Friday, January 11, 2008

Nash on Economic Efficiency, Public Choice, and Property Rights

Jonathan Nash (Tulane) has posted Economic Efficiency Versus Public Choice: The Case of Property Rights in Road Traffic Management on SSRN.  Here's the abstract:

This Article argues, using the case of responses to traffic congestion, that public choice provides a greater explanation for the emergence of property rights than does economic efficiency. While the traditional solution to traffic congestion is to provide new roadway capacity, that is not an efficient response in that it does not lead to internalization of costs. Moreover, over time new capacity may serve to exacerbate congestion problems: New roadway capacity may induce additional travel that would not have taken place but for the new construction. By contrast, congestion charges - that is, imposing tolls designed to force drivers to internalize the costs that their driving imposes on other drivers offer an efficient way to address the problem of congestion. The continued popularity, despite this, of providing new roadway capacity turns upon public choice theory. New roadway construction tends to be very attractive for politicians as a way to satisfy both constituents generally, as well as interest groups that tend to be well-organized and powerful. In contrast, congestion charging regimes tend to be less popular across the board politically. At present, there appears currently to be something of a shift in position. Experimentation with congestion pricing programs is growing overseas including a notable program in London - and a serious proposal for New York City's central business district. This Article thus argues that, while political economy tends to be a powerful force, it is possible for concerns of efficiency to override (or at least to curtail) that force when the inefficiencies of a response grounded in political economy become too large. At the same time, public choice continues to hold considerable sway: The shift toward congestion pricing may require not only pressing efficiency concerns, but also a shift in the political climate, as evidenced by backlash against New York City's proposal.

Ben Barros

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January 11, 2008 in Property Theory, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Jacoby on Delinquency Management

Melissa B. Jacoby (UNC - Chapel Hill) has posted Homeownership Risk Beyond a Subprime Crisis: The Role of Delinquency Management on SSRN.  Here's the abstract:

Public investment in and promotion of homeownership and the home mortgage market often relies on three justifications to supplement shelter goals: to build household wealth and economic self-sufficiency, to generate positive social-psychological states, and to develop stable neighborhoods and communities. Homeownership and mortgage obligations do not inherently further these objectives, however, and sometimes undermine them. The most visible triggers of the recent surge in subprime delinquency have produced calls for emergency foreclosure avoidance interventions (as well as front-end regulatory fixes). Whatever their merit, I contend that a system of mortgage delinquency management should be an enduring component of housing policy. Furtherance of housing and household policy objectives hinges in part on the conditions under which homeownership is obtained, maintained, leveraged, and - in some situations - exited. Given that high leverage or trigger events such as job loss and medical problems play significant roles in mortgage delinquency independent of loan terms, better origination practices cannot eliminate the need for delinquency management.

One function of this brief essay is to identify an existing rough framework for managing delinquency. Legal scholarship should no longer discuss mortgage enforcement primarily in terms of foreclosure law and instead should include other debtor-creditor laws such as bankruptcy, industry loss mitigation efforts, and third-party interventions such as delinquency housing counseling. In terms of analyzing this framework, it is tempting to focus on its impact on mortgage credit cost and access or on the absolute number of homes temporarily saved, but my proposed analysis is based on whether the system honors and furthers the goals of wealth building, positive social psychological states, and community development. Because those ends are not inexorably linked to ownership generally or owning a particular home, a system of delinquency management that honors these objectives should strive to provide fair, transparent, humane, and predictable strategies for home exit as well as for home retention. Although more empirical research is needed, this essay starts the process of analyzing mortgage delinquency management tools in the proposed fashion.

Ben Barros

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January 11, 2008 in Real Estate Transactions, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Thursday, January 10, 2008

Underkuffler to Cornell

This is somewhat old news that I missed when it first came out, but Laura Underkuffler is moving from Duke to Cornell.  With Greg Alexander, Eduardo Penalver, and Emily Sherwin already there, Cornell will now have one of the strongest property faculties in the nation.

Ben Barros

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January 10, 2008 in Teaching | Permalink | Comments (0) | TrackBack (0)

Teaching Order - Where Should Sevitudes Go?

It's been a crazy first week of the semester, but I'm finally starting to feel like things are under control.  Earlier in the week, I put together my syllabi for my property classes for this semester.  I'm teaching the second half of property to an evening section, and teaching the whole course to a day section.  This gives me a chance to test something I've been thinking about for a while.

Like most property profs, I have been teaching servitudes late in the course, as part of a larger unit on land use controls.  It has occurred to me, though, that it might make sense to teach servitudes earlier.  Servitudes are non-possessory interests in land, and can logically be placed after a unit on co-ownership of property.  This placement in the course would have the advantage of exposing students to servitudes before the unit on land transactions and title insurance, where many of the issues involve easements and covenants (e.g. marketable title, the warranty against encumbrances, and many recording cases).

So this semester, I'm going to teach servitudes in the traditional way in my evening section, and move it forward in my day section.  I'll let you know how it goes.

Ben Barros

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January 10, 2008 in Teaching | Permalink | Comments (2) | TrackBack (0)

White on Banning Subprime Mortgages

Alan M. White (Valparaiso) has posted The Case for Banning Subprime Mortgages on SSRN.  Here's the abstract:

While the subprime mortgage boom was in full swing, its benefits to American society were widely touted. Subprime mortgages were said to have increased homeownership. The subprime effect was supposed to have been especially strong for low-income and minority families previously unable to buy homes. The democratization of credit was also attributed to subprime mortgages.

The empirical data do not support these welfare claims. The U.S. homeownership rate increased somewhat between 1994 and 2007. Subprime mortgages, however, were mostly made to existing homeowners to refinance debt; very few were made to first-time home buyers. The number of homes lost due to subprime foreclosures significantly exceeded the new homeowners added by subprime mortgages. Subprime mortgages also displaced the safer and lower-cost FHA loans that would otherwise have been made. Conventional prime mortgages for purchases fully accounted for the observed increase in homeownership.

The welfare harms caused by subprime mortgage lending are readily measurable. They include the direct impact of more than two million foreclosures on families, the resulting property value losses, the social and fiscal impact on cities where subprime mortgages were concentrated, the price discrimination resulting in black and Latino homeowners paying unnecessarily high rates, and the broader impacts on the credit markets and the economy.

The disastrous consequences of subprime mortgage lending were in part the result of deregulating mortgage interest rates. Similar harms can be prevented in the future by reimposing reasonable interest rate limits on first-lien mortgages. FHA should be restored to its role as the primary provider of mortgages to first-time, low- and moderate-income home buyers.

Ben Barros

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January 10, 2008 in Real Estate Transactions, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 8, 2008

Two by Freyfogle

Eric Freyfogle (Illinois) has two new posts up on SSRN.  They are:

Private Property: Correcting the Half Truths

Today's discussions about private land ownership and regulatory takings build upon a number of critical assumptions about how private property arises, how it relates to liberty, in what sense it is an individual right, what full ownership entails, and how property rights might legitimately change over time. This essay-excerpted from chapter 1 of a new book, On Private Property: Finding Common Ground on the Ownership of Land-steps back from contemporary debates to probe these fundamental assumptions. The assumptions, it claims, tend to be seriously flawed; they are no more than half-right, and need important revision to provide a solid foundation for evaluating where we stand and charting a course ahead. At root, private property is a social institution, created by law and lawmakers and appropriately revised, generation by generation. Private property does not exist primarily to protect individual liberty; indeed, it curtails liberty as much as it protects it. It makes little sense, also, to claim: that property begins when a person takes first possession of a thing; that private property can somehow be crafted as absolute; and that ownership necessarily entails expansive rights to develop. The situation is more complex, and property rights more pliable, tentative, and morally complex. Scholarly writing on private property would likely improve if commentators turned away from Supreme Court rulings on takings and focused instead on the fundamental elements of private property as an essential tool that society uses and continually reshapes to foster shared goals.

Property's Functions and the Right to Develop

At stake in most contemporary land-use disputes, particularly those involving regulatory takings, is the legal right of land owners to develop or otherwise alter their lands in significant ways. Landowners claim that they possess or should possess this power, while lawmakers conclude that a curtailment of rights would serve the public interest. For various reasons we've had troubles seeing this conflict clearly. What development rights should landowners possess, and what powers should government have to curtail or redefine them? To address these questions we need to see that private property is basically a tool that society uses to promote the common welfare; it is a social institution in which private owners call upon government (including police, courts, and even prisons) to curtail the activities of nonowners. To decide what development options owners ought to possess, given this moral complexity, we need to consider how a sound system of private property can in practice promote the common good.

This essay, drawn from a new book on private property, probes the three basic functions of private land ownership with particular regard for development rights. It also probes how increases in the development value of land are due not to labor expended by owners but to the activities of surrounding landowners as a community. This background sets the stage for answering the central question of development rights. A key conclusion is that, while landowners need and deserve substantial protection from interference with on-going activities, there is much less need to protect their hopes of initiating new land uses in the future. What landowners need most is not some protection against future laws limiting development but instead an assurance that such laws will apply widely to all similarly situated landowners.

Ben Barros

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January 8, 2008 in Property Theory, Recent Scholarship, Takings | Permalink | Comments (0) | TrackBack (0)

Monday, January 7, 2008

First few days of property: roundup of some of our favorite posts

So the new semester's about to start and that means first year students everywhere (or at least at a lot of schools) will be reading cases like Pierson v. Post and Johnson v. M'Intosh.  So I thought I'd round up a couple of propertyprof classic posts on the 1L chestnuts.

Here's some great talk about Pierson (from Rachel Godsil).
Go to school where Heppingstone v. Mammen is taught instead of Pierson?  Check out Carl Christensen's post on "the whale case."
Don't like how your property course is beginning, here are some other ways it might have begun.
Want to get a sense of what's coming?  Check out the five minute property class.
And want to see some faculty discuss their favorite cases?  Check out Ben Barros' post on favorite cases. That discussion is always sure to stir debate over Stambosky.

And for faculty, Rose has some advice here (and me here).

Other classic posts we should be linking to here?

Al Brophy
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January 7, 2008 in Teaching | Permalink | Comments (0) | TrackBack (0)

Saturday, January 5, 2008

Gary Rosin on ABA's Proposal Regarding Bar Pass Rates and Accreditation

We've been following South Texas Law Professor Gary Rosin's important work on bar pass rates for a while and its implications for the ABA's consideration of modifications to its law school accreditation standards

Here is Professor Rosin's latest report, which discusses the ABA's December 2007 draft of interpretation 301-6.  (You'll also want to read Rosin's Unpacking the Bar Exam: Of Cut Score, Competence, and Crucibles, available on ssrn.)  There current proposal is as follows (I've put it in green to make it distinguish it from the rest of the text):

    Proposed Interpretation 301-6  (Approved for Notice & Comment 12-1-07)

A.  A law school’s bar passage rate shall be sufficient, for purposes of Standard 301(a), if the school demonstrates that it meets any one of the following tests:
   
1)  That for students who graduated from the law school within the five most recently completed calendar years:

    (a) 75 percent or more of these graduates who sat for the bar passed a bar examination, or
    (b) in at least three of these calendar years, 75 percent of the students graduating in those years and sitting for the bar have passed a bar examination.

In demonstrating compliance under sections (1)(a) and (b), the school must report bar passage results from as many jurisdictions as necessary to account for at least 70% of its graduates each year, starting with the jurisdiction in which the highest number of graduates took the bar exam and proceeding in descending order of frequency. 

2)  That in three or more of the five most recently completed calendar years, the school’s annual first-time bar passage rate in the jurisdictions reported by the school is no more than 15 points below the average first-time bar passage rates for graduates of ABA-approved law schools taking the bar examination in these same jurisdictions.

In demonstrating compliance under section (2), the school must  report first-time bar passage data from as many jurisdictions as necessary to account for at least 70 percent of its graduates each year, starting with the jurisdiction in which the highest number of graduates took the bar exam and proceeding in descending order of frequency.  When more than one jurisdiction is reported, the weighted average of the results in each of the reported jurisdictions shall be used to determine compliance.

B.  A school shall be out of compliance with the bar passage portion of Standard 301(a) if it is unable to demonstrate that it meets the requirements of paragraph A (1) or (2).

C.  A school found out of compliance under paragraph B, and that has not been able to come into compliance within the two year period specified in Rule 13(b) of the Rules of Procedure for Approval of Law Schools, may seek to demonstrate good cause for extending the period the school has to demonstrate compliance by submitting evidence of:

(i)  The school’s trend in bar passage rates for both first-time and subsequent takers: a clear trend of improvement will be considered in the school’s favor, a declining or flat trend against it.

(ii) The length of time the school’s bar passage rates have been below the first-time and ultimate rates established in paragraph A: a shorter time period will be considered in the school’s favor, a longer period against it.

(iii) Actions by the school to address bar passage, particularly the school’s academic rigor and the demonstrated value and effectiveness of the school’s academic support and bar preparation programs: value-added, effective, sustained and pervasive actions to address bar passage problems will be considered in the school’s favor; ineffective or only marginally effective programs or limited action by the school against it.

(iv) Efforts by the school to facilitate bar passage for its graduates who did not pass the bar on prior attempts: effective and sustained efforts by the school will be considered in the school’s favor; ineffective or limited efforts by the school against it.

(v) Efforts by the school to provide broader access to legal education while maintaining academic rigor: sustained meaningful efforts will be viewed in the school’s favor; intermittent or limited efforts against it.

(vi) The demonstrated likelihood that the school’s students who transfer to other ABA-approved schools will pass the bar examination:  transfers by students with a strong likelihood of passing the bar will be considered in the school’s favor, providing the school has undertaken counseling and other appropriate efforts to retain its well-performing students.

(vii) Temporary circumstances beyond the control of the school, but which the school is addressing: for example, a natural disaster that disrupts the school’s operations or a significant increase in the standard for passing the relevant bar examination(s).

(viii) Other factors, consistent with a school’s demonstrated and sustained mission, which the school considers relevant in explaining its deficient bar passage results and in explaining the school’s efforts to improve them.

Rosin finds the most recent proposal for 301-6(A)(1) "is a major step forward in at least two respects. First, to a certain extent, it takes into account cumulative Bar passage rates, including subsequent Bar passage by those who failed on the first attempt. Second, for purposes of calculating a school’s cumulative Bar passage rate, its graduates from the relevant years are considered as a group."  He identifies other problems with the proposal and concludes, "An empirical analysis of projected difference scores shows that the minus 15% difference score standard will disproportionately affect both historically black law schools, as well as law schools with part-time programs."

Of particular interest to law professors is a table, which lists 17 schools at "high risk" and another 11 schools at "moderate risk" for problems under the proposed standards.

Update:  If you'd like to see all of Professor Rosin's reports collected in one place, they're available here.  Over at concurringopinions.com, Dave Hoffman's been following this story and some time ago Bill Henderson at elsblog.org discussed bar pass scores as well.  Also, I had a little on this over at money-law some time ago and here.

Alfred L. Brophy
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January 5, 2008 in Law Schools | Permalink | Comments (0) | TrackBack (0)

Advice to Law Journals, Part 21

21  publish cartoons

This idea I got from the Journal of Legal Education.  Seems a little strange at first, but I think there're some possibilities in doing innovative things.  I think of publishing cartoons as a metaphor for innovative things.  And, hey, you might have something as entertaining as The Road to Serfdom in cartoons!  You'll recall that we've spoken a little bit about this before in this series (way back in August).

Remember, thought, that doing funky things--like publishing cartoons--can easily be overdone.  A little bit of innovation goes a long way.

Alfred L. Brophy
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January 5, 2008 in Law Schools | Permalink | Comments (1) | TrackBack (0)

Thursday, January 3, 2008

More Property Poetry

Cole_landscape_1825 While all the cool people are in New York for AALS, I'm sitting here in Tuscaloosa.  So I thought that I'd post a little more property poetry.  Like my most recent property poetry post (on John Rueben Thompson's poem about the sale of Virginia's Natural Bridge), this will be from the nineteenth century.  Actually, I think there are a couple worth using here, from William Cullen Bryant.  First, there is Bryant's poem to landscape painter Thomas Cole on Cole's departure for Europe in 1829:

Thine eyes shall see the light of distant skies;
Yet, Cole! thy heart shall bear to Europe's strand
A living image of our own bright land,
Such as upon thy glorious canvas lies;
Lone lakes--savannas where the bison roves--
Rocks rich with summer garlands--solemn streams--
Skies, where the desert eagle wheels and screams--
Spring bloom and autumn blaze of boundless groves.
Fair scenes shall greet thee where thou goest-- fair,
But different--everywhere the trace of men,
Paths, homes, graves, ruins, from the lowest glen
To where life shrinks from the fierce Alpine air.
Gaze on them, till the tears shall dim thy sight,
But keep that earlier, wilder image bright.

Then there is Bryant's Ages, delivered to the Harvard Phi Beta Kappa Society in 1821, which is closely related to Thomas Cole's series of landscapes, Course of Empire.  A few stanzas below illustrate Bryant's image of changes related to property ownership and use from the Natives to the European settlers:

There stood the Indian hamlet, there the lake
Spread its blue sheet that flashed with many an oar,
Where the brown otter plunged him from the brake,
And the deer drank: as the light gale flew o'er,
The twinkling maize-field rustled on the shore;
And while that spot, so wild, and lone, and fair,
A look of glad and guiltless beauty wore,
And peace was on the earth and in the air,
The warrior lit the pile, and bound his captive there:

XXXI.

Not unavenged—the foeman, from the wood,
Beheld the deed, and when the midnight shade
Was stillest, gorged his battle-axe with blood;
All died—the wailing babe—the shrieking maid—
And in the flood of fire that scathed the glade,
The roofs went down; but deep the silence grew,
When on the dewy woods the day-beam played;
No more the cabin smokes rose wreathed and blue,
And ever, by their lake, lay moored the light canoe.

XXXII.

Look now abroad—another race has filled
These populous borders—wide the wood recedes,
And towns shoot up, and fertile realms are tilled:
The land is full of harvests and green meads;
Streams numberless, that many a fountain feeds,
Shine, disembowered, and give to sun and breeze
Their virgin waters; the full region leads
New colonies forth, that toward the western seas
Spread, like a rapid flame among the autumnal trees.

XXXIII.

Here the free spirit of mankind, at length,
Throws its last fetters off; and who shall place
Or curb his swiftness in the forward race!
Far, like the cornet's way through infinite space
Stretches the long untravelled path of light,
Into the depths of ages: we may trace,
Distant, the brightening glory of its flight,
Till the receding rays are lost to human sight.

You may recall that Asher Durand painted a portrait of Cole and Bryant in the Catskills together, Kindred Spirits.  (Another interesting story here--it was purchased by Alice Walton recently as an anchor of her art collection.)  And as long as we're talking about Cole and Bryant, you might be interested in reading Bryant's oration on Cole's death.

Next up: Bryant's Thanatopsis.

Endnote: Cole's 1825 landscape is from wikipedia.

Alfred L. Brophy
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January 3, 2008 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 2, 2008

Papers for AALS Junior Property Scholars Works-in-Progress Panel

I hope that those of you who are heading to New York will attend the Junior Property Works-in-Progress panel on Sunday morning at 9:00 a.m.  The two papers being presented are now available for download if you want to read them in advance - click on the link after the title for a PDF version.  The papers are:

Nestor Davidson, Standardization and Pluralism in Property Law.  Download Davidson.pdf

Lee J. Strang:  Damages as the Appropriate Remedy for "Abuse" of an Easement:  Moving Towards Consistency, Efficiency, and Fairness in Property Law.  Download Strang.pdf

Hope to see you there!

Ben Barros

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January 2, 2008 in Conferences, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Private Road Act Litigation

Pennsylvania has a Private Road Act that allows owners of landlocked parcels to condemn a private road for access to a nearby public road.  The Pennsylvania courts have interpreted the Private Road Act as requiring a degree of necessity that is short of strict necessity but that still imposes a fairly high hurdle for the petitioner.  In re Packard, 926 A.2d 557 (Comm. Ct. 2007) is an interesting example.  Petitioners had access to their property through a run-down private road.  They argued that use of this road was impractical; the court rejected their claim because they had not met their burden to prove necessity.  The case is discussed in this story from the Harrisburg Patriot News, though the story doesn't really capture the role of necessity in the court's analysis.

Ben Barros

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January 2, 2008 in Land Use, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Panel on Eminent Domain Reform

For those of you who are going to be in NY this week, Ilya Somin has organized a panel Friday morning on eminent domain reform at the Federalist Society's parallel conference.

Ben Barros

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January 2, 2008 in Conferences | Permalink | Comments (0) | TrackBack (0)