PropertyProf Blog

Property Dispute Enters Fifth Generation

If you needed any more proof that we're not rational profit maximizers, here's a property dispute from India that caught the attention of the BBC

More than 300 litigants, 30,000 pages of charges and counter-charges, over a dozen lawyers, and 66 years in court. That's how arduous and long the battle between two families in India over a nine-acre (four hectare) plot of land has been. The court case began on 21 April 1947 - a few months before India became an independent country - when Biseshwar Singh of Ekauna village filed a case against fellow villager Har Govind Rai in a court in Ara town, in Bihar's Bhojpur district. [...]

And with the Ganges changing course and inundating the disputed land, most of it has turned into a riverbed. "Who will buy the land now with river flowing over it? The few acres of remaining land will hardly fetch 15,000 rupees ($275; £180)," says Satyanarayan Singh, great grandson of Har Govind Rai. Mr Singh says his family has so far spent 2m rupees ($36,334; £23,837) on litigation, but he appears in no mood to give up fighting.

Steve Clowney

(HT: Nick Blomley)

Craig on Rethinking Sustainability

Robin Craig (Utah) has posted Becoming Landsick: Rethinking Sustainability in an Age of Continuous, Visible, and Irreversible Change (Book Chapter) on SSRN.  Here's the abstract:

This chapter for the Environmental Law Institute's forthcoming book, Rethinking Sustainable Development to Meet the Climate Change Challenge, argues that, in this climate change era, we all need to re-wire ourselves into metaphorical landsickness — that is, into a state where we view constant change as the norm, not as an aberration to be ignored, avoided, or resisted. As a more positive formulation, we need to acquire our climate change sea legs as fast as we possibly can — and that means jettisoning our more mainstream and popular notions of sustainability.

We have entered the era of climate change adaptation, which is most fundamentally about coping with continual, and often unpredictable, change. Adaptation is absolutely necessary because we have passed, definitively, the point of avoiding climate change impacts. It is against this new reality of constant change and threatened disruption that we have to measure the continuing value of “sustainability” — as a concept, as a goal, and as a principle to guide governance and law. Notably, the United States has clung to sustainability even as it has exhibited what might be termed “climate change seasickness” — the denials and refusals to act that have characterized much of the American response to climate change until recently. But sustainability does not help us to adapt to climate change. Instead, sustainability, at least as pursued in the United States, promotes the myth of stationarity and the utopian myth that we can still "have it all."

Climate change thus requires that we replace goals of sustainability with something else, at least for any policy goal more concrete and specific than leaving a functional planet to the next generations. Acquisition of our climate change sea legs, this chapter concludes, would be aided considerably if we adopted three transforming principles for cultural norms, governance goals, and laws and legal institutions:(1) pursue resilience, not the maintenance of particular socio-ecological states; (2) recognize and emphasize that no private right is absolute and that private interests must yield to community survival; and (3) stop avoiding the subject of human population growth.

Steve Clowney

Greece Has No Land Registry (or Why Property Law Matters)

Sometimes things in this country run so smoothly that it's hard for students to see the importance of clear and efficient property rules.  Not every nation is so lucky.  The New York Times recently detailed the title assurance system in Greece (or rather the lack thereof).  This is a great, short piece that I'm putting into the section of my class on real estate transactions:

As Greece tries to claw its way out of an economic crisis of historic proportions, one that has left 60 percent of young people without jobs, many experts cite the lack of a proper land registry as one of the biggest impediments to progress. It scares off foreign investors; makes it hard for the state to privatize its assets, as it has promised to do in exchange for bailout money; and makes it virtually impossible to collect property taxes.

This state of affairs is particularly galling because Greece has thrown hundreds of millions of dollars at the problem over the past two decades, but has little to show for it. At one point, in the early 1990s, Greece took more than $100 million from the European Union to build a registry. But after seeing what was accomplished, the European Union demanded its money back.

Since then, Greece has tried, and tried again. But still, less than 7 percent of the country has been properly mapped, officials say. Experts say that even the Balkan states, recovering from years of Communism and civil war, are far ahead of Greece when it comes to land registries attached to zoning maps — an approach developed by the Romans and in wide use in much of the developed world since the 1800s.

The article doesn't mention, and I would be curious to know what role private insurance plays in land transactions in Greece.  

Steve Clowney

(HT: David Schleicher)

Prebble on Anti-Sprawl Initiatives

Zoe Prebble (British Columbia) has posted Anti-Sprawl Initiatives: How Complete is the Convergence of Environmental, Desegregationist, and Fair Housing Interests? (Buffalo Public Interest Law Journal) on SSRN.  Here's the abstract:

Sprawl and segregation are inextricably linked. Sprawl has been occurring on a grand scale in the United States for sixty years; but in the past ten or so years; politicians, the media, and the public have begun to take it seriously as a problem that needs solving. The Environmental Movement has been a vocal advocate of anti-sprawl measures, and has contributed significantly to the growing momentum of the Anti-Sprawl Movement. There is clearly an environmental interest in combating sprawl. This article considers the degree to which that interest aligns with desegregationist and fair housing interests.

Steve Clowney

We Don't Have Enough Houses

Matt Yglesias continues to bang the drum about the damage of over restrictive land use policies in our nation's most desirable cities:

You know what sounds like could provide a huge lift to the American labor market? Suppose a bunch of rich foreigners decided they wanted to buy expensive items manufactured right here in the United States of America. Imagine they especially wanted to buy houses, lifting boats specifically in the construction sector that's been hammered by years of a weak housing market. Great news, right? Sadly not in today's United States where we manage to make lemons out of every cup of lemonade, and a surge in foreigners wanting to buy up New York City real estate is of course portrayed as bad news:

“There’s a great deal of interest in New York, which is seen as relatively cheap compared to other global cities,” said Yolande Barnes, director of research for Savills, an international real-estate firm.

The growth in high-end projects in Manhattan comes as housing for the working and middle class is in increasingly short supply in the city. These buildings are proving so profitable that they are warping the local real-estate market, making it more difficult to put up more-affordable housing.

By the same token, foreign interest in snapping up pieds a terres in New York City ought to be great news. It should create a lot of jobs for architects and construction workers. It should create upstream jobs for the people who cut the timber and make the metal that goes into buildings. It should create jobs in factories as people build the stoves and refrigerators to stock the new houses. And it should create downstream jobs as the construction workers and oven manufacturers take their paychecks to buy a new car or a night on the town. There should be a construction boom in New York and a construction boom in Silicon Valley and it should be providing lots of employment for working class men. But instead we're having housing shortages in New York and in Silicon Valley. Not because we don't have the technology to build lots more houses, but because we don't have the zoning codes.

Steve Clowney

Map of the Day: American Dialects

Rick Aschmann maps dialects as a hobby and has assembled this interactive map where you can click to hear audio and video samples of various North American accents. He still needs help completing the map, so if you're inclined, you can visit the map and see if your local region is included.

Steve Clowney

Camacho on Community Benefit Agreements

Alejandro Camacho (Irvine) has posted Community Benefits Agreements: A Symptom, Not the Antidote, of Bilateral Land Use Regulation (Brooklyn) on SSRN.  Here's the abstract:

Community Benefits Agreements (CBAs) — private agreements between land developers and community members exchanging benefits for support or tolerance of a project — have recently emerged as part of a larger movement in American land use regulation away from a unilateral, government-dominated model toward a more negotiated paradigm. Unfortunately, though they arose in part to address issues found in the predominantly bilateral negotiated model, CBAs have been accompanied by significant problems of their own. Most notably, concerns such as whether to engage in a CBA process, the appropriate framework for negotiation, and the relationship of CBAs to the public regulatory-approval process are typically left to the discretion of the developer. As a result, such agreements typically develop in parallel to the public process but largely independent of it — a redundancy that leads to additional costs for both developers and community members. More importantly, the negotiation process results in less-than-optimal agreements that disproportionately reflect the interests of the developer. These weaknesses, however, ultimately point to the continued inadequacy of the underlying public process in advancing legitimate land use decisions.

This symposium essay briefly outlines the modern public land use decision-making process’s transition from a unilateral model to a bilateral-negotiation model; discusses the rise of CBAs as a response to shortcomings of the bilateral process; analyzes CBAs’ benefits and drawbacks; and suggests how elements of the CBA process can be integrated into a more effective negotiating model. In particular, rather than encouraging the creation of CBAs, local governments should seek to integrate the most successful elements of the CBA process into the existing bilateral negotiation framework, creating a more multilateral, community-oriented decision-making process.

Steve Clowney

Abandoned Property: Star Wars Edition

Here’s an interesting set of pictures from photographer Rä di Martino of Star Wars sets that were abandoned in Morocco and Tunisia.  Through the decades there have been various efforts to save these landmarks, but for the most part they continue to decay.

Steve Clowney

Bright & Hopkins on Models of Affordable Home Ownership in England

Susan Bright (Oxford) and Nick Hopkins (Southampton) have posted Evaluating Legal Models of Affordable Home Ownership in England (Book Chapter) on SSRN.  Here's the abstract:

In this chapter we analyze the legal routes used to deliver Low Cost Home Ownership in England where there is some element of public subsidy involved. In order to evaluate the various products used for LCHO (right to buy, part-ownership, co-operative housing models), this chapter:

a) Explains the legal frameworks used to deliver the main LCHO products available in England;

b) Explores the potential benefits of home ownership to the individual in the form of wealth creation, "mainstreaming" and security of place;

c) Sets out key additional policy objectives of LCHO, in particular introducing and supporting tenure mix (sustainable communities) and sustaining the opportunity for continued use of the subsidy to provide access to LCHO for intermediate income households; and

d) Evaluates the extent to which the different products available deliver both the individual benefits of home ownership and support the wider policy objectives.

Steve Clowney

How We Think About Property - Changes Across Time

David Schorr, writing at the new blog Environment, Law, and History has some insightful things to say about how our conceptions of property and the environment have changed over time.  Schorr focuses on water law in the U.S. and in struggle between Israelis and Palestinians over natural resources.

Steve Clowney

The Best Venn Diagram in History?

This.  Always this.

Steve Clowney

Dellapenna on Groundwater

Joseph Dellapenna (Villanova) has posted A Primer on Groundwater Law (Idaho) on SSRN.  Here's the abstract:

The greater part of fresh water on the planet Earth is under ground and most of that qualifies as "groundwater" in the sense of water available to be pumped to the surface for human exploitation or consumption. This water is subject to a wide range of conditions of occurrence that reflect the great variations in porosity and permeability of the earth’s crust. Its rapidly growing importance as a source of water for agricultural, ecological, industrial, and municipal use around the world has resulted in the major actors in water politics and policy have debated the issues and problems involved in the development and use of groundwater.

The creation, by courts in the United States and England of the common law of ground-water in the nineteenth century was steeped in ignorance. This problem was perhaps best ex-pressed in the Ohio decision of Frazier v. Brown, in which the court stated that "the existence, origin, movement and course of such waters, and the causes which govern and direct their movements, are so secret, occult and concealed, that an attempt to administer any set of legal rules in respect to them would be involved in hopeless uncertainty, and would be, therefore, practically impossible" (emphasis added). To scientists, the relationship of groundwater to surface waters now is a well-known fact. Unfortunately for the future congruity of law and science, the courts in most jurisdictions had spoken of the early common law decisions as rules of property. Courts therefore were reluctant change the rules to bring them into conformity with later scientific knowledge. Yet the explosive growth of groundwater extraction made possible by the high-pressure centrifugal pump created crises in some areas where groundwater demand out-stripped groundwater supply. Eventually, most courts and legislatures became more willing to define the relations of parties concerning their interests in groundwater consistently with recognized scientific knowledge of hydrology and geology.

Because of the relatively recent emergence of groundwater as a field of scientific knowledge and of large-scale economic exploitation, as well as concern over the unsettling of property rights, the law relating to groundwater long remained relatively undeveloped and exhibited considerable confusion. As Mark Goodman, commenting on the state of groundwater law in Arizona in 1978, summed it up, "The history of [groundwater law] is as thrilling as ignorance, inertia, and timidity could have made it." Not the least of the continuing disconnects between water science and water law is the continuing application, in most states, of different bodies of law to surface waters and to groundwater even though they are all part of single hydrologic cycle. This approach carries over to groundwater itself where the rule persists that water flowing in an underground stream is subject to the law applicable to surface waters, while "percolating" groundwater (water seeping through interstices in the soil or rock) is subject to the law applicable to groundwater. This article discusses only the law applicable to groundwater as so narrowly conceived, and in particular to the law allocating groundwater so narrowly conceived to particular users and uses. Today there are five different theories for allocating percolating groundwater to particular users, theories that are reviewed in this article: 1) Absolute dominion (also called "absolute ownership" or "the rule of capture"); 2) Correlative rights; 3) The reasonable use rule; 4) Appropriative rights; and 5) Regulated riparianism.

Steve Clowney

Pennsylvania Landowners Can Get Cash on Spot for Mineral Rights

Fracking continues to kick-up property issues:

The practice has its roots in the early days of the drilling boom, when companies from around the world began leasing land as fast as they could -- locking the property into five-year deals that kept competitors at bay. Then, as drilling picked up, the increased supply of natural gas led to a record-setting drop in prices.

Suddenly, it wasn't as easy to turn a profit on a well. Many companies pulled out of neighborhoods where rigs had been planned, leaving those leases behind in the process. That left many landholders unsure when -- if ever -- they'd see a well on their property that would bring a steady stream of royalty checks with it.

The investment firms moving into the region are offering to buy those left-behind mineral rights. Landowners get money for that vacation home today, and the investment firm gets access to the royalty payments that may -- or may not -- come later.

If there's one word associated with the practice, it's risk -- risk for the company that might acquire useless mineral rights, and risk for the landowner who could miss out on lucrative royalty payments in the future.

Steve Clowney

The Art of Tall Buildings

French photographer Romain Jacquet-Lagrèze has been been fascinated with Hong Kong's tall buildings, with which the city has become synonymous. His images are published in his book, Vertical Horizons.

Steve Clowney

Zacks on the Mortgage Forgiveness Debt Relief Act of 2007

Dustin Zacks (King, Nieves & Zacks PLLC) has posted Avoiding Insult to Injury: Extending and Expanding Cancellation of Indebtedness Income Tax Exemptions for Homeowners (Arkansas Law Review) on SSRN.  Here's the abstract:

This article offers a critical analysis of anti-homeowner arguments that have arisen in the wake of the enactment of the Mortgage Forgiveness Debt Relief Act of 2007 (MFDRA), which excludes forgiven principal residence indebtedness from generating federal income tax liability. Some argue that forgiveness encourages housing speculation and overconsumption or benefits wealthy homeowners more than homeowners of moderate means, while others suggest that forgiveness is not fair to homeowners who paid such taxes prior to Congress’s exemption being enacted.

This article asserts that such criticisms, even if facially valid, are overstated and do not overcome the importance of eliminating existing homeowner incentives to file bankruptcies in order to avoid cancellation of indebtedness income tax. Furthermore, excluding cancellation of indebtedness income tax prevents disincentives to homeowners from seeking to modify their home loans. Aside from addressing scholarship regarding the temporary Congressional exclusion of principal residence indebtedness, this article also proposes an expansion of the permanent exclusions to cancellation of indebtedness taxation in the Internal Revenue Tax Code (the Code). In particular, the existing purchase-price exception to cancellation of indebtedness taxation should be expanded.

Because the purchase-price exception only applies to original lenders negotiating with original purchasers, the exemption has effectively been eliminated for a large portion of homeowners whose loans have been sold on the secondary market. This article argues that the theoretical justifications for the purchase-price exception should apply whether or not a home loan has been sold, as homeowners exercise no control over whether their loans are transferred from lender to lender. The Code already allows for subjective considerations of infirmity and impropriety at origination to equitably justify the purchase-price exception, and this article asserts that such considerations should be even more closely examined in light of the wildly inflated property values and subprime and exotic loans presented to homeowners at the height of the bubble. Therefore, even without a permanent extension of the MFDRA’s temporary exemption, expanding the purchase-price exemption would provide homeowners with incentives to renegotiate their home loans or to negotiate walkaways rather than filing for bankruptcy.

Steve Clowney

Poverty Moves to the Suburbs

Emily Badger reports:

[O]ver the last decade, suburbs have increasingly become home to America's poor. Between 2000 and 2011, the population living in American cities below the poverty line increased by 29 percent. During that same time, across the country in the suburbs of metropolitan areas as diverse as Atlanta and Detroit and Salt Lake City, the ranks of the poor grew by 64 percent. Today, more poor people live in the suburbs (16.4 million of them) than in U.S. cities (13.4 million), despite the perception that poverty remains a uniquely urban problem.

Steve Clowney

Map of the Day: Most Popular Baby Name by State

Steve Clowney

Arlen and Tontrup on the Endowment Effect

Jennifer Arlen (NYU) and  Stephan Tontrup (Max Planck Institute) have posted A Process Account of the Endowment Effect: Voluntary Debiasing Through Agents and Markets on SSRN.  Here's the abstract:

We contest the loss aversion theory of the endowment effect, in which the effect depends on the status of endowment alone. Instead, we propose that the nature of the trading process determines whether people resist or accept an exchange by affecting the responsibility people feel for their choice. The more they feel responsible for the decision, the more they expect experiencing regret over a negative outcome. Aversion to regret causes people to resist a rational trade and exhibit the endowment effect. In a series of experiments, we analyze two institutions that alter the trading process and reduce perceived responsibility --agency and markets. We find that both mute the endowment effect; moreover, participants intentionally use them to self-debias. Since many institutions shift responsibility, we conclude that the endowment effect is not present in many domains previously thought to implicate it. Institutional design often need not rely on paternalistic intervention.

Steve Clowney

Judge Orders Los Angeles BID to Dissolve

A reminder that not everyone loves Business Improvement Districts:

A Los Angeles Superior Court judge has ordered the Arts District Business Improvement District to dissolve, capping a long feud between the entity and a group of property owners. The BID has already halted its privately funded cleaning and safety program in the area.

The May 10 order from Judge Robert H. O’Brien is a victory for a group of Arts District property owners who argued in a lawsuit that the BID broke state law in its formation and therefore is invalid.

O’Brien’s order centered on his finding that the BID spent tax dollars on economic development services that did not provide a special benefit to area property owners.

“Our claim was basically that the constituency in this district is very diverse, and to claim you’re helping both industrial owners and loft owners and residents, there’s no coherent way to have an agenda to help everyone,” said developer Yuval Bar-Zemer, one of the property owners who brought the case against the city.

Steve Clowney

Foundling Tokens

Slate has a captivating  piece on "foundling tokens."

During the 18^th century, mothers who left their babies at London’s Foundling Hospital would deposit something small, but unique, with the hospital to serve as an identifier in the event parents returned to reclaim their children. These “tokens”—scraps of fabric, small metal objects, or bits of jewelry—were sealed in the child’s official record as proof of the parental connection, even as the babies themselves were renamed and vanished into the institution.

Some tokens seem to be repurposed sentimental objects from love affairs, like the ring with a heart inset, which has a poignant inscription on the interior of the band: “He who neglects me loses me.” [...] Some tokens were humble everyday objects, like the hazelnut and the fabric heart: exceedingly simple and slight, given the connection they were meant to signify.

The tradition of leaving tokens ended in the early 19^th century, when the hospital began to follow the much more efficient—albeit prosaic—procedure of issuing receipts to mothers who surrendered their children.

Steve Clowney