Land Use Prof Blog

Eagle on the Really New Property

I'm still out of town, but a quick dose of internet access reveals what looks like a very interesting new property theory piece by Steven J. Eagle (George Mason): The Really New Property: A Skeptical Appraisal, forthcoming in the Indiana Law Review.  The abstract:

This article reviews recent scholarship invoking the prophetic tradition in American jurisprudence and calling for the transformation of property law. It contrasts imposed top-down social change with Burkean and Oakeshottian gradual change derived from conversation within our legal and cultural tradition. The work of Robert Ellickson is presented as illustrating the development of property law in the Burkean tradition. Transformative property scholarship, on the other hand, largely reflects Osborne and Gaebler’s view that government should steer and private actors row, reinforced by Thaler and Sunstein’s call for soft paternalism. The article asserts, however, that Kant and Berlin’s admonition that all of humankind is “crooked timber” precludes officials from a privileged position, a postulate well supported by public choice theory.

The article views the change in conceptual thinking from Hohfeldian property to Heller’s anticommons and assertions of disintegration and entropy of property. These set the stage, for instance, for advocacy of “rightsizing,’ through the shrinking private parcels through smart growth and densification, and the supersizing of government-controlled land through condemnation for urban redevelop.

Other topics discussed are regionalism, new governance, and the creation of affordable housing, through, among other things, the rearrangement of traditional landlord-tenant relationships. The article expresses skepticism that flaws inherent in the top-down transformation of property would permit outcomes that are coherent and effective, and could withstand capture by affected interest groups.

Matt Festa

Brescia on Progressive Lawyering & Affordable Housing

Ray Brescia (Albany) has posted Line in the Sand: Progressive Lawyering, 'Master Communities', and a Battle for Affordable Housing in New York City, Albany Law Review, Vol. 73, No. 3, p. 715, 2010.  The abstract:

In the fall of 2006, a real estate group led by the father and son team of Jerry and Rob Speyer completed the largest residential real estate deal in U.S. history. For $5.4 billion, this team purchased the twin housing developments of Stuyvesant Town and Peter Cooper Village, located on the East Side of Manhattan. As part of their business plan, the new landlords sought to displace thousands of rent-regulated tenants so that market rents could be charged in the units vacated by outgoing tenants. Led by a crusading elected official, who just happened to be a resident of the complexes, the members of the complexes’ tenant association, supported by a host of lawyers from different sectors of the bar, pursued a range of legal avenues to resist the landlords’ efforts to convert thousands of units from affordable housing into luxury, market-rate housing.

In many ways, the purchase of the properties at the height of the real estate market, and the subsequent campaign to pursue a high rate of return on the investment to satisfy the debt burden on the properties, is another example of the distortions created by the era of easy credit. Much of the attention on the financial crisis focuses on the impact of the rise and collapse of an overheated home mortgage market on the broader financial system. What occurred in Stuyvesant Town and Peter Cooper Village is a symptom of that broader phenomenon, but one that occurred in the rental market, not the home mortgage market. It is a tale of irrational exuberance and aggressive speculation. The ultimate demise of the landlords’ efforts also tells another story: one of a tenant association; an elected official; and a loose network of attorneys who, together, fought back the attempts of the landlords to displace thousands of rent regulated tenants, not with bulldozers, but trumped up legal claims and an aggressive business plan.

The landlords’ efforts were ultimately halted by a recent decision of New York’s Court of Appeals in successful impact litigation filed by a class of tenants in the complexes, Roberts v. Tishman Speyer Properties, L.P., which is highlighted in detail in this article. But this legal victory, as important as it is for those tenants affected by it, tells only one part of the story. Progressive lawyers, in support of grassroots efforts, waged a campaign of hand-to-hand combat to preserve the affordability of the complexes for the tenants who live there. A review of these efforts helps to place the work of these attorneys within an emerging body of scholarship that highlights the positive and transformative power of legal advocacy to promote progressive social change. Within this body of scholarship there is a renewed yet sober appreciation for the value and ability of the law and legal advocacy to promote progressive social change. This appreciation emphasizes tactical flexibility, but also responsiveness and accountability to community interests and needs. This article analyzes the work of the attorneys who helped to orchestrate the legal campaign to preserve the affordability of Stuyvesant Town and Peter Cooper Village to determine whether their actions were consistent with this approach to progressive lawyer and to gain what insights about progressive lawyering their efforts might reveal.

Matt Festa

Rodriguez-Dod on Protecting Tenants from Foreclosure Evictions

Eloisa C. Rodriguez-Dod (Nova Southeastern) has posted Stop Shutting the Door on Renters: Protecting Tenants from Foreclosure Evictions, from Cornell Journal of Law and Public Policy, Vol. 20.  The abstract:

This article discusses existing and proposed federal and state law affecting tenants’ rights in foreclosure. As “Foreclosure” signs rapidly join “For Sale” signs across the country, the national foreclosure crisis has not only displaced homeowners, but a plethora of renters as well. The approach taken by states concerning tenants affected by foreclosure varies greatly. Furthermore, a recently enacted federal law, created specifically to help tenants in foreclosure, does not relieve the uncertainty in resolving this issue. In addition to being the first to critique the new federal law, this article offers recommendations for legislation that may better protect tenants from foreclosure-related evictions.

Matt Festa

Way on Informal Homeownership

Heather K. Way (Texas) has posted Informal Homeownership in the United States and the Law, from St. Louis University Public Law Review, Vol. 29, No. 1 (2009).  The abstract:

This article examines how millions of lower-income families in the United States attempt to acquire title to their homes informally, outside the mortgage market and instead through mechanisms such as lease-to-own contracts and intestacy. Many of these families are left holding inferior and insecure title to their homes--if they hold title at all. The article explores the benefits and pitfalls of "informal homeownership" and the legal structures that perpetuate disparties between formal and informal homeownership. The article then proposes a series of legal reforms to help ensure that the American legal system provides lower-income families with better opportunities to obtain secure title to their homes.

Matt Festa

Collinson and Winter on U.S. Rental Housing Characteristics

More interesting work from HUD: Rob Collinson and Ben Winter have posted U.S. Rental Housing Characteristics: Supply, Vacancy, and Affordability, HUD PD&R Working Paper 10-01.  The abstract:

The aim of this working paper is to document key empirical facts on U.S. rental housing market conditions – reporting both current conditions (as of second quarter 2009) as well as notable historic trends. This analysis draws upon the findings of existing scholarly work and includes original analysis utilizing a mix of public and proprietary data.

This working paper is not a comprehensive assessment of U.S. rental housing market conditions; rather it focuses on describing market dynamics in the context of rental housing supply, variations across local rental housing markets, conditions in the nation’s assisted rental housing stock, and the evolving need and demand for affordable rental housing.

Matt Festa

Sharma on Rent Control Legislation in India

Sharda Sharma (Chanakya National Law University) has posted Interpreting Rent Control Legislation: Role of Judiciary - A Critique.  The Abstract:

In India rent control legislation has caused inefficient use of built space, arbitrary allocation of space and retardation of new construction initiatives. The executive is hardly concerned to revive the rent as per market price and the judiciary is inclined to give extra benefit to the renters by interpreting the various provisions in the favour of renter. But while reading the statute it appears that Supreme Court interpretation of rent legislation is not only contrary to the intention of legislature but also its previous decision. 

This article tries to analyse one such aspect of rent legislation. I have tries to answer the controversy concerning the issue that whether a habitual defaulter who pays rent just before the landlord decides to file the case for eviction will be evicted on the ground on non payment or will be get the benefit of waiver of cause of action as the rent has been paid and at the time of instituting the suit no such cause remains.

Matt Festa

Sandercock and Lebovits on NY Landlord-Tenant Law for the Transactional Attorney

Margaret B. Sandercock (Goodfarb & Sandercock) and Gerald B Lebovits (Judge, NYC Civil Court & adjunct prof, St. John's & Columbia) have posted New York Residential Landlord-Tenant Law 101 for the Transactional Attorney, forthcoming in Real Property Law Journal, Summer 2010.  From the introduction:

This article spots some of the most common landlord-tenant issues that transactional attorneys should recognize so that they can assess the proposed purchase, consult with a landlord-tenant specialist if necessary, and take action required at closing. The attorney’s prepurchase research, which may be conducted pre-contract or during a due-diligence period with a right of cancellation after the contract is signed,

should be conducted simultaneously with other due diligence and supplements an engineering report and physical inspection of the entire building.

The article examines several due diligence issues related to land use regulation.  Looks like a good guide for anyone interested in working in the area. 

Matt Festa

SCOTUS decides Mac's Shell case

Yesterday, the U.S. Supreme Court decided Mac's Shell Serv., Inc. v. Shell Oil Prods. Co., No. 08-240.  Service station franchisees sued under the Petroleum Marketing Practices Act, 15 U.S.C. 2802, 2804, claiming a "constructive termination" of their franchises.  From the Syllabus:

The Petroleum Marketing Practices Act (Act) limits the circumstances in which franchisors may "terminate" a service-station franchise or "fail to renew" a franchise relationship. 15 U. S. C. §§2802, 2804. Typically, the franchisor leases the service station to the franchisee and permits the franchisee to use the franchisor's trademark and purchase the franchisor's fuel for resale. §2801(1). As relevant here, service-station franchisees (dealers) filed suit under the Act, alleging that a petroleum franchisor and its assignee had constructively "terminate[d]" their franchises and constructively "fail[ed] to renew" their franchise relationships by substantially changing the rental terms that the dealers had enjoyed for years, increasing costs for many of them. The dealers asserted these claims even though they had not been compelled to abandon their franchises, and even though they had been offered and had accepted renewal agreements.

Justice Alito wrote the opinion for a unanimous Court, which held:

1. A franchisee cannot recover for constructive termination under the Act if the franchisor's allegedly wrongful conduct did not compel the franchisee to abandon its franchise. Pp. 6-15. . . .

2. A franchisee who signs and operates under a renewal agreement with a franchisor may not maintain a constructive nonrenewal claim under the Act.

The case turned more on contract and franchise law, but it also may be of interest to land users to the extent that it touches on real property leases and oil and gas law . . . plus service stations are often a big issue in zoning.  Lots more info is available on this SCOTUS Wiki by Shira Liu of Stanford Law School.

Matt Festa

China: Restaurant Hires Live-In Demolition Protestor

In a bit of international land use news comes this story from the Associated Press: Doomed China Restaurant Hires Live-In Protestor.

BEIJING -- Wanted: One live-in protester, $146 a month, no days off.

When the managers of a Beijing restaurant marked for demolition were too busy to fight it, they posted an Internet ad and hired a stranger to stay there around the clock. The job seems to be a first for China, where frenzied urban construction has led to violent evictions, protests and even suicide.

Apparently the issue of forced demolition to make way for redevelopment is gaining traction in China due to recent trends:

China has struggled for years with the issue of forced evictions. But some say the violent protests against forced evictions have increased this year, as a massive government stimulus plan has made loans for construction easier. Under law, land seizures are meant to be for public interest projects, but angry citizens have protested evictions meant to make way for shopping malls and luxury apartments.

It's not clear how many Chinese have been affected by forced evictions. But the Beijing restaurant is not far from the area where rights groups say perhaps 1 million people were kicked out of properties to make way for last year's Olympic venues. Next door, a separate demolition project has left a patch of rubble the size of a football field.

Of course, we have heated controversies here in the US when people are forced to give up their land for redevelopment projects.  But this isn't like a Kelo situation or an Atlantic Yards, where government involvement lends the legitimating public-use rationale to projects that will be led by private developers; in China these controversies seem to be purely private-to-private transfers.  It would be interesting to see the text of the China's takings law referred to in the article.  In the case of the Fish Castle Restaurant Bar in the story, the restaurant owners are being forced out of a lease apparently without compensation because the landlord wants to make way for a shopping center with apartments (mixed-use urbanism?).  The story involves the live-in protestor-for-hire and thuggish tactics by the would-be developer.

Eminent domain and compensation laws may differ around the globe, but the conflict between putting property to its highest use and the individual's desire to protect his or her property appears to be more universal.

Matt Festa