PropertyProf Blog

Property, Student Notes, and Elite Law Schools

Andrew Yaphe (Stanford Law School) has posted Taking Note of Notes: Student Legal Scholarship in Theory and Practice.  At its core, the piece provides "an empirical analysis of recent student notes, enabling the reader to get an overview of the forms that student scholarship has actually taken over the past few years."  The whole thing is worth reading, but there are some bits of information that will be of special interest to Property Profs. 

Yaphe found that at "non-elite" schools, property was the fourth most popular subject for student notes, accounting for 7% of the total. In contrast, the sample of student notes from elite institutions (three years worth of pieces from Yale, Virginia, Stanford, Northwestern, Michigan and Columbia), contained only 4 articles (2%) about property issues.  Yaphe goes on:

This disparity becomes more significant when one examines the elite notes on property law more closely.  Three of those elite notes were empirical analyses of aspects of property law in local communities; these notes, in their methodological approach and conceptual stance, were all strongly influences by the work of Robert Ellickson.  In other words: If it weren't for property law notes written under the aegis of Ellickson, there would hardly be any elite property law notes at all. (emphasis added)

That's a stunning finding.  Yaphe hypothesizes that the "disparity of notes on property law may reflect the status of the course in American law schools.  The course tends to be underempahsized at elite law schools . . . while getting more attention at non-elite law schools . . . ."  There's probably something to that explanation, but I'm not sure it fully explains the difference.  My bet is that the local nature of property law (and family law - another subject ignored by elite schools) doesn't lend itself to the kind of sweeping national-level reforms that folks at elite law schools tend to make.  I also wonder if the number of "not-property" people teaching property courses leads to a lack of property mentors.  

Steve Clowney

Hat tip to Joseph Blocher for passing this article along.

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Teaching Zoning Soon?

You could construct a whole course out of this map, published by the Minneapolis Council of Social Agencies in 1937 and more recently re-appearing in this book.  Hat tip to Professor Diane Dube of the Mitchell Community Development Clinic for pointing it out to me.  I could stare at it, slack-jawed, for hours. 

Some interesting things to consider:

• The map appears to recognize that both "Negroes" and "Foreign Born" might live in either "Slums" and or in neighborhoods of "Working-Men's Homes."  That suggests to me that the presence of African-Americans and immigrants, alone, was not enough to cause a neighborhood to be labeled a slum -- which, while not exactly a ringing endorsement of pluralism, was still probably slightly more enlightened than some places in 1937. 
• There is an area cleverly called "Hobohemia" which I guarantee you was the most interesting part of the city.  I wonder if it existed only during the Depression, or if it was a sort of longstanding eccentric neighborhood.
• There is a section oddly called "Business Automobiles." 

I am fairly certain the map was intended to be merely descriptive, not prescriptive.  Nonetheless, it's fascinating.

Mark A. Edwards

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 UPDATE:  Here is the 'Chicago School' map referenced by Kenneth Stahl in his comment in the comments section below.  Please read his comment for lots of great information about these maps, and about an interesting article he is working on:

 

Shameless Self-Promotion Department

For those interested, my article Acceptable Deviance and Property Rights has now been published in the Connecticut Law Review.  Here's the abstract:

Compliance with - or deviance from - law is often dependent upon the law’s convergence with - or divergence from - normative sensibilities. Where the legality and social acceptability of behavior diverge, some deviance is socially acceptable. Property rights evolve in response to changes in normative sensibilities. Constructing a model of acceptable deviance and applying it to property rights, we can predict and actually observe the evolution of property rights in response to changes in normative sensibilities in areas as diverse as file-sharing, foreclosures, the use of public space, and fishing rights. We can also predict and observe stresses in legal institutions created by divergences in the legality and social acceptability of behavior with regard to property rights. Law functions as an anchor on behavior, providing stability, but also space for deviance which permits the evolution of property rights.

Mark A. Edwards

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White House Releases Plan for the Future of Housing Financing Market

The White House released a proposal today that would dramatically alter the long-term future of the American housing financing market, in ways that are almost as important and fundamental as the creation of the FNMA (later Fannie Mae) in 1938.

Starting in 1938, the U.S. government created and became the most important -- and often only -- player in the secondary mortgage market.  The FNMA bought loans and mortgages from banks, thereby allowing lenders to transfer the risk of default, but only if those loans met certain quality standards.  The secondary mortgage market was a great success and was responsible for much of the post-war housing boom in America.  The FNMA was semi-privatized in 1968, becoming Fannie Mae.  It helped created the mortgage-backed securities market, but when faced with competition from other players in the secondary mortgage market who captured market share by purchasing and securitizing loans that didn't meet its quality standards, Fannie Mae lowered its standards.  Because the appetite of investors for mortgage-backed securities was voracious, there was soon a race to the bottom through subprime lending.  Because Fannie Mae still had special privileges with regard to taxation and borrowing from the federal government, many investors assumed or gambled that Fannie Mae would be rescued by the federal government in the event it began to crash.  It did, and they were right.

The new plan's main objective is to release the United States from it's role as a de facto backstop for Fannie Mae, so that taxpayers aren't liable for reckless lending -- and presumably, so that reckless lending is less likely since liability for it will stay with lenders.  It offers 3 paths to that goal, essentially gradations of the same objective -- either (1) limiting its backstop role to certain targeted borrowers (such as lower income borrowers purchasing affordable housing), who meet the previously enforced Fannie Mae quality standards; (2) limiting its role to those borrowers during a time of crisis; or (3) eliminating its backstop role entirely. 

If implemented, any of these plans is likely to raise the cost of borrowing, since the risk of default must be priced into the private market system in ways that it may not have been previously.  I intend to write more about the plan's implications as I have more time to study it, but it is safe to say that what is envisioned is a reduced participatory role for the government in home lending; what isn't yet clear to me is whether the regulatory role of the government will increase or decrease correspondingly.

An apparently ideologically-distasteful truth in this mess is that the FNMA worked very well from 1938 to 1968.  But there is no stomach now for a government agency capturing an entire private market, even though it was able to impose quality standards that kept the market stable and functioning.  Since there is no stomach to dominate the market, the question is whether any participation is appropriate.  The plan's answer: perhaps, but only in the most limited sense.  My concern is that in the absence of significant particpation, quality assurance can only be achieved either by extensive oversight, or by rules that cause lenders to impose quality on themselves.

Given that, I still like my half-baked idea: lenders can make loans on whatever terms they choose, but they can't sell them all on the secondary market.  Instead some percentage -- let's say 20% -- must stay in-house in the portfolio of the originator.  But here's the key: that 20% is chosen randomly, by some computer sitting in a government agency that knows only the loan number.  It's lending Russian roulette.  Lenders can decide there own risk tolerance, but they can't fully escape it.  That should reduced the number of risky loans.

Meanwhile, the 80% of loans that enter the secondary market create capital for home lending.

Got another idea?  Speak up -- let's get in on the conversation about the future of housing finance in the United States.  If not us, who?

Mark A. Edwards

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Merrill and Smith on Making Coasean Property More Coasean

Tom Merrill (Columbia) and Henry Smith (Harvard) have posted Making Coasean Property More Coasean (Journal of Law and Economics).  Here's an abstract:

In his pioneering work on transaction costs, Ronald Coase presupposed a picture of property as a bundle of government-prescribed use rights. This picture is not only not essential to what Coase was trying to do, but its limitations emerge when we apply Coase’s central insights to analyze the structure of property itself. This leads to what we term the Coase Corollary: in a world of zero transaction costs the nature of property does not matter to allocative efficiency. But as with the Coase Theorem itself, the real point is the implication for a positive transaction cost world: we need to subject the notion of property to a comparative institutional analysis. Because transaction costs are positive, it is no accident that property is defined in terms of things as a starting point, that uses are grouped under exclusion rights, and that in rem rights are widely employed: these features of property receive a transaction cost explanation. Simple lumpy packages of property rights motivated by transaction costs form an important baseline that furnishes presumptive answers to bilateral use conflicts. A more thoroughly Coasean approach points back to a picture of property more like the traditional one furnished by the law.

Steve Clowney

On the Business of Selling Human Body Parts

Wired magazine has an excellent feature on the (black)market for human body parts.  The piece has lots of neat (if ghoulish) factoids.  I, for example, would have guessed that skin sells for more than $10 a square inch...

Steve Clowney

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An Inside Look at Buying Rent Controlled Apartments

This weekend the N.Y. Times ran a story on the murky world of developers who buy rent-controlled buildings and then attempt to buy-out the tenants:

A whole industry is built around paying tenants to move, and it is cloaked in mystery. Developers, seeking to spend as little as possible, make offers quietly and individually. Neighbors, wary of spoiling a deal, don’t talk to one another about those offers. There are no guidelines to help people figure out what an apartment is worth, and no easy ways to calculate the emotional toll that comes with moving from a home, sometimes after decades.

This article might be useful for some PropertyProfs - it subtly but clearly points out a lot of the problems with rent control.  First, the piece shows how rent-controlled apartments randomly assign windfalls to some members of the community.  Second, the author choose to interview a really unsympathetic tenant - the tenant isn't a long-time resident looking for protection from gentrification, but an artist who moved to New York and found the apartment through "the friend of a friend" of her mother.  Third, it discusses how landlords may neglect tenants in rent-controlled units.  Finally, the piece demonstrates how rent control creates distortive pressures for tenants to remain in specific units, even when economic opportunities pop-up in other geographic areas.  Even though I'm not in the pro-rent control faction, this seems like a bit of a hatchet job.  Check out New York magazine's much shorter and more value-neutral piece as a comparison.

Steve Clowney 

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Buffalo Law Conference on Hydrofracking

Save The Date and Call for Presentations

Hydrofracking: Exploring the Legal Issues in the Context of Politics, Science, and the Economy

March 28-29, 2011 at University at Buffalo School of Law

Buffalo, New York

On March 28-29, 2011 the University at Buffalo Environmental Law Program and the Baldy Center for Law and Social Policy will host the conference: Hydrofracking: Exploring the Legal Issues in the Context of Politics, Science and the Economy. Horizontal-gas drilling involving hydraulic fracturing, also known as hydrofracking or fracking, and its potential effects is an important environmental and energy concern for the nation. This conference provides an opportunity for a scholarly exchange of ideas regarding the issue as well as a forum for community discussion.

We welcome submissions on any related topic, including the following:

·         Hydrofracking and Nuisance Law
·         Impacts on Tribal Lands
·         Administrative law and the EPA Rulemakings
·         Environmental Review Processes    
·         Application of federal environmental laws, including the Clean Water Act and Clean Air Act
·         Energy issues, in including the Energy Policy Act and DOE policy
·         Endocrine Disruption and Human Health Impacts

Authors will have an opportunity to publish their work in the Buffalo Environmental Law Journal. You are invited to submit a paper or presentation proposal for of no more than 250 words by Monday, February 21st to [email protected].

For more information, contact Jessica Owley [[email protected] or 716-645-8182] or Kim Diana Connolly [[email protected] or 716-645-2092]

 

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The Packers, Property and Community: Updated

I agree whole-heartedly with Steve's great post, but when we're talking about football, property and community, we have to talk about the beloved Packers.  The Packers are the only NFL team actually -- not metaphorically -- owned by the community.  When you see the crowd at Lambeau, you're looking at the owners.  Here's a shot of the Packers' ownership group getting the stadium cleared of snow:

 

Green Bay, a city with a population that could actually easily fit within Cowboys Stadium, is by far the smallest community that has an NFL team, and they've still got it for only one reason -- 120,000 shareholders who live and work and grow old and drop dead in Green Bay. 

Just imagine if the NFL could go back to the Packers model -- no more Baltimore Colts disappearing in the middle of the night, no more Raiders abandoning Oakland for L.A. and then abandoning L.A. for Oakland.  It is appropriate, as Steve suggests, that a community's conception of itself rooted in a team be protected by a property right.  In one place, it is. 

Much respect to the Steelers, the Rooneys, Jack Ham, Jack Lambert, Andy Russell, Mean Joe, Rocky Bleier, the ghost of Mike Webster, hell even Roy Gerela.  I love the Steelers.  I love their brand of football and their tradition.  Other than the Packers, I doubt any community is as deeply invested in its football team as Pittsburgh is in the Steelers.  If the Packers lose on Sunday, the fact that the Steelers will have won will take a lot of the sting out of it.

But as I discovered during my 14 year sojourn in Wisconsin, once you get to know the Packers tradition, it's almost impossible not to love them. 

No offense, Steve! (but a great defense)

Mark A. Edwards

 

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Update:

A Packer's fan celebrating at Lambeau today makes the point:

 

Congrats to the Steelers on yet another great season, and thanks to Steve for being a great sport.  And what a beautiful family!

 

 

On Property, Community, and the Steelers

The great Liverpool coach Bill Shakly once remarked, "Some people believe football is a matter of life and death. I am very disappointed with that attitude. I can assure you it is much, much more important than that."

I have no problem admitting that I feel this way about The Pittsburgh Steelers.  I care about them deeply.  Maybe too much.  At times, I've let the team get too enmeshed with the contours of my emotional life.  The Santonio Holmes catch to win the Super Bowl in 2009 easily ranks as the best, most emotionally raw moment of my life.  I know, I know.  It sounds awfully pathetic - but what's better than a last minute victory in a Championship game? Childbirth, as Nick Hornby has written, is extraordinary and moving, but it lacks that critical element of surprise.  Promotions and awards are nice, but they lack the last-minute time factor and suddenness.  And, of course, they certainlly don't have the wonderful communal aspect of sports.  So please, don't look down on those of us who love the game too much.  

With all that in mind, and in honor of Super Bowl weekend, I wanted to link to a neat article that fleshes out some of these points.  Avital Margalit's Article, You’ll Never Walk Alone: On Property, Community, and Football Fans, argues that the law should recognize that fans have a property interest in the teams they follow.  I think this idea has some merit.  In Pittsburgh at least, the football team is deeply entangled with the community's conception of itself.  It's easy to romanticize this and let the whole thing get out of hand, but it doesn't seem all that inappropriate to protect such devotion with some property rule.  As Margalit writes, "fans belong to the club and to their community, and the club, al least in part, belongs to them."

 

Steve Clowney

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Resources for Property Profs -- DIRT Listserv

If you are not currently subscribed to the DIRT listserv, I recommend that you check it out.  The listserv is moderated by Professor Pat Randolph of University of Missouri at Kansas City Law School.  It is one of the few places where law school professors and practitioners debate ideas, and share new cases and developments in the law.  It is a great resource to find "real world" examples to highlight property doctrine as well as to keep a finger on the pulse of the profession.

The listserv is moderated, and sometimes Professor Randolph adds commentary or answers a question.  The listserv generates approximately 20 messages a week.  As one would expect, the participants are very interested in new cases involving mortgages and foreclosures, so traffic picks up when a new decision is handed down.

You can check out the website here which gives instructions for signing up.  I highly recommend it.

What other resources should Property Profs be aware of?  Please add ideas in the comments.

Tanya Marsh

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COP Hearing on Commercial Real Estate and Banks

The Congressional Oversight Panel will be holding a hearing tomorrow, February 4th at 10:00 a.m. in room 538 of the Dirksen Senate Office Building to "examine the current state of the commercial real estate market and its implications for bank stability and returns to the Troubled Asset Relief Program."  Since, as I mentioned yesterday, I am writing a paper on this very topic, I am abnormally interested in this hearing.  The witnesses will be:

            Sandra Thompson, Director, Division of Supervision and Consumer Protection, Federal Deposit Insurance Corporation

Patrick Parkinson, Director, Division of Banking Supervision and Regulation, Board of Governors of the Federal Reserve

David Wilson, Deputy Comptroller for Credit and Market Risk, Office of the Comptroller of the Currency

            Matthew Anderson, Managing Director, Foresight Analytics

Richard Parkus, Executive Director, Morgan Stanley Research

Jamie Woodwell, Vice President of Commercial Real Estate Research, Mortgage Bankers Association

The COP held a similar hearing in May 2009 and issued a very thorough report last February which I have found very useful in my research and as a teaching tool.

The COP hearing will be webcast live on the website or you can wait a few months and read the report.

Tanya Marsh

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Brigham-Kanner Property Rights Conference

The good folks at William & Mary have announced the program for the Eighth Annual Brigham-Kanner Property Rights Conference.  The conference will be making its international debut in Beijing, China on October 14-15, 2011. The organizers will recognize Sandra Day O'Connor for her "commitment to upholding the constitutional protections afforded to property rights."  Property profs will be most familiar with her dissent in Kelo, but it should also be noted that during her time in the Arizona legislature she worked tirelessly to bolster property rights for women who owned property jointly with their husbands.

The theme of the conference is "Comparative Property Rights" and panel discussions will focus on "Property as an Economic Institution," "Culture and Property", and the Environment.

Steve Clowney

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Davidson from Colorado to Fordham

As a Fordham alum, I'm delighted that my good friend Nestor Davidson is joining the faculty at Fordham from the University of Colorado at Boulder.

Ben Barros

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The Commercial Real Estate Debt Crisis and Online Law Reviews

The Harvard Business Law Review Online just published a short essay that I wrote about the commercial real estate debt crisis.  As readers of the blog may recall, I am working on a much larger piece that will analyze the current problems suffered by the commercial real estate sector and evaluate potential policy responses.  I'm trying to get that finished within the next month or so.  (One problem with writing an article so focused on numbers -- you have to update it every quarter.  I just need to finish it before first quarter is over!)

Anyway, the piece published at HBLR.org focuses on one sliver of that larger paper -- understanding what the commercial real estate debt crisis is and why it happened in the context of considering an the appropriate governmental response.  I think that some policymakers have adopted the narrative of the residential crisis (irresponsible borrowers, greedy banks) and applied it to commercial real estate, without supporting empirical evidence.  Because that narrative assigns moral blame to the borrowers and banks for their respective roles in the crisis, it impacts policy choices and political support.

This is the first of two pieces that I wrote specifically to be published in online law reviews (the second will be published by Columbia Law Review Sidebar in a few weeks).  Both are off-shoots of larger pieces that I'm working on.  It wasn't too time-consuming to write them, and I think that the vehicle is well-suited for smaller, more concise arguments that may be more widely read because they are shorter. 

I'd love to hear your thoughts, either about the HBLR piece, or the idea of publishing in online law reviews at all.

Tanya Marsh

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Recent SSRN Downloads

In honor of the beginning of the month, here are the most downloaded property articles over the last 60 days.  There's been a noticeable shakeup since last month:

1.  [499 downloads] Mortgage Servicing by Adam J. Levitin (Georgetown) and Tara Twomey (National Consumer Law Center)

2.  [254 downloads] Lady Bird Deeds: A Primer for the Texas Practitioner by Gerry W. Beyer (Texas Tech) and Kerri M. Griffin

3.  [115 downloads] Foreclosures, House Prices, and the Real Economy by Atif R. Mian (Berkeley – Business), Amir Sufi (Chicago – Business), and Francesco Trebbi (British Columbia – Econ)

4.  [98 downloads] Degrees of Property by Peter G. Turner (Cambridge)

5.  [82 downloads] Zoning for Off-Campus Fraternity and Sorority Houses by Patricia Salkin (Albany) and Amy Lavine (Albany)

6.  [78 downloads] The Subprime Crisis: How Much Did Lender Regulation Matter? By Robert B. Avery (Federal Reserve) and Kenneth P. Brevoort (Federal Reserve)

7.  [70 downloads] Government Entrepreneurs: Incentivizing Sustainable Businesses as Part of Local Economic Development Strategies by Jonathan D. Rosenbloom (Drake)

8.  [53 downloads] Remedies, Rights, and Properties by Hanoch Dagan (Tel Aviv)

9.  [52 downloads] An Idea of American Indian Land Justice: Examining Native Land Liberation in the New Progressive Era by Richael Faithful (American)

10.  [50 downloads] Solar Energy's Cloudy Future by Robert Glennon (Arizona) and Andrew M. Reeves (Arizona)

Steve Clowney