PropertyProf Blog

Home Prices in New Urbanist Neighborhoods

In a new paper, geographer Hongwei Dong takes a look at whether home prices in New Urbanist neighborhoods were more resilient after the crash.  Planetizen summarizes the findings:

Among the measures analyzed by Dong, mixed land uses did not impact values significantly, and density had a very minimal negative impact. Interestingly, school quality was also slightly negative, which might be explained by pre-bust bubble conditions in good districts. Homes in communities that were close to central Portland had the most price resilience. These were most often single-family homes located in walkable communities, with interconnected street networks, and sidewalks. Interestingly, being near downtown was important, but access to transit was mixed, and areas with only good bus service, without other New Urbanist amenities, showed less resilience.

However, the study suggests that synergistic effects exist between different dimensions of New Urbanist development. Neighborhoods that show not only smarter land use patterns and denser transit service but also good access to light rail transit and high-quality bike routes helped single-family homes sustain their values in the recession.

Stein on Land Rights in China

Gregory Stein (Tennessee) has posted What Will China Do When Land Use Rights Begin to Expire? The Evolution Toward Rule of Law in Real Estate on SSRN.  Here's the abstract:

China’s recent economic success is largely based on the vitality of its real estate market. But China does not permit fee simple ownership; rather, property developers build on land they have the right to use for seventy years or less. The government has not yet answered three critical questions it soon will face: Does the holder of a land use right have the right to renew it? If so, will the government charge for that renewal? And if so, how much?

In predicting how the Chinese government will act, it is instructive to observe past government behavior. First, the government tries mightily to avoid social unrest and upheaval. Second, the government refrains from being the first party to act, preferring to endorse successful private sector experiments. Third, individual government officials and the government itself are important participants in the real estate market. If we assume these features will remain true, it becomes possible to predict how China will respond as large numbers of land use rights begins to approach their expiration dates.

This Article discusses the renewability of the Chinese land use right; describes the government’s options when land use rights expire; examines how the government has behaved in the past in an effort to forecast how it will answer these renewability questions; and places the resolution of these important issues in the broader context of the uneven movement toward rule of law in China.

Alexander on Occupying the Constitutional Right to Housing

Lisa Alexander (Wisconsin) has posted Occupying the Constitutional Right to Housing on SSRN.  Here's the abstract:

The United States (U.S.) does not recognize a formal legal right to housing. Yet, the right to housing is alive in America. Using qualitative interviews and case studies, this article is the first to argue that recent American housing rights movements "such as: the Occupy Movements, the Take Back the Land movements, and the Home Defenders' League" give legal meaning to an American constitutional right to housing. These social movements represent the right to housing in American law when they occupy and retain vacant and real estate-owned homes; defend home owners and renters from illegal evictions and foreclosures; encourage municipalities to use eminent domain for principal reduction and property acquisition; and create micro-homes for the homeless. These movements' legal successes reformulate local property and land use laws, create legal arrangements that embody the human right to housing in American law, and associate the human right to housing with well-accepted American constitutional norms. In so doing, these movements occupy the legal meaning of an American constitutional right to housing, even in the absence of a formal legal right. This article contributes to popular constitutionalism scholarship by highlighting how private ordering and local law reforms can create constitutional meanings before those rights are associated with the actual text of the Constitution. It also enhances property scholarship by demonstrating how occupation can lead to more equitable property arrangements. This article also advances the law and social movement literature by outlining how the Internet and social media help social movements avoid some of the pitfalls of legal mobilization. Lastly, this article demonstrates new ways social movements can advance American social and economic rights in the technological Age.

Sao Paulo Starts to Run Out of Water

The third largest city in the world is starting to have water troubles.  From the Guardian:

In Brazil, a land of immense natural riches and home to around 12% of the world’s fresh water, the very idea of a water shortage is hard for people to conceive of. Yet despite the state government’s prevarication over possible imminent rationing – consisting of two days of water followed by four days without – in reality, millions are now getting just a few hours of water per day, with many struggling with none at all for days on end.

The São Paulo water crisis, or “hydric collapse” as many are calling it, has left this city of 20 million teetering on the brink. Though domestic use accounts for only a fraction of the water consumed in the state of São Paulo – where extensive agriculture and industry places intense pressure on available resources – for paulistanos, as the city’s residents are called, learning to use water wisely is suddenly the most pressing need of all.

French on Insuring Landslides

Christopher French (Penn State) has posted Insuring Landslides: America's Uninsured Natural Catastrophes (Iowa Law Review) on SSRN.  Here's the abstract:

Landslides occur in all 50 states and cause approximately $3.5 billion in property damage annually. Yet, in America, “all risk” homeowners and commercial property insurance policies exclude coverage for landslides, and there is only limited availability of expensive, stand-alone “named peril” insurance policies that cover landslide losses. Consequently, the affected homeowners are often left financially devastated -- homeless with a mortgage to pay on an unsaleable piece of property.

This Article analyzes the problem of insuring landslide losses in America and proposes ways to help solve it. It describes both historical and recent landslide events. It discusses the insurance industry’s response to the problem of insuring landslides, including the theoretical justifications insurers historically have used to successfully exclude coverage for landslides -- adverse selection, moral hazard and correlated risks. It also considers how other countries such as Belgium, France, New Zealand, Norway, Romania, Switzerland, Iceland and Australia address the issue of insuring landslide losses. It concludes by offering two ways to transform the insurance market for landslide losses in America.

Partition of Heirs Property Act Gains Momentum

Last week Arkansas became the fifth state to adopt the Uniform Partition of Heirs Property Act.

For those that aren't familiar with Heirs Property, the term typically refers to land passed down through generations without a will and owned by descendants as tenants in common. The trouble with these arrangements is that anyone who purchases even the smallest fractional interest from one owner can file a partition action with a court and force a sale of the property.  These sales often happen against the explicit wishes of many of the family members who have ownership shares in the property.  Family members may end up forced off land where they have lived for generations and, all too often, the mandated sales fail to secure fair market value for the property. 

To combat this problem the uniform act "provides a series of simple due process protections: notice, appraisal, right of first refusal, and if the other co-tenants choose not to exercise their right and a sale is required, a commercially reasonable sale supervised by the court to ensure all parties receive their fair share of the proceeds."

Connecticut, the District of Columbia, Hawaii and South Carolina are also considering the Act during 2015 legislative sessions.

A warm congratulations to property professor Thomas Mitchell of the University of Wisconsin Law School, who served as primary drafter of the act.  And also to the activists in Arkansas who set up a website, created a Facebook page, and helped push the act through the legislature.

Phelps on Preservation Law and Agricultural Places

Jess Phelps (USDA) has posted 'A Tinge of Melancholy Lay Upon the Countryside': Agricultural Historic Resources within Contemporary Agricultural and Historic Preservation Law (Virginia Environmental Law Journal) on SSRN.  Here's the abstract:

Preservation of working lands and resources has become the focus of many interested in the protection of rural areas. Despite public support for such initiatives and quantifiable successes, preservation advocates have struggled to utilize the current tools available to safeguard historic resources. To address this gap, this Article first considers the unique nature of agricultural historic resources and the challenges they present from a preservation perspective. It then assesses the current framework of historic preservation laws, developed largely for urban neighborhoods, and the issues preservationists face in applying these tools to the rural context. Last, this Article proposes a series of policy solutions that would provide meaningful assistance to rural preservationists in achieving their objectives. Ultimately, historic preservation has the potential to play a strong role in preserving the character of rural areas, but only if this profound policy disconnect can begin to be bridged.

Summerfield on the Future of Mass Graves

Jason Summerfield (Independent) has posted Comments on the Potter's Field: The Future of Mass Graves (Quinnipiac Probate Law Journal) on SSRN.  Here's the abstract:

The paper addresses burial policy with respect to city cemeteries and, in particular, New York City’s Hart Island, the so-called 'potter’s field,' which is currently operated under the Department of Corrections. The institution is the target of a significant amount of recent scrutiny, including litigation, New York City Council oversight committees, and public criticism. These converging debates culminated in an overhaul of DOC policies regarding access to Hart Island, formation of an online database of burial records in April, 2013 and proposed legislation that would transfer jurisdiction over the island to New York City's Parks and Recreation. The paper outlines the pressing need for an understanding of the city cemetery as a global institution, noting how burial processes can change over time. It looks at New York City's own mass grave in addition to other variations throughout the world and history. The essay reviews the city cemetery in the context of three ‘criticisms’ raised by Hon. Elizabeth S. Crowley’s ‘Briefing Paper’ on the subject and recently proposed legislation that affects the institution.

Book Announcement: Property Textbook by Barros & Hemmingway

From the publisher:

I am pleased to inform you that Property Law by Benjamin Barros and Anna Hemingway will be available for your fall 2015 class. This new casebook features an innovative approach that completely re-imagines the law school casebook format.  Covering all the major topics included in a basic 1L Property course, Property Law functions more like an undergraduate textbook than a traditional law school casebook, making use of sidebars, illustrations, and other design devices to present material more clearly. The authors present concepts simply, then move the discussion toward complexity. Clear yet sophisticated, the casebook is the perfect choice for all skill levels. Including problems that students can and should be able to do on their own, explanatory answers, and skills-based exercises, this casebook is both professor-friendly and student-friendly.  Themes that run through the course are highlighted throughout the book, resulting in a casebook that clearly presents the fundamentals of property law. This allows students to develop an understanding of basic concepts on their own while allowing professors to assist their students in developing an advanced understanding of property law.

Professors will benefit from:

1.    Clear, concise, and designed to be student-friendly, which also makes it professor-friendly. The book is designed so that a professor can teach cover-to-cover in four credits.  The Teacher’s manual provides ideas on how to do more or less with any topic.
2.    Clarity and bar passage are a major focus of this casebook.  The author team understands the importance of accessibility and ease-of-use.
3.    With a focus on preparation for taking the bar, Property Law includes subjects—including purchase money mortgages, the assumption-subject to distinction, and marshalling of assets—that many other property casebooks do not include.

Students will benefit from:

1. Clear exposition precedes cases, enhancing student understanding.
2. Problems with explanatory answers where appropriate.
3. Illustrations to aid in understanding in appropriate places throughout the book.

Lee on Land-Grabbing Research

Jootaek Lee (Northeastern) has posted Contemporary Land Grabbing, Research, and Bibliography (Law Library Journal) on SSRN.  Here's the abstract:

Researching contemporary land grabbing issues is complicated and more difficult than traditional land grabbing research which covered between the colonial period and the early twenty-first century. Contemporary land grabbing research is difficult for researchers because of the complex reasons and motivations behind the contemporary land grabbing, the number of stakeholders involved, the interdisciplinary nature of research, the many different types of legal sources to search — international treaties, custom, jurisprudence, soft law, and domestic statutes and customary law — lack of empirical evidence, and scattered resources in many different places. The research is a mixture of international and domestic legal research and legal and non-legal research. In this article, I will first investigate the contemporary land grabbing and land alienation and their definitions and identify the difficulties of research. Next, I will delineate various mechanisms and international principles which can be useful for the protection of the rights of indigenous and local people from the attack of State and non-State actors. Finally, I will selectively review several books and articles with annotations which I believe will provide great starting points for contemporary land grabbing research.

Is England Becoming a Nation of Renters?

The Guardian takes a look:

[I]n 1993, the majority of people aged 35 to 60 had a mortgage or owned outright. Mortgage lending had been freed up in the 1980s; council houses sold through right-to-buy and private landlords had not yet expanded much. The 1990s appeared to be the start of a home-owning democracy; what no one at the time realised was that it was, in fact, the peak of home ownership.

Ten years later, in 2003 – by the time the Queen’s eldest son, Prince Charles, was aged 55 – about 90% of people his age were living in a home they either owned outright or had a few years left of a mortgage on. Charles had been born slap bang in the middle of the home-owning generation that had been fortunate in many other ways, including having the NHS and the welfare state.

Ten years on again, in 2013, the picture is very different. Charles’s eldest son, William, turned 31 in the summer of 2013. Only 36% of his contemporaries had a mortgage by then, with 64% renting. William’s generation is “generation rent”, and there is little sign that this will not be the tenure of the majority of his cohort – for life. Home ownership remains common among older people, but that wealth cannot be passed on in full to younger generations. As people age, they will use up a great deal of their wealth in retirement.

Lewyn on Comprehensive Planning

Michael Lewyn (Touro) has posted The (Somewhat) False Hope of Comprehensive Planning on SSRN.  Here's the abstract:

Some commentators suggest that comprehensive planning is indispensable for smart growth (that is, less auto-centric development). This paper argues that municipal comprehensive plans, like zoning, are merely a tool that can be used to support sprawl as easily as smart growth. Thus, planning, although desirable for a variety of reasons, is not absolutely sufficient or necessary for smart growth.

Will Congress Take Action on Homeowner Tax Breaks

The L.A. Times reports that American homeowners have little to fear:

And there is already common ground to build on: bipartisan support, including at the White House, for a broad package of tax changes affecting businesses. Treasury Secretary Jacob J. Lew recently said the administration could support reforms that lower top tax rates for big corporations, eliminate unfair loopholes and simplify the entire system for businesses. Republicans generally are on board but insist that small businesses be part of the solution.

[...] What about comprehensive tax reforms for individuals of the type that inevitably would involve significant changes in current preferences for homeowners and tax increases for higher-income households? Highly unlikely. Congressional Republicans and the White House have such conflicting views of the tax system — Obama wants to raise taxes on the wealthy, Republicans vehemently oppose any net new taxes — that coming together on a major reform package covering individuals would be nothing short of miraculous.

Bottom line: Homeowner tax breaks are safe for the time being, probably until 2017 at the earliest.

Kent on Exactions after Koontz

Michael Kent (Campbell) has posted Land Use Exactions, Anti-Evasion, and Koontz v. St. Johns River Water Management District on SSRN.  Here's the abstract:

This article considers the U.S. Supreme Court’s 2013 decision in Koontz v. St. Johns River Water Management District, which extended the application of the Court’s exactions test (known as Nollan/Dollan). The majority of the Court relied heavily on the unconstitutional conditions doctrine, explaining that this doctrine formed the basis not only for the Nollan/Dolan framework but also for the extension of that framework to Koontz’s new factual setting. Led by Justice Kagan, four members of the Court dissented. Although the dissenting Justices seemingly agreed with several of the majority’s propositions, they vigorously opposed the manner in which the majority applied those propositions.

Although Koontz might be viewed as just another in a long line of cases that make up the messy jurisprudence of regulatory takings and unconstitutional conditions, the primary thesis of my article is that Koontz in fact provides a key to unlocking the Court’s exactions framework. Relying on my prior work with Brannon Denning, this article posits that both regulatory takings and the doctrine of unconstitutional conditions constitute anti-evasion doctrines by which the Court seeks to fill enforcement gaps left open by its prior constitutional decision rules. Inasmuch as land use exactions lie at the intersection of these two doctrinal areas, one would expect to find that anti-evasion notions play a large role in the Court’s exactions decisions. And indeed, both the majority and the dissent in Koontz invoked the anti-evasion characteristics of the Nollan/Dolan test in support of their analytical positions in that case.

Viewing Koontz (and its jurisprudential antecedents) through the prism of anti-evasion helps both to explain the majority’s decision in that case and to bring the differences between the majority and dissent into sharper focus. Additionally, the anti-evasion concept suggests some guidelines for how future exactions issues might be resolved — both at the micro level (dealing with future decision rules that will have to be developed in light of Koontz) and at the macro level (addressing larger questions about the Court’s takings jurisprudence and the place of the exaction cases within it).

Map of the Day: All the Single Ladies

The Atlantic Cities Blog has am updated series of maps looking at the ratio of single men to single women across the country and  in different age brackets.

Fennell on Resource Segmentation

Lee Fennell (Chicago) has posted Slicing Spontaneity (Iowa Law Review) on SSRN.  Here's the abstract:

In this symposium essay, I consider the role of resource segmentation — the natural or artificial division of resources into appropriable or contributable units — in eliciting and maintaining coordination in the absence of formal private property rights or top-down coercion. I argue that the appropriate segmentation of resources can reduce informal governance burdens and, by constructing choice sets, promote convergence between privately optimal and socially optimal choices. The effects on governance follow from the fact that segmentation, whether given by nature (fish, trees, pieces of fruit) or artificially constructed (boatloads, bushels, pie slices) provides a measuring rod for assessing draws on, or contributions to, common pools. In addition, when contributions to or withdrawals from a common pool take a chunky, discontinuous form, the private and social optimum may more readily converge on a single choice, despite the presence of externalities. This lumpiness in choices influences when externalities will be relevant to efficiency and can amplify the significance of policies and norms that edge decisions in socially desirable directions. Resource segmentation should, therefore, receive independent attention as a design element important to sustaining spontaneous order.

Mian & Sufi on Fraudulent Income Overstatement on Mortgage Applications

Atif Mian (Princeton - Public Policy) & Amir Sufi (Chicago - Business) have posted Fraudulent Income Overstatement on Mortgage Applications During the Credit Expansion of 2002 to 2005 on SSRN.  Here's the abstract:

Academic research, government inquiries, and press accounts show extensive mortgage fraud during the housing boom of the mid-2000s. We explore a particular type of mortgage fraud: the overstatement of income on mortgage applications. We define “income overstatement” in a zip code as the growth in income reported on home-purchase mortgage applications minus the average IRS-reported income growth from 2002 to 2005. Income overstatement is highest in low credit score, low income zip codes that Mian and Sufi (2009) show experience the strongest mortgage credit growth from 2002 to 2005. These same zip codes with high income overstatement are plagued with mortgage fraud according to independent measures. Income overstatement in a zip code is associated with poor performance during the mortgage credit boom, and terrible economic and financial economic outcomes after the boom including high default rates, negative income growth, and increased poverty and unemployment. From 1991 to 2007, the zip code-level correlation between IRS-reported income growth and growth in income reported on mortgage applications is always positive with one exception: the correlation goes to zero in the non-GSE market during the 2002 to 2005 period. Income reported on mortgage applications should not be used as true income in low credit score zip codes from 2002 to 2005.

A Colossus of Africa

Slate takes a look at the history and meaning of the largest apartment building in Africa:

The building, along with the neighborhood of high-rises around it, had long functioned as something of a vertical waiting room for admission into urban South Africa. Adjoining the city’s largest train and bus station, it was the landing point from which thousands of immigrants, refugees, and rural migrants took their first tentative steps into Africa’s wealthiest city, and their presence made the area dizzyingly cosmopolitan. Congolese nightclubs jostled up against bootleg Nollywood film stores and Ethiopian restaurants; the knots of gossiping women gathered on street corners chattered in Zulu, Yoruba, French, and Somali.

And for a journalist like me, Ponte seemed almost too good to be true: a building that doubled as a neat metaphor for contemporary South Africa—a carefully wrought fortress of white privilege that had fallen into disrepair and violence before emerging, haltingly, into a more inclusive but far more uncertain version of itself.

 

Mank on Standing to View Other People's Land

Bradford Mank (Cincinnati) has posted Standing to View Other People's Land: The D.C. Circuit's Divided Decision in Sierra Club v. Jewell (Columbia Journal of Environmental Law) on SSRN.  Here's the abstract:

In its divided 2014 decision in Sierra Club v. Jewell, the D.C. Circuit held that plaintiffs who observe landscape have Article III standing to sue in federal court to protect those views even if they have no legal right to physically enter the private property that they view. The D.C. Circuit’s decision could significantly enlarge the standing of plaintiffs to sue federal agencies or private parties over changes to private lands that the plaintiffs have no right to enter. Because the Supreme Court has inconsistently applied both strict and liberal approaches to standing, it is difficult to predict how it would decide this issue. Environmentalists and nature observers would generally favor broad standing rights, but property rights advocates would argue that only those with a legal right to enter a property should have the right to sue to protect it. If it addresses whether plaintiffs must have a legal interest in any property they seek standing to protect, the Supreme Court might be forced to resolve the contradictions in its standing doctrine.

Campbell on Nonjudicial Foreclosure

John Campbell (Denver) has posted Getting Wrongful Foreclosure Right: Two Stage, Progressive Filtering in Nonjudicial Foreclosure States on SSRN.  Here's the abstract:

In some states, foreclosures occur with no judicial involvement. Typically, after this "nonjudicial foreclosure," the new buyer of the home will file an unlawful detainer in court to remove the former homeowner. But, what if, in that action, the homeowner (now defendant) produces evidence the foreclosure was illegal - even void? Can the homeowner avoid eviction? The answer to this question depends on what state a homeowner is in. In 8 states, even if a homeowner proves that the foreclosure was void and the new buyer could not have taken title, the homeowner will still be evicted from the home. This is because in those states, the court is prohibited from considering any evidence relating to who has legal title to the property. As a result, homeowners can be removed from a home before any court determines - despite having the chance to do so - who has a superior claim to possession.

This article highlights this split between states that consider evidence in unlawful detainers (challenge states) and those who do not (no-challenge states). I argue that no-challenge states unnecessarily cause, augment, and concretize the harm of wrongful foreclosures. I assert that these harms run to homeowners, the legitimacy of courts, and society as a whole. Ultimately, I assert that challenge states have found a more prudent path that obtains the expediency of nonjudicial foreclosure while still allowing for just results.