PropertyProf Blog

Zoning v. Urbanism

A report from Denver about the conflict between parking requirements (mandated by the local zoning code) and new walkable development projects.

Steve Clowney

Foreclosures Make People Sick

The Wall Street Journal reports that the foreclosures are correlated with bad health outcomes:

New research by Janet Currie of Princeton University and Erdal Tekin of Georgia State University shows a direct correlation between foreclosure rates and the health of residents in Arizona, California, Florida and New Jersey. The economists concluded in a paper published this month by the National Bureau of Economic Research that an increase of 100 foreclosures corresponded to a 7.2% rise in emergency room visits and hospitalizations for hypertension, and an 8.1% increase for diabetes, among people aged 20 to 49. Each rise of 100 foreclosures was also associated with 12% more visits related to anxiety in the same age category. And the same rise in foreclosures was associated with 39% more visits for suicide attempts.

Steve Clowney

Housing Policy and Happiness

Matt Yglesias argues that our national policy of encouraging homeownership ultimately undermines people's well-being and happiness.

Steve Clowney

Zamir on Loss Aversion

Eyal Zamir (Hebrew University) has posted Loss Aversion and the Law (Vanderbilt Law Review) on SSRN.  Here's the abstract:

Why is tort law much more developed than unjust enrichment law? Is there a reason for the very different legal treatment of governmental takings and governmental givings? Why are contract remedies structured around the four ‘interests’ and why is the disgorgement interest only marginally protected? What might explain the much greater constitutional protection of civil and political rights, compared to social and economic ones?

This Article suggests that there is a common denominator to these and other puzzles: they are all best answered on the basis of loss aversion. Psychological studies have established that people do not perceive outcomes as final states of wealth or welfare. Rather, they perceive them as gains and losses, and losses ordinarily loom larger than gains. Loss aversion is thus related to fundamental characteristics of entire legal fields and their relative importance.

The Article also strives to explain the compatibility between loss aversion and the law. According to an evolutionary theory, since losses are more painful than unattained gains, people file lawsuits for recovery of losses much more often than for unattained gains. Consequently, legal doctrines dealing with the former are much more developed. Another theory focuses on the mindset of legal policymakers. Legal thinking largely follows deontological morality. As such, it distinguishes between harming people and not aiding them. This theory highlights an important correspondence between psychology, morality, and law.

Finally, the article explores various normative implications of loss aversion. Among other things, it argues that, ceteris paribus, the law should favor not-giving over taking. Lawmakers should consider the framing effect of legal norms and the impact of loss aversion on policymaking.

Steve Clowney