PropertyProf Blog

When Property Disputes Get Personal

The New York Times chronicles how disputes over fracking are rupturing relationships in a number of small towns:

The dispute has pitted neighbor against neighbor, and has often set people who live in suburbs or villages against the farmers and landowners who live outside them. The discord is compounded by hard times on both sides and by communication online giving everyone instant access to limitless information confirming their point of view.

Steve Clowney

The Fastest Growing Cities in the World

From Foreign Policy, here are the seven fastest growing cities in the world:

whereas it once was the alpha world cities such as New York, London, and Shanghai that were the primary magnets for young people looking to make their fortunes, now a surprising new crop of boomtowns, from the Middle East to Mali, are seeing their populations leapfrog to the top of the list.

Steve Clowney

Chan, Gedal, Been, and Haughwout on The Role of Neighborhood Characteristics in Mortgage Default Risk

Sewin Chan, Michael Gedal, Vicki Been, and Andrew Haughwout have posted The Role of Neighborhood Characteristics in Mortgage Default Risk: Evidence from New York City on SSRN.  Here's the abstract:

Using a rich database of non-prime mortgages from New York City, we find that census tract level neighborhood characteristics are important predictors of default behavior, even after controlling for an extensive set of controls for loan and borrower characteristics. First, default rates increase with the rate of foreclosure notices and the number of lender-owned properties (REOs) in the tract. Second, default rates on home purchase mortgages are higher in census tracts with larger shares of black residents, regardless of the borrower’s own race. We explore possible explanations for this second finding and conclude that it likely reflects differential treatment of black neighborhoods by the mortgage industry in ways that are unobserved in our data.

Steve Clowney

Friday's Architecture Moment

A slideshow documenting Picasso's influence on architecture:

The fact that historically, there has only been a single movement of contemporary architecture officially related to cubism - Czech Cubism, does not imply the impact of cubism upon architecture was limited. Although brutalist and futurist architecture are usually cited as being the architecture movements most directly derivative of cubism, I think it is much more accurate to claim that the better part of contemporary architecture is in fact still informed by the legacy of cubism.

Steve Clowney

John Muir at Bonaventure

We left Winston-Salem on Tuesday afternoon to spend a few days in Disney World.  We stopped for the night in Savannah.  I'd never visted Bonaventure Cemetery, made famous in "Midnight in the Garden of Good and Evil," but somehow I convinced my family to make a quick stop. 

John Muir, the famous naturalist, wrote about Bonaventure Cemetery in his 1916 book "A Thousand-Mile Walk to the Gulf."  Chapter 4 is entitled "Camping Among the Tombs," and in it he describes sleeping at Bonaventure.  Here are a few things he had to say about the experience:

"If that burying-ground across the Sea of Galilee, mentioned in Scripture, was half as beautiful as Bonaventure, I do not wonder that a man should dwell among the tombs. ...

There is but little to be seen on the way in land, water, or sky, that would lead one to hope for the glories of Bonaventure. The ragged desolate fields, on both sides of the road, are overrun with coarse rank weeds, and show scarce a trace of cultivation. But soon all is changed. Rickety log huts, broken fences, and the last patch of weedy rice-stubble are left behind. You come to beds of purple liatris and living wild-wood trees. You hear the song of birds, cross a small stream, and are with Nature in the grand old forest graveyard, so beautiful that almost any sensible person would choose to dwell here with the dead rather than with the lazy, disorderly living. ...

The most conspicuous glory of Bonaventure is its noble avenue of live-oaks. They are the most magnificent planted trees I have ever seen, about fifty feet high and perhaps three or four feet in diameter, with broad spreading leafy heads. The main branches reach out horizontally until they come together over the driveway, embowering it throughout its entire length, while each branch is adorned like a garden with ferns, flowers, grasses, and dwarf palmettos."

Based on my visit to Bonaventure Cemetery, nearly 100 years after Muir, his observations are spot-on. 

Tanya Marsh

Salkin on the Ethical Considerations That Arise in the Land Use Context

Patricia Salkin (Albany) has posted Failure to Articulate Clear Ethics Rules and Standards and the Local Level Continues to Haunt Local Land Use Decision Makers (The Urban Lawyer) on SSRN.  Here's the abstract:

This article provides an annual review of reported decisions addressing ethical considerations that arise in the land use context for lawyers, planners, board members and other stakeholders in the land use decision making process.

Steve Clowney

Seicshnaydre on How Government Housing Perpetuates Racial Segregation

Stacy Seicshnaydre (Tulane) has posted How Government Housing Perpetuates Racial Segregation: Lessons from Post-Katrina New Orleans (Catholic Law Review) on SSRN.  Here's the abstract:

This Article contends that post-Katrina New Orleans exemplifies the exclusionary dynamic in which government-assisted housing operates throughout America and the fundamental failure of American housing policy at the federal, state, and local levels to prevent the racial segregation that inevitably results. Federal law has prohibited racial segregation in government-housing programs for decades, yet it has proven difficult to reverse entrenched patterns of segregation in these programs. Patterns of racial segregation have been particularly intractable in New Orleans, which, prior to Hurricane Katrina in 2005, boasted the second-highest level of poverty concentration in the nation and relatively high levels of poverty concentration in all of the major government-housing programs. Furthermore, low-income white residents in pre-Katrina New Orleans had greater access to middle-income neighborhoods throughout the metropolitan area of New Orleans than low-income black residents, who were overwhelmingly concentrated into high-poverty neighborhoods.

Hurricane Katrina, with its massive levee failures and neighborhood flooding, offered an opportunity for New Orleans to emerge as a more inclusive region; new government-assisted housing could have helped facilitate inclusion, while also responding to the regional-housing needs of the area. However, rental housing bans proliferated throughout the region, primarily in communities that had previously served as affordable suburban alternatives for lower- and middle-income whites in prior decades. These communities sought not only to prevent the development of new rental housing, but also to limit the repair of rental housing that preexisted the storm. At the same time, other communities in metropolitan New Orleans that were the least affordable, most homogeneous, and nationally recognized as desirable places to live were not targeted for government-assisted housing, and thus did not pass similar sweeping rental bans. Therefore, rather than using recovery efforts to reverse racially segregated housing patterns, the region took steps to exacerbate them.

This Article describes a perennial dynamic of two impulses pulling in opposite directions - the anywhere-ist and nowhere-ist impulses, which conspire to perpetuate segregation. The anywhere-ists are primarily focused on securing as much federally assisted housing as possible; the nowhere-ists are primarily focused on keeping it out of their communities. This dynamic has created a “path of least resistance,” whereby government-assisted housing continues to be provided in places where it already exists or in places that are already open and affordable.

Ultimately, federal intervention in the housing market must encompass more than providing a subsidy. It must open neighborhoods not already open, make affordable what is not already affordable, enable housing subsidies to act as gateways to educational and employment opportunity, and inform families historically excluded from housing markets about their choices. Any federal housing interventions that are not so designed will almost certainly exacerbate existing racial segregation and poverty concentration, as they have done for decades, and - as post-Katrina New Orleans illustrates - as they will continue to do, again and again and again.

Steve Clowney

From the Weird Patent File

Matt Yglesias discovers that Apple has a patent on this:

This means that virtually every Android phone or tablet computer now infringes on Apple's patents.  Jerry Hildenbrand points out that the worst part of this is that the "slide to unlock" system existed on an old WIndows CE device from 2005. 

Steve Clowney

Whatever Happened to Pruitt-Igoe?

Pruitt-Igoe was an enormous, modernist public-housing complex erected in St. Louis in the mid-1950s.  Almost immediately after construction finished, the complex began to deteriorate.  By the end of the 1960s, most experts agree that Pruitt–Igoe had devolved into a dangerous and crime-infested wasteland.  Even its architect lamented: "I never thought people were that destructive."

In 1972, the complex was famously dynamited.  Sam Jacobs recently took a field trip to see what remains of the area.  Here's his report.

Steve Clowney 

HUD on Housing Recovery After Katrina

The U.S. Department of Housing and Urban Development (HUD) has posted Housing Recovery on the Gulf Coast: Summary Report on SSRN.  Here's the abstract:

Congress frequently provides supplemental appropriations through the U.S. Department of Housing and Urban Development’s (HUD’s) Community Development Block Grant (CDBG) program to help communities recover from natural and manmade disasters. These Disaster Recovery Grants have been used to help New York City recover from the attack on the World Trade Center on September 11, 2001; to help towns in the upper Midwest recover from severe flooding in 1993, 1997, and 2008; and to help the Gulf Coast in the wake of Hurricanes Katrina and Rita in 2005. Recent research by Abt Associates Inc., under contract with HUD, examines how $19.7 billion in Disaster Recovery Grants were used in Louisiana, Mississippi, and Texas to help with recovery from those devastating hurricanes of 2005.

Steve Clowney

Best Places to Visit 2012

National Geographic has announced 20 places that you should visit in its "best of the World 2012" list.  Naturally, my hometown of Pittsburgh makes the list.

Steve Clowney

Case of the Week

Zimmerman v. Hudson (Supreme Court of Kansas)

Facts:  Plaintiffs and intervenors either own property in Wabaunsee County or have purchased wind rights to properties in Wasaunsee County.  They all hoped to develop private land into large-scale commercial windfarms. However, the Board of County Commissioners amended the zoning code to prohibit commercial windfarms.  Plaintiffs brought suit, alleging a taking under the Fifth Amendment and a violation of the Commerce Clause.

Holding:  Plaintiffs had no constitutioanlly protected property interest.  The court reasoned that no property right existed because Plaintiffs would have needed to apply for a conditional use permit to set-up a commercial wind farm before the Board altered the zoning code.  The court remanded the case for more hearings on the question of whether the burden imposed on interstate commerce is clearly excessive in relation to the putative local benefits.

Steve Clowney

Lebovits and Sandercock on Landlord-Tenant Law in New York

Gerald Lebovits (NY City Criminal Court Judge) and Margaret Sandercock have posted New York Residential Landlord-Tenant Law 101 for the Transactional Attorney (NY State Bar Association Journal) on SSRN.  The authors report that the piece "offers the basics of New York landlord-tenat law for lawyers who need to learn the basics quickly."

Steve Clowney

The $500,000 Property Visa

Via the L.A. Times:

Two U.S. senators have introduced a bill that would allow foreigners who spend at least $500,000 on residential property to obtain visas allowing them to live in the United States. The legislation would create a new homeowner visa that would be renewable every three years, but the proposal would not put them on a path to citizenship. To be eligible, a person would have to buy a primary residence of at least $250,000 and spend a total of $500,000 on residential real estate. The other properties could be rented.

The program would come with several restrictions. The purchase would have to be in cash, with no mortgage or home equity loan allowed. And the property would have to be bought for more than its most recent appraised value, Schumer said. The buyer would have to live in the home for at least 180 days each year, which would require paying U.S. income taxes on any foreign earnings. Buyers would no longer be eligible for the temporary visa if the property were sold.

Steve Clowney

Block on Property and Freedom

Walter Block (Loyola New Orleans - Economics) has posted a book review of Richard Pipes' Property and Freedom: The Story of How Through the Centuries Private Ownership Has Promoted Liberty and the Rule of Law (The Quarterly J. of Austrian Economics). 

Steve Clowney

Brescia on Fair Housing Act litigation

Ray Brescia (Albany) has posted "The Iqbal Effect:  The Impact of New Pleading Standards in Employment and Housing Discrimination Litigation" (Kentucky Law Journal, forthcoming) on SSRN.  Here's the abstract:

In May 2009, the Supreme Court issued its decision in Ashcroft v. Iqbal, a case brought by an immigrant of Pakistani descent caught up in the worldwide investigation that followed the horrific attacks of September 11, 2001. In that decision, the Court extended the “plausibility test” first introduced two years earlier, in Bell Atlantic v. Twombly, to all civil pleadings in federal court. That test requires that, in order to satisfy federal pleading requirements, a complaint must allege a plausible set of facts. But what is plausible in a given case may be in the eye of the beholder.

In the two years since the Court reached its decision in Iqbal, that opinion has been cited roughly 25,000 times. The empirical analysis contained in this study attempts to gauge the impact of Iqbal on civil rights cases, specifically cases involving allegations of employment and/or housing discrimination. While several other studies have attempted to answer similar questions, to date, no study has analyzed this impact with reference solely to motions based on the specificity of the pleadings: which is, of course, the central issue in Twombly and Iqbal. In addition, other studies looked exclusively at quantitative results, with no assessment of the manner in which the plausibility standard was being applied by the lower courts. This empirical study attempts to fill that gap in the empirical research.

This study identified over 1850 reported decisions on motions to dismiss in employment and housing discrimination cases filed in federal district court covering the years prior to and after the Court’s decision in Twombly. From this group of cases, a smaller sub-set, totaling 634 cases, was identified by excluding those decisions—included in previous studies—that bore no relation to the issue of the specificity of the pleadings. Furthermore, despite this winnowing process, the sample size for this study was still considerably larger than those analyzed in previous studies.

This detailed study yielded the following results. Surprisingly, the dismissal rate in this class of cases during a set time-period immediately prior to the Twombly decision was actually slightly higher than the dismissal rate of decisions issued in the time period between issuance of the Twombly and Iqbal decisions, but then the rate increases considerably after Iqbal. The dismissal rates for all cases pre-Twombly was 61%; between Twombly and Iqbal, it was 56%; but then after Iqbal, it was 72%, an 18% increase from the pre-Twombly period analyzed. 

In addition, even more troubling, plaintiffs were far more likely after Iqbal than either before Twombly or immediately thereafter to face a motion to dismiss challenging the sufficiency of the pleadings in the cases analyzed. Indeed, decisions on such motions were generated only 12 times in the first quarter of 2004 (the first quarter analyzed in this study), but then 61 times in the third quarter of 2010 (the last full quarter analyzed): a greater than 500% increase. 

Moreover, when it comes to the substance of these decisions, something else appears to be happening. Despite the increased dismissal rate following Iqbal, oddly, in a class of cases analyzed for this study, courts rarely invoked the plausibility standard in the same manner it was utilized by the Court in Twombly and Iqbal; that is, courts rarely found that dismissal was warranted if there was an arguably more plausible, and entirely legal, basis for the challenged conduct. Finally, and similarly, judges rarely, if ever, appear to invoke their own “experience and common sense,” as urged to by the Court, when ruling on motions to dismiss in these cases. 

These outcomes yield three conclusions. First, district courts are using the Iqbal precedent, though not necessarily Twombly, to dismiss employment and housing discrimination cases at an accelerated rate. Second, although courts may be invoking the Twombly/Iqbal plausibility standard in assessing the sufficiency of the pleadings in employment and housing discrimination cases, they are certainly not relying on or utilizing the plausibility standard as articulated in these two precedents. This suggests that the subjective elements of the plausibility standard may be infecting these outcomes. That is, if district court judges are dismissing cases at a higher rate post-Iqbal, yet are not relying on the guidance the Court has given such lower courts in how to deploy the plausibility standard, it would seem that such courts may feel emboldened to dismiss cases that might have survived such a motion had that motion been decided pre-Iqbal. Finally, regardless of whether there is a dramatic Twombly or Iqbal effect on outcomes, motions to dismiss challenging the sufficiency of the pleadings are much more common since Iqbal, which means that even if some plaintiffs are defeating such motions, it still comes at a price: it increases transactions costs in these cases, and may, as a result, have a chilling effect on lawyers contemplating bringing them in the first place.

Tanya Marsh

Federal Government Overhauls HARP

The Federal Housing Finance Authority (FHFA) today announced that it is overhauling the Home Affordable Refinance Program (HARP) in order to make it accessible to more Americans.  HARP allows homeowners who are current on their existing mortgages, but "underwater" (meaning that their loans exceed the value of their homes) to refinance and take advantage of historically low interest rates.  A homeowner who has a loan at 7%, for example, could refinance around 4%, saving hundreds of dollars per month in interest. 

HARP only applies to mortgages owned or guaranteed by Fannie Mae and Freddie Mac.  It only applies to loans where the borrowers are current on their obligations.  Still, the modified program announced today could benefit many homeowners by (1) reducing or eliminating refinancing fees; (2) removing the 125% loan-to-value ratio ceiling for fixed-rate mortgages backed by Fannie and Freddie; (3) eliminating the requirement of an updated appraisal; and (4) extending HARP to December 13, 2013.

HARP has been around since April 2009, but fewer than 900,000 households have taken advantage of the program.  However, based on data provided by FHFA, HARP refinancings have provided the bulk of refinancings in the past two years.  Hopefully, this modified program will help underwater homeowners take advantage of low mortgage rates.

You can read about the program in the press release, in the New York TImes, and in the Wall Street Journal.  (By the way, if you only read one of these -- the WSJ article is the most thorough.)

Although I think that this expansion of HARP is a positive move, it will do little to address the most significant problem facing the residential real estate market.  We (the homeowners of America) remain massively overleveraged.  The residential market and the broader economy cannot recover until a significant deleverage takes place.  Unfortunately, neither the administration nor any of the GOP candidates have proposed a plan that will allow this deleveraging to take place in an orderly fashion.  Our default (pun alert) deleveraging strategy is thus bankruptcy and foreclosure. HARP will help many homeowners make their monthly payments, but lowering interest rates (and presumably adding to the principal through closing costs) will do nothing to help homeowners deleverage.

Just another cheery observation for your Monday afternoon.

Tanya Marsh

Evaluating HOPE VI

The local newspaper in Pittsburgh ran an article this weekend evaluating the city's experience with the HOPE VI housing program:

"Mixed income" has been the mantra in public housing for nearly two decades, since the U.S. Department of Housing and Urban Development started paying local housing authorities to get rid of dense, run-down, crime-plagued "projects." In most cases, far more homes were torn down than built. That means thousands of poor families once boarded by the authority have had to find other arrangements, often with the aid of Section 8 rental vouchers. In the Hill District, for instance, Allequippa Terrace went from 1,749 apartments occupied entirely by poor families paying subsidized rents to 718 homes at rechristened Oak Hill, including 243 households paying market rents.

One thing that always shocks me is how little data exists on what happens to the public housing residents that get displaced under programs like HOPE VI.  Where do they go?  Do their lives get better? Or worse? 

Steve Clowney

Rendering Unto Caesar

A remarkably detailed series of map galleries that illustrate the battlefields and tactics described by Caesar in his Commentary on the Gallic Wars:

In May 2007, I began remapping the Gallic War utilizing Google Earth. This facilitated a very considerable upgrade of both my operational displays and detailed depictions of battlefields. It was particularly exhilarating to be able to zoom in on present-day venues of specific battlefields. I finished the project in August 2007, after some four years of thought and toil.

Steve Clowney

Neighborhood Effects on Health Outcomes

A new study in the New England Journal of Medicine shows that moving poor women to lower poverty neighborhoods improves their health:

scholars from around the country studied 4,498 poor women and children who enrolled in a residential mobility program called Moving to Opportunity. The MTO program enrolled low-income families with children living in distressed public housing. Families volunteered for the experiment, and based on the results of a random lottery, were offered the chance to use a housing voucher subsidy to move into a lower-poverty community. Other families were randomly assigned to a control group that received no special assistance under the program.

At the time of follow-up, 17 percent of the women in the study’s control group were morbidly obese (body mass index at or above 40), and 20 percent had diabetes. However, in the group of women who were offered housing vouchers to move to lower-poverty neighborhoods, the rates of morbid obesity and diabetes were both about one fifth lower than in the control group. “These findings provide strong evidence that the environments in low-income neighborhoods can contribute to poor health,” said Ludwig.

Steve Clowney