interpretation of the PTFA in states with foreclosure by advertisement and in states where the PTFA is not expressly preempted but still leaves questions.

Matt Festa

Rose on the Rights of Tenants of Residential Properties in Foreclosure

Henry Rose (Loyola-Chicago) has posted The Due Process Rights of Residential Tenants in Mortgage Foreclosure Cases, 41 N. M. L. Rev. ___ (forthcoming 2011). Here's the abstract:

The purpose of this article is to explore the rights of tenants who reside in buildings undergoing foreclosure to receive notice and an opportunity to be heard when foreclosures threaten to terminate their tenancies. The federal Protecting Tenants at Foreclosure Act of 2009 (PTFA) will significantly reduce the incidence of residential tenancies being terminated as a result of foreclosure. However, PTFA offers weak procedural protections if the mortgagee or the person who acquires ownership pursuant to a foreclosure seeks to terminate the tenancies of residents in the foreclosed building. In those states that require judicial foreclosures, the Due Process Clause of the Fourteenth Amendment to the United States Constitution should afford tenants faced with termination of their tenancies due to foreclosure with notice and an opportunity to be heard before their tenancies are terminated. In states that allow non-judicial foreclosures, Due Process protections are not likely to be available to tenants due to a lack of state action in the foreclosure process. PTFA should be amended to afford all tenants, including those who reside in non-judicial foreclosure states, with notice and an opportunity to be heard before their tenancies are terminated pursuant to a foreclosure.

Jim K.

Iglesias on Fair Housing Remedies and the Two-Person-Per-Bedroom Standard

Tim Iglesias (San Francisco) has posted Moving Beyond the Two-Person-Per-Bedroom: Revitalizing Application of the Federal Fair Housing Act to Private Residential Occupancy Standards.  Here's the abstract:  

New empirical evidence demonstrates that the common residential occupancy standard of two-persons-per-bedroom substantially limits the housing choices of many thousands of families, especially Latinos, Asians and extended families. The federal Fair Housing Act makes overly restrictive policies illegal, but the enforcement practices of the U.S. Department of Housing and Urban Development (HUD) have enabled the two-persons-per-bedroom standard to become de facto law. This article urges HUD to use its regulatory authority to remedy the situation and offers several solutions. And, if HUD fails to act, it encourages private plaintiffs to challenge the two-persons-per-bedroom standard and provides guidance to courts in deciding these cases.

Jim K.

Building Codes & the Quake

The news seems to get worse from Japan as the Death Toll Estimate Soars.  But it's still true that things could have been even worse if it had not been for Japan's careful land and development planning.  As James Glanz and Norimitsu Onishi reported in the New York Times, Japan's Strict Building Codes Saved Lives.  From the article:

Hidden inside the skeletons of high-rise towers, extra steel bracing, giant rubber pads and embedded hydraulic shock absorbers make modern Japanese buildings among the sturdiest in the world during a major earthquake. . . .

Unlike Haiti, where shoddy construction vastly increased the death toll last year, or China, where failure to follow construction codes worsened the death toll in the devastating 2008 Sichuan earthquake, Japan enforces some of the world’s most stringent building codes. Japanese buildings tend to be much stiffer and stouter than similar structures in earthquake-prone areas in California as well, said Mr. Moehle, the Berkeley engineer: Japan’s building code allows for roughly half as much sway back and forth at the top of a high rise during a major quake.

So it's sad to contemplate but still probably true that the destruction and loss of life could have been much worse if not for the regulations.  Of course, these building codes have made development much more expensive; but the article goes on to note an interest twist in how this has played in the marketplace:

New apartment and office developments in Japan flaunt their seismic resistance as a marketing technique, a fact that has accelerated the use of the latest technologies, said Ronald O. Hamburger, a structural engineer in the civil engineering society and Simpson Gumpertz & Heger, a San Francisco engineering firm.

“You can increase the rents by providing a sort of warranty — ‘If you locate here you’ll be safe,’ ” Mr. Hamburger said.

In the meantime, it's a terrible disaster and we wish the best to the rescue and recovery efforts.  Thanks to James McKechnie for the pointer.

Matt Festa

Jones on Garner v. Gerrish and the Concept of "Home"

Bernie D. Jones (Suffolk) has posted Garner v. Gerrish and the Renter’s Life Estate: Teaching a New Concept of 'Home,' Faulkner University Law Review, Vol. 2, pp. 1-44, 2010.  The abstract:

Property law scholars have been interested in Garner v. Gerrish, 63 N.Y.2d 575 (1984) because it presents a unique opportunity for discussing the boundaries of leasehold doctrine. As such, it is covered in various first-year property law textbooks. Its unusual fact pattern makes it useful as a means of helping students understand the differences among leaseholds for a term of years, the periodic tenancy, and the tenancy at will.

A landlord drafted a lease on a pre-printed form, writing in the terms of the lease, but without the advice of counsel. The lease had no end date and the tenant paid rent on a monthly basis. The landlord died within a few years of drafting the lease. In a dispute to determine the rights of the parties, the New York Court of Appeals held that since the tenant alone had the right to terminate, the landlord gave the tenant a determinable life estate. The tenant thus had a home for life, for which he need only pay the prescribed rent for as long as he chose to live on the premises. Though the case provided the basis for the Court of Appeals to modernize the tenancy at will in New York, I argue that it did not present the best fact pattern for doing so. Although the lease effectuated New York state rent control laws where they were not required by statute, it also indicates the possibilities to be found in disguised leasehold arrangements redefining the boundaries of “home.”

This article discusses the treatment of Garner v. Gerrish in typical first-year property textbooks. It explains and assesses the opinion from the trial court to the appellate decisions – the theories of the case developed by the parties, and the courts’ interpretations of landlord-tenant law. The article offers analyses of the archived records in the case that indicate the failures of the landlord’s executor to articulate the defenses of unconscionability and undue influence. It is unclear why the executor pursued this strategy.

Cases like these, where there are more questions than answers, present ideal opportunities for property law faculty to develop multifaceted pedagogical strategies. These might encourage students to think not only about doctrine but litigation strategies in the real estate context, and the perils to be found in flawed strategies that might result in decisions that go against them. In Garner v. Gerish, this meant a limited understanding of the case that coincided with prevailing pro-tenant sentiments in New York landlord tenant law.

I always enjoy teaching Garner v. Gerrish during the property course, and this article expands our understanding of the case from being a good example of certain issues with landlord-tenant law toward a larger commentary on the meaning of the home.  The article also looks like it will be another good addition to the increasing literature on the backstories of leading cases (exemplified by the Foundation Press Law Stories series and other articles).  Should there be a "Land Use Stories" volume? 

Matt Festa

Callison on the LIHTC and Geographic Desegregation

Bill Callison (Faegre & Benson, LLP; also ABA Forum on Aff. Housing and Comm. Dev. Law) has posted Achieving Our Country: Geographic Desegregation and the Low-Income Housing Tax Credit, 19 S. Cal. Rev. L. & Soc. Just. 213 (2010).  Here's the abstract:

This Article, which blends educational policy, housing policy, and tax policy, argues that one path down the precipice of racial inequality is to reverse a path that led us to where this problem began; namely, the racial segregation of the places where we live. This Article examines the country’s most important subsidy for creating affordable housing, the Federal Low-Income Housing Tax Credit (“LIHTC”), and considers whether the tax credit program has served as a tool for desegregating metropolitan neighborhoods. After concluding that the LIHTC program has not been an effective tool for reducing or eliminating continuing patterns of racial segregation and poverty concentration, this Article proposes numerous programmatic changes that could allow the tax credit program to promote greater geographic desegregation. Others have considered the impact of fair-housing laws on the LIHTC program. This Article contributes to that literature by going beyond fair housing to examine both the “cooperative federalism” concepts embedded in the program and the economic structure of tax credits, and by making practical suggestions on how the program can be improved to obtain racial integration. It takes a two-prong approach: First, this Article encourages more robust national guidance in order to encourage states to use credits to foster desegregation. Second, this Article considers changes to the economic structure of the program to provide incentives to developers and investors who undertake to provide affordable housing that results in desegregation.

Jim K.

Sheff on the Residential Landlord's Duty to Mitigate

Jeremy N. Sheff (St. John's) has posted A Tale of Two Cities: The Residential Landlord's Duty to Mitigate in New York, forthcoming in the Journal of Civil Rights and Economic Development, Vol. 25 (2011).  The abstract:

The 2008 decision of the New York Supreme Court's Appellate Division for the Second Department in Rios v. Carrillo brought stability to a previously uncertain area of landlord-tenant law: the duty of residential landlords to attempt to mitigate damages in the event of tenant abandonment. This article argues that in the instability that largely reigned prior to Rios, courts used the debate over what legal rule to apply in tenant abandonment cases as a tool to decide such cases based on flexible equitable standards that took into account the relative economic position of the parties and their degree of good faith. Because the New York court system accords weight to appellate precedent in part based on amount in controversy, and because Rios involved what can only be described as a luxury property, the Second Department's ruling has the perverse effect of subjecting economically insecure parties to solutions developed for far wealthier litigants. This article demonstrates the extent of this effect by reference to census data on households and housing markets, and argues that Rios was wrongly decided not only as a matter of legal analysis, but as a matter of policy.

Matt Festa

Stein on Commercial Leasing in China

Gregory M. Stein (Tennessee) has posted Commercial Leasing in China: An Overview, Cornell Real Estate Law Review, Vol. 8, p. 26 (2010).  The abstract:

In an effort to understand how and why investors and other professionals are willing to participate in China’s unsettled commercial leasing market, I recently interviewed Chinese and Western experts in the real estate field, including lawyers, judges, developers, bankers, government officials, and academics. This Article summarizes my findings about China’s commercial leasing market. China’s new property law provides some insight into how China’s real estate market functions, but a full picture requires an understanding of how these professionals have operated in a legally uncertain environment, both before and after the new law became effective.

Matt Festa

Kelly on Homes Affordable for Good

James J. Kelly, Jr., of Baltimore Law and intrepid Land Use Prof guest blogger, has posted Homes Affordable for Good: Covenants and Ground Leases as Long-Term Resale Restriction Devices, a symposium piece in the St. Louis University Public Law Journal, Vol. 29, p. 9 (2009).  The abstract:

Covenants and ground leases have been, and continue to be, used to create shared spaces that are fundamentally, and often invidiously, exclusive. Famously made a dead letter in the case of Shelley v. Kraemer, covenants banning resale to nonwhite households put the force of law behind the segregated birth of America’s suburbs. Today, gated residential communities and shopping malls assure a degree of class exclusivity through covenants and commercial ground leases, respectively. These same legal mechanisms, however, are now deployed to assure long-term inclusion as well. 

Developers of affordable housing are creating homes that are not only beneficial to the original homeowners but also available for future generations of qualified home buyers. When selling the newly developed homes, they are having subsidized homeowners promise to pass the good deals on to future home buyers. These resale restrictions allow single-family homes to be sold, and later resold, to low and moderate-income households in neighborhoods that would otherwise be unavailable to them. Affordability protections of 15 years or less are relatively common and can be achieved through a number of legal arrangements. Common law and statutory hostility to long-term private arrangements that limit alienability, however, have made the search for perpetual affordability more challenging. Those seeking to sustain economic diversity in residential communities over multiple generations of homeowners have turned to covenants authorized by statute and ground leases as the vehicles by which these promises can be enforced. 

As stand-alone enforceable promises that run with land, covenants have become the primary vehicle for Inclusionary Zoning programs that seek to preserve the mixed-income nature of affected for-profit housing developments for the long haul. Community Land Trusts have generally preferred the ground lease, a standard device for shopping mall creation, to ensure that subsidized single-family homes developed by nonprofit housing organizations can remain affordable forever. As economic diversity in communities is given its proper place as a long-term goal for America’s metropolitan areas, 21st century real estate law will need to integrate both covenants and ground lease reversion interests as stable, effective means of enforcing affordability-preserving resale restrictions. In addition to arguing for the importance of both covenants and ground leases as affordability conservation mechanisms, this article will analyze and evaluate each device as to its effectiveness in achieving the development goal of creating and sustaining economically diverse communities of choice.

Matt Festa

Fennell & Roin on Residential Stakes

Lee Anne Fennell (Chicago) and Julie Roin (Chicago) have posted Controlling Residential Stakes, University of Chicago Law Review, Vol. 77, p. 143 (2010).  The abstract:

Local communities often suffer when residents have too small a stake in their homes — a point underscored by recent rashes of foreclosures and abandonments, and implicated by longstanding questions about the effects on communities of renters and owner-occupants, respectively. However, homeowners with too great a financial stake in their homes can also cause difficulties for local governance by acting as risk-averse NIMBYs. Local governments should have a strong interest in helping members of their communities move away from problematic forms of stakeholding and toward more desirable intermediate positions. This essay examines how and why governmental entities at the state and local levels might regulate or shape the financial stakes that residents have in their homes. We give particular attention to the role local governments may play in facilitating homeowner and tenant access to index-based financial instruments that adjust residential risk-bearing. More radically, we suggest that local governments, assisted by state law, could formulate shared equity arrangements in which local residents hold stakes in the housing markets of surrounding localities as well as in their own jurisdictions.

As you might expect, this looks like a very interesting and important paper.

Matt Festa

Iowa Clinical Law on Accessibility and Universal Design in Affordable Housing

The University of Iowa Clinical Law Program has The Washignton Court Housing Survey: A Study of Accessibility and Universal Design in Affordable Housing--Executive Summary, published in the Journal of Affordable Housing & Community Development Law Winter, Vol. 19, No. 2, pp. 191-204, 2010.  The survey and research was completed by student interns supervised by Leonard A. Sandler.  The abstract:

The Washington Court Housing Survey: A Study of Accessibility and Universal Design in Affordable Housing is one of many community-based and systems reform initiatives the University of Iowa Clinical Law Program has designed and implemented in the last decade. The continuing mission of this project is to increase mainstream housing opportunities for persons with disabilities and promote universal design and sustainable, multigenerational housing of all types. The article is a report about tenant awareness, use, and benefits of accessibility and universal design features in Washington Court, an affordable housing complex in Dubuque, Iowa. The overarching goal was to determine if universal design makes sense in the twenty-first century and enhances quality of life, safety, comfort, and convenience. We hope to add to the growing body of evidence demonstrating that universal design is valued by individuals, communities, and the public and private sectors. We had several specific objectives. The first objective was to learn about residents’ experiences, including what motivated residents to move to Washington Court, whether the universal design features have added to residents’ quality of life, and what the residents would change about the building or apartments. The second objective was to test our survey instrument’s effectiveness in gathering information on accessibility and universal housing design more generally. We also developed a survey and checklist that others could use to plan, design, build and evaluate sustainable housing. The third objective was to encourage builders, developers, and funding agencies to use the survey results and recommendations and voluntarily incorporate universal design into residential, business, and commercial facilities. The fourth objective was to persuade state and local lawmakers and agencies to require minimum universal design features in publicly funded or privately built housing of all types or to provide incentives for builders, developers, and consumers to do so.

This looks like a great example not only of the kind of field research that can really add to the body of useful knowledge for both theorists and practitioners, but also of a fascinating clinical teaching project.

Matt Festa