PropertyProf Blog

Mandelker and Alexander on Land Use and Discrimination

Daniel R. Mandelker (Washington University) and Trevor Alexander (WashU Student) have posted Minority Discrimination Through Popular Vote in the Land Use Process (Zoning and Planning Law Report) on SSRN. Here's the abstract:

Voter participation in the land use process can discriminate against minorities. Assume a city council approves an amendment to the zoning ordinance that authorizes an affordable housing project. The amendment attracts opposition because the project will be open to minorities. Voters who oppose the project place a referendum on the ballot, an election is held, and the amendment is rejected by popular vote. Similar problems arise when voters adopt a constitutional or city charter amendment that bars effective action to prevent minority discrimination. Assume a city adopts an inclusionary housing program that requires developers to provide affordable housing and prohibits minority discrimination. Voters place an initiative on the ballot that would amend the city charter to prohibit inclusionary housing programs, an election is held, and they adopt the charter amendment.

Initiatives and referenda like these are facially neutral but raise minority discrimination problems, which the Supreme Court considered in a series of cases. Its decisions are mixed, and it rejected initiatives that had racially discriminatory impacts in some cases. The constitutional basis for these cases was not always clear, and some preceded the critical holding in Washington v. Davis that proof of racial discrimination under the Fourteenth Amendment requires proof of discriminatory intent. The Court changed direction in a recent case, where a plurality upheld an initiative that prohibited affirmative action in higher education.

Commentary suggests that cases holding initiatives unconstitutional applied a political process doctrine based on a famous footnote in U.S. v. Carolene Products Co. In that footnote, Justice Stone asked “whether prejudice against discrete and insular minorities may be a special condition, which tends seriously to curtail the operation of those political processes ordinarily to be relied upon to protect minorities, and which may call for a correspondingly more searching judicial inquiry.” The footnote’s application to the land use process is clear. In the examples at the beginning of this article, a referendum or an initiative rejected a decision made by legislative representatives, and curtailed a political process used to protect minorities. Rezoning for housing available to minority groups was displaced by popular referendum, and an initiative rejected a legislative program that benefited minorities.

The political process doctrine has two prongs. The first prong requires that an issue that raises a political process problem must be minority sensitive “in that it singles out for special treatment issues that are particularly associated with minority interests.” The second prong requires a showing that voters removed a decision associated with minority interests to a higher level of government, where it was insulated from change except through change at the higher level. A mere repeal of protective legislative action does not satisfy this prong. There must be repeal plus a modification of the normal political process for making political decisions. An initiative can accomplish this change.

Supreme Court cases that rejected initiatives because they were racially discriminatory did not explicitly embrace or explain a political process theory, but acceptance of this theory is implicit. A recent plurality decision by the Supreme Court, Schuette v. Coalition to Defend Affirmative Action, Integration and Immigrant Rights and Fight for Equality By Any Means Necessary, damaged these early decisions, damaged judicial protection against racial discrimination by popular vote, and rejected the political process theory. We begin with Supreme Court cases, discussed in Schuette, that invalidated racially discriminatory initiatives. We then discuss Schuette, and what it means for the future of racial plebiscites as they affect the land use process. We then discuss two Supreme Court cases not discussed in Schuette where the Court upheld racially discriminatory initiatives, and what these cases mean for the Schuette decision.

NEW BOOK: Dagan on Justifying Property and Its Values

Hanoch Dagan (Tel-Aviv) has posted chapters 1 and 9 of A Liberal Theory of Property (Cambridge University Press) on SSRN. The title is coming out next month, December 2020. Here's an overview of chapters 1 and 9:

Property enhances autonomy for most people, but not for all. Because it both empowers and disables, property requires constant vigilance. “A Liberal Theory of Property” addresses key questions: how can property be justified? What core values should property law advance, and how do those values interrelate? How is a liberal state obligated to act when shaping property law?

In a liberal polity the primary commitment to individual autonomy dominates the justification of property, founding it on three pillars: carefully delineated private authority, structural (but not value) pluralism, and relational justice. A genuinely liberal property law meets the legitimacy challenge confronting property by expanding people’s opportunities for individual and collective self-determination while carefully restricting their options of interpersonal domination.

“A Liberal Theory of Property” shows how the three pillars of liberal property account for core features of existing property systems, provide a normative vocabulary for evaluating central doctrines, and offer directions for urgent reforms.

Stein on Autonomous Vehicles and Land Use

Gregory Stein (Tennessee) has posted The Impact of Autonomous Vehicles on Urban Land Use Patterns (Florida State University Law Review) on SSRN. Here's the abstract:

Autonomous vehicles are coming. The only questions are how quickly they will arrive, how we will manage the years when they share the road with conventional vehicles, and how the legal system will address the issues they raise. This Article examines the impact the autonomous vehicle revolution will have on urban land use patterns.

Autonomous vehicles will transform the use of land and the law governing that valuable land. Automobiles will drop passengers off and then drive themselves to remote parking areas, reducing the need for downtown parking. These vehicles will create the need for substantial changes in roadway design. Driverless cars are more likely to be shared, and fleets may supplant individual ownership. At the same time, people may be willing to endure longer commutes, working while their car transports them.

These dramatic changes will require corresponding adaptations in real estate and land use law. Zoning laws, building codes, and homeowners’ association rules will have to be updated to reflect shifting needs for parking. Longer commutes may create a need for stricter environmental controls. Moreover, jurisdictions will have to address these changes while operating under considerable uncertainty, as we all wait to see which technologies catch on, which fall by the wayside, and how quickly this revolution arrives. This Article examines the legal changes that are likely to be needed in the near future. It concludes by recommending that government bodies engage in scenario planning so they can act under conditions of ambiguity while reducing the risk of poor decisions.

Barnes on Moving Toward Integration

Kristen Barnes (Syracuse) has posted The Pieces of Housing Integration (Case Western Law Review) to SSRN. Here's the abstract:

Notwithstanding the enactment of the Fair Housing Act in 1968, accomplishing racially- integrated housing across the United States remains an unattained goal. The costs associated with this failure are innumerable. Black Americans have endured harms in many areas, including health, education, wealth, and employment. More broadly, the nation has incurred considerable socio-economic and political costs. In the interdisciplinary book, Moving Toward Integration, authors Richard Sander, Yana Kucheva, and Jonathan Zasloff analyze why the promise of racially-integrated housing remains unfulfilled and identify noteworthy strategies for changing course. Engaging with their arguments, this article highlights several structural impediments to altering racial housing patterns. Banks, cities, government agencies, and courts have been major contributors to the problem. Nonetheless, they have the power to ameliorate some of the lingering damage and to prevent future harms. Referencing several examples involving the Fair Housing Act, disparate impact theory, and the Low Income Housing Tax Credit, this work elucidates how lending and government entities have sometimes operated to compromise desegregation and integration efforts rather than to facilitate them. Understanding the counterproductive moves of these influential actors is essential to assessing proposals for change.

Mitchell on Heirs' Property Reform and the Farm Bill

Thomas W. Mitchell (Texas A&M) has posted Historic Partition Law Reform: A Game Changer for Heirs' Property Owners (forthcoming in Heirs' Property and Land Fractionation: Fostering Stable Ownership to Prevent Land Loss and Abandonment. United States Department of Agriculture, E-Gen. Tech. Rep.) on SSRN. Here's the abstract:

Over the course of several decades, many disadvantaged families who owned property under the tenancy-in-common form of ownership – property these families often referred to as heirs’ property – have had their property forcibly sold as a result of court-ordered partition sales. For several decades, repeated efforts to reform state partition laws produced little to no reform despite clear evidence that these laws unjustly harmed many families. This paper addresses the remarkable success of a model state statute named the Uniform Partition of Heirs Property Act (UPHPA), which has been enacted into law in several states since 2011, including in 5 southern states. The UPHPA makes major changes to partition laws that had undergone little change since the 1800s and provides heirs’ property owners with significantly enhanced property rights. As a result, many more heirs’ property owners should be able to maintain ownership of their property or at least the wealth associated with it.

This article describes how the UPHPA has gotten significant purchase among lawmakers at the state and federal level and among other very important stakeholders. At this time, 14 states located throughout every region of the U.S. as well as the U.S. Virgin Islands have enacted the UPHPA into law, making the UPHPA the 6th most successful of the 38 uniform real property acts the Uniform Law Commission has promulgated in its 127-year history. Further, the District of Columbia and New York currently are considering UPHPA bills that have been introduced in their respective legislatures. Over the course of the next several years, it is likely that several more states or other jurisdictions will enact the UPHPA into law. Further, the UPHPA has helped raise awareness of the many problems heirs' property owners face and important stakeholders have taken some very important actions to address some of these concerns. These stakeholders include the USDA's U.S. Forest Service, the USDA's National Resources Conservation Service, and the Federal Reserve Bank of Atlanta. Further, this article describes how the federal Farm Bill that Congress passed in 2018 and that was then signed into law explicitly references the UPHPA in a few places and provides incentives for additional states to enact it into law so that farmers and ranchers in those states will be eligible for certain USDA benefits that are only made available to farmers and ranchers who are located in states that have enacted the UPHPA into law.

Casado-Perez on Legal Constraints in Public Property Management

Vanessa Casado-Perez (Texas A&M) has published A Street View of Property (Hastings Law Journal) on SSRN. Here's the abstract:

Parking on public streets is scarce. The current allocation system for parking spots based on rule of capture coupled with low parking fees creates a tragedy of the commons scenario. The misallocation of parking has consequences for commerce, for access to public spaces, and for pollution and congestion. Municipalities have not widely adopted the solution that economists propose to solve this scarcity problem: increase the price. Politics aside, the reluctance of municipalities to do so may be explained by the unique nature of public property as reflected in well-rooted legal and societal constraints. This unique nature helps explain, for example, municipalities’ ban of software applications (apps) allowing occupants of curbside parking to “sell” their spots to would-be occupants in Boston or San Francisco. While the ban may be justified, the unique nature of public property is not incompatible with some well-designed, efficiency-oriented policies, as this paper will put forward. This article distills the legal constraints on curbside parking and any other public property management by drawing on case law regarding parking meters, case law on public resources managed in trust for the public, and decisions by municipalities regarding parking apps and privatization of parking meters. These constraints include, among others, that public property shall not be used to raise revenue, although placing a price on it may pursue other regulatory aims consistent with public use, or that municipalities shall not lose control of the public spaces dedicated to curbside parking. At a normative level, the above constraints provide a framework for assessing policies regarding curbside parking and, by extension the management of any other public property resources. At a positive level, the article proposes ways to make efficiency compatible with the principles guiding the management of public property. It analyzes to what extent the efficiency oriented policies that would translate into a price increase—variable pricing, tradable property rights, and privatization—clash with those principles constraining the monetization of public property. In addition, the article concludes by pointing to other situations where its analytical framework could be extended, such as other uses of public streets (for instance, use of public bus stops by shuttle-buses of private companies) or existing practices in connection to public resources of a similar nature (for instance, semi-privatization of beaches by surfers).

Alexander on Human Flourishing and the Right to Destroy

Gregory Alexander (Cornell) has posted Of Buildings, Statues, Art, and Sperm: The Right to Destroy and the Duty to Preserve (Cornell Journal of Law & Public Policy) on SSRN. Here's the abstract:

Markets require some sort of property rights, including transferability. Without transferable property rights market relations cannot get off the ground. Moreover, markets assume that these rights refer to some resource, some thing that is the object of the market relationship. In this sense property is, as some commentators recently have argued, about things. Saying that property is about things doesn’t tell us very much, though. It tells us nothing about the sorts of things that are the object of property rights, and it gives no indication whether property rights are uniform and fixed regardless of the sort of thing involved. Things are not all of a piece; pencils are not Picassos. There is no good reason to think that the law of property should treat all things alike. Modularity can take us only so far. Property law does and should make distinctions regarding the rights that owners have or don’t have and the extent of those rights depending upon the sorts of things they own. This Article investigates distinctions that property law does draw or should draw with respect to the right to destroy. That right has important implications for the market because the consequence of full exercise of the right, i.e., destruction of the thing, is complete and irrevocable removal of an asset from future market transactions. Where the asset involved is of a fungible sort, a pencil, for example, there is little cause for concern about this loss. The losses about which we worry, however, are those involving non-fungible items, pearls of great price. Such losses include historic buildings and important works of art. Disputes involving the right to destroy have ranged farther, though. Among the most contentious and sensitive of these are disputes over the disposition of human reproductive material. These controversies too have implications for the market, as human sperm and eggs may be sold and bought under certain conditions. Despite its importance, the right to destroy is one of the least discussed twigs in the proverbial bundle of rights constituting ownership. A recent article by Lior Strahilevitz analyzes the right in detail. Other than his article, only an earlier article by Edward McCaffery, and 1999 book by the late Joseph Sax, Playing Darts with a Rembrandt, have discussed the right to destroy within the past several decades. McCaffery’s essay takes the position that most courts have adopted, rejecting the claim that owners have the right to destroy that which they own. McCaffery regards such a right as “an embarrassment in Anglo-American law.” This appears to be the conventional wisdom, with the recent edition of Black’s Law Dictionary excluding the right to destroy from the incidents of ownership included in its definition of ownership. More recently, however, Lior Strahilevitz has provided a powerful defense of the right to destroy. Strahilevitz bases his argument substantially on expressive values implicated in an owner’s preference to destroy an object that he owns. Sax’s book opposes a right to destroy with respect to works that have cultural significance. This Article analyzes the right to destroy from the perspective of the human flourishing theory that I have been developing over the past several years. I will discuss four controversies in which the related questions whether owners have a right to destroy what they own and whether they have obligations to preserve their property. The settings that I will examine, albeit briefly, are historic preservation, artists’ destruction of their own work, removal of public statues, and destruction of frozen sperm. My aim is to show how the human flourishing theory provides an illuminating framework for analyzing what is at stake in disputes over an owner’s asserted right to destroy something that he owns. Hopefully, this framework will provide a more satisfying, analytically and morally, means of resolving such disputes. To set the stage for these case studies, I begin with a brief summary of Lior Strahilevitz’s argument in support of the right to destroy.

Kochan on Pride and Property

Donald Kochan (Chapman) has posted Pride & Property: An Interdisciplinary Analysis of Their Symbiotic Relationship (USC Interdisciplinary Law Journal) on SSRN. Here's the abstract:

Pride and property are mutually reinforcing, symbiotic forces through which individuals express their identity in a biologically, economically, and psychologically driven manner that generates evolutionary advantages. This Article is the first to examine the correlative components of pride and property ownership, along with the legal implications that follow from their symbiotic relationship. It is an interdisciplinary treatment of pride and property—engaging law, economics, psychology, evolutionary biology, evolutionary psychology, and philosophy. The grossly under-studied “authentic,” achievement-oriented, and motivational variety of pride (as contrasted with the much-vilified “hubristic” kind) is recently heralded as perhaps the most important human emotion for evolutionary purposes. The Article explains that authentic pride is adaptive, functional, and manifests itself in evolutionarily beneficial ways—including through its interaction with property. The Article also outlines the mechanics of a pride based-utility function.

Property has acquisitional and expressive functions, allowing ownership to be both the repository of pride-based utility and also useful as a vehicle through which evolutionarily-beneficial authentic pride can be expressed. Property can act as a “pride display” that signals status-deservedness to the greater community, enhancing the prospects of group acceptance critical to evolutionary fitness. Although literature has discussed property as integrated with one’s self-identity and personhood, and while recent research on pride has recognized its fundamental relationship to the self, very little analysis ties those strands together to analyze pride in propertyas identity development and to evaluate the motivational role pride plays in the acquisition, maintenance, and improvement of property. This Article seeks to fill that void. It explores ways we might maximize the influence of the utility-enhancing aspects of the pride emotion and examines how we can find new appreciation for the role that identity and our emotions play in how we experience, manage, govern, and protect property.

Yuille on Dignity Takings, Nuisance Actions, and the National Gang Strategy

Lua K. Yuille (Kansas) has posted Dignity Takings in Gangland's Suburban Frontier (Chicago-Kent Law Review) on SSRN. Here's the abstract:

 

This paper engages the evolving dignity takings framework, first developed by Bernadette Atuahene, in the context of contemporary American street gangs (e.g. Crips, Bloods, Latin Kings, etc.). Contrary to most popular accounts, it starts with a re-imagined and complicated notion of street gangs that emphasizes not their secondary or tertiary violence and criminality but their primary function as corporate institutions engaged in the sustained, transgressive creation of alternative markets for the creation of the types of property interests that scholars have associated with the development and pursuit of identity and “person-hood.” From this perspective, the paper applies the dignity takings analysis to public nuisance abatement actions (commonly known as gang injunctions), which have become standard tools in the national gang strategy. These civil mechanisms enjoin the conduct and activities of the gangs, as unincorporated entities, and prohibit named individuals (including but not limited to known and suspected gang members) from engaging in a panoply of otherwise legal activities: displaying gang symbols, wearing clothing or colors associated with a gang, possessing tools or objects capable of defacing real or personal property (e.g. pens), appearing in public view with a known gang member. Through qualitative analyses of interviews, court documents, and political hearings, the paper identifies a special form of dehumanization and infantilization that it refers to as "adultization," which demonstrates that the dispossession of identity property associated with suburban gang injunctions depresses self-esteem, erodes self-confidence, damages identity and feelings of community worth, and dehumanizes enjoined individuals in a way that deprives them of their fundamental right of dignity, constituting a clear example of a dignity taking.

Owley and Phelps on Preservation Law and Civil War Monuments

Jessica Owley (Buffalo) and Jess R. Phelps (Dinse, Knapp, & McAndrew) have posted Understanding the Complicated Landscape of Civil War Monuments (Indiana Law Journal Supp.) on SSRN. Here's the abstract:

 

This essay examines the controversy regarding confederate monuments and attempts to contextualize this debate within the current preservation framework. While much attention has been paid to this topic over the past year, particularly with regard to “public” monuments, such discussion has generally failed to recognize the varied and complicated property law layers involved—which can fundamentally change the legal requirements for modification or removal. We propose a spectrum or framework for assessing these resources ranging from public to private, and we explore the messy space in-between these poles where most monuments actually fall. By highlighting these categories, we provide an initial introduction of a typology for evaluating confederate monuments, serving as a foundation for an exploration into the nature of property law and monument protection.

Singer on Property Law and Religion in Public Accomodations

Joe Singer (Harvard) has posted Property and Sovereignty Imbricated: Why Religion Is Not an Excuse to Discriminate in Public Accommodations (Theoretical Inquiries in Law) on SSRN. Here's the abstract:

May a hotel owner that objects to same-sex marriage on religious grounds refuse to host a same-sex wedding in its ballroom or deny the couple the right to book the honeymoon suite? Do public accommodation laws oppress religious dissidents by forcing them to act contrary to their religious beliefs or does discriminatory exclusion threaten equal access to the market economy and deny equal citizenship to LGBTQ persons? Answering these questions requires explaining why one property claim should prevail over another and why one liberty should prevail when it clashes with another. And answering those questions requires analysis of the relationship between property and sovereignty.

Sovereign power both creates and regulates the types of property rights that can be tolerated in a free and democratic society that values each person equally. Should we view sovereignty as a threat to property or property as a threat to sovereignty? Libertarians choose the first and liberals the second. But this is the wrong way to understand the relation between property and sovereignty. Property and sovereignty are not separate and independent concepts or spheres of social life that can be brought into relationship with each other. Rather, they are imbricated; they overlap like roof tiles. Our aspiration to live in a free and democratic society places certain constraints on both property and sovereignty. Such societies do not recognize absolute power, whether public or private. Free and democratic societies are committed to a substantive vision of both social relations and politics. We have fruitful debates about property and sovereignty and, in the end, must construct a legal system that effects an acceptable compromise between access and exclusion in the property regime.

Our historic practices regarding racial and other forms of discrimination and our evolving norms suggest that public accommodation laws enable access to the marketplace without regard to invidious discrimination. Religious freedom cannot operate to deny equal citizenship or opportunity. For that reason, a same-sex couple should not have to call ahead to see if they are welcome to book the honeymoon suite. Public accommodation laws do not infringe on legitimate property rights or religious freedoms; rather, they define the legitimate contours of liberty and property in a society that treats each person with equal concern and respect.

Arnold on Coastal Industrial Disasters, Insurance, and Climate Change

Zach Arnold (DC lawyer) has posted Preventing Industrial Disasters in a Time of Climate Change: A Call for Financial Assurance Mandates (Harvard Environmental Law Review) on SSRN. Here's the abstract:

In the current era of accelerating climate change, rising sea levels, and increasingly extreme weather, coastal industrial disasters pose a large and growing risk to society. The private sector and public officials are both failing to adequately respond to this risk, and the familiar regulatory tools in this context, such as design mandates and adaptation subsidies, have significant drawbacks. This paper proposes a novel policy framework to prevent coastal industrial disasters. I argue that financial assurance requirements (FAMs), such as insurance mandates, can induce coastal industry to adapt to the coastal impacts of climate change and can ensure that the public will be fully compensated for any disasters that nonetheless occur. FAMs can mobilize the considerable expertise of third-party financial assurance providers and provide efficient incentives for private adaptation. Moreover, they are relatively simple to implement, making them especially suitable for state, regional, and municipal policymakers facing locally concentrated climate impacts, tight resources, and federal gridlock. FAMs are a promising remedy for a significant and increasingly urgent danger.

Iglesias on Integration Policies in Housing (Book Chapter)

Tim Iglesias (San Francisco) recently posted a chapter titled Two Competing Concepts of Residential Integration on SSRN from the forthcoming book Social Equity in a Time of Change: A Critical 21st Century Social Movement (ed. Richard Greggory Johnson III). Here's the abstract:

 

This book chapter identifies two popular--but competing--concepts of residential integration, demonstrates their distinct practical consequences, and calls for a frank conversation among social equity activists regarding which concept do we want to pursue. One concept, dubbed the “traditional integration model,” concerns the nature or quality of a community. It focuses on the complexion of a community as a geographical unit and the social relationships among members of different income groups or racial groups within it. This concept asks: Who lives there and how do they relate to each other? The second concept, “the individual access to the opportunity structure model,” focuses on how the physical location of a household relates to the opportunity structure of a community (e.g. good schools, good jobs, decent shopping, healthy neighborhoods). The primary focus of this model is maximizing the access of new residents to opportunities so that they can improve their lives. It does not inquire into the relationships among the members of the households who live in a community, but rather on the economic and social success of the individuals and families.

 

Somin on Comparative Eminent Domain

Fresh from Cambridge University Press, property law scholar and friend of the blog Ilya Somin (George Mason) recently published a co-edited book titled Eminent Domain: A Comparative Perspective. The work analyzes the use and abuse of eminent domain in a number of jurisdictions, including Germany, Taiwan, the US, South Korea, and a variety of developing nations. The book came about as a result of a conference hosted by the Korea Development Institute (one of South Korea's leading research centers), as the use of eminent domain in South Korea has attracted a great deal of attention from law and policy makers across the globe.  

Here is a summary of the book:

 

The taking of private property for development projects has caused controversy in many nations, where it has often been used to benefit powerful interests at the expense of the general public. This edited collection is the first to use a common framework to analyze the law and economics of eminent domain around the world. The authors show that seemingly disparate nations face a common set of problems in seeking to regulate the condemnation of private property by the state. They include the tendency to forcibly displace the poor and politically weak for the benefit of those with greater influence, disputes over compensation, and resort to condemnation in cases where it destroys more economic value than it creates. With contributions from leading scholars in the fields of property law and economics, the book offers a comparative perspective and considers a wide range of possible solutions to these problems.

 

This project has garnered some impressive pre-publication endorsements, including by noted scholars such as Richard Epstein (NYU) and Roderick Hills (NYU), as well as Justice Soon-il Kwon of the Supreme Court of Korea.

 

Great work, Ilya! An excellent edition to the literature.

Singer on Property Rights and Native Peoples

Joe Singer (Harvard) has posted Indian Title: Unraveling the Racial Context of Property Rights, or How to Stop Engaging in Conquest (Albany Government Law Review). Here's the abstract:

This article discusses the racial injustice faced by Native Americans, with whom land titles in the United States originated with. The author argues it is vital to interpret the Supreme Court cases of the 19th century that correctly defined Indian title, and to honor the property rights of Indian title just as we do the "fee simple of the whites."

D'Onfo on Property Rights and Secured Credit

Danielle D'Onfro (Washington University) has posted Limited Liability Property (Cardozo Law Review) on SSRN. Here's the abstract:

This Article offers a new theory of secured debt that aims to answer fundamental questions that have long puzzled bankruptcy scholars. Are security interests property rights, contract rights, or something else? Why do secured debt holders enjoy a priority right that, in bankruptcy, requires them to be paid in full before other debt holders recover anything? Should we care that secured credit creates distributional unfairness when companies cannot pay their debts? Because scholars have yet to provide a satisfactory account of security interests, these questions remain unanswered.

The Article argues that security interests are best understood as a form of “limited liability property.” Limited liability — the privilege of being legally shielded from liability that would normally apply — has long been considered the quintessential feature of equity interests. But limited liability is in fact a critical feature of security interests as well. When examined closely, security interests enable their holders to assert several privileges of ownership without bearing any of ownership’s concomitant burdens.

In seeking to explain security interests, the Article offers a comprehensive account of capital investment more generally, systematically examining the various interests held in corporate capital structures. Though critics have bemoaned the inequity associated with the priority right in bankruptcy — a secured debtholder can get all its assets back in the event of a bankruptcy while unsecured creditors like unpaid employees get nothing — this priority right is an inevitable consequence of recognizing security interests as a form of direct ownership. The real problem lies in the scope of secured debt holders’ limited liability protections. While equity holders enjoy limited liability, in return they are paid only after other claims in the event of insolvency. Secured lenders make no such tradeoff, and are thus arguably over-protected. Understanding security interests as limited liability property, then, offers a more elegant way to understand capital investment at the theoretical level while also helping us recognize when and where our system of secured debt needs reform.

Stern on Government Interference with Private Property

Shai Stern (Bar-Ilan) has posted Property's Tipping Point (Cardozo Law Review) on SSRN. Here's the abstract:

There is a clear tension in the law between exercises of state police power in land-use regulation, including zoning laws, on the one hand, and takings under the Fifth Amendment on the other. Courts have struggled to find a dividing line between the two, but for their efforts we are left only with is a disjointed array of legal tests, each one as flawed as the next. Legal theorists, for their part, must shoulder some of the blame—no single theory can identify the point at which community need outweighs private property rights. Even well-developed theories thus fail to translate into practical application. But this Article is resolved to bridge that gap.

This Article presents a novel theory that provides a unified normative framework for evaluating government interference with private property. It seeks to identify the tipping point at which private property rights must give way to the needs of the community at large. This approach, which I refer to as Property’s Tipping Point, is a burden-shifting framework that accommodates competing theories of property. It builds on landmark Supreme Court cases to provide a unified standard for courts to apply in resolving cases of regulatory takings and exactions.

The approach presented in this Article has both a substantive and a procedural component. It develops two tests that work dynamically to identify the point where community need trumps owner autonomy: the indispensability of needs and the generality of action. The former requires that any government interference with private property is designed to promote community prosperity. The latter test—the generality of action—confines the government to the boundaries of the rule of law. It is only by passing these two tests that a government authority may reach Property’s Tipping Point.

Bell and Parchomovsky on Partial Takings of Property

Abraham Bell (Bar Ilan/San Diego) and Gideon Parchomovsky (UPenn) have posted Incomplete Takings (Columbia Law Review) to SSRN. Here's the abstract:

Incomplete takings are vital and extremely common. Yet, they present unique challenges that cannot be resolved by standard rules of eminent domain. In particular, incomplete, or partial, takings may result in the creation of suboptimal parcels, and even unusable and unmarketable ones. Additionally, partial takings create nettlesome assessment problems that do not arise when parcels are taken as a whole. Finally, incomplete takings engender opportunities for inefficient strategic behavior on the part of the government after the partial taking has been carried out. Current partial takings jurisprudence fails to resolve these problems, and, in some instances even exacerbates them. 

In this Article, we offer an innovative mechanism that remediates the shortcomings of extant partial takings doctrines. Specifically, we propose that whenever the government engages in a partial taking, the affected property owner should be given the power to force the government to purchase the remainder (or, untaken part) of the lot at fair market value. Exercise of this power by the private owner would lead to the reunification of the land in its pre-taking form, while transferring title to the entire parcel to a new single owner, namely the government. 

Implementation of our proposal would yield several important benefits: First, it would allow for the preservation of the current configuration of parcels, enabling them to remain highly usable and marketable. Second, it would lower the cost of determining compensation for private property owners and thereby of the adjudication process as a whole, in those cases in which private owners choose to exercise their entitlement to sell the remainder to the government. Third, it would significantly reduce the ability of the government to behave strategically and externalize costs on private property owners. Fourth, it would create opportunities for more efficient planning and land use by the government as the government would be free to re-parcel, develop and re-sell the parcels sold to it.

Pomeroy on Property Law and Air Rights

Chad J. Pomeroy (St. Mary's) has posted All Your Air Rights Belong to Us (Northwestern Journal of Technology and Intellectual Property) on SSRN. Here's the abstract:

Privacy and property rights are tricky subjects for a variety of reasons. One reason is that they have a unique relationship with each other, and this Article focuses on one of those areas of intersection—that of air rights and invasion of privacy. This is a timely topic due to the advent of drones, and this Article will argue that drone surveillance constitutes common law trespass and that any statute or regulation that permits such activity is in derogation of common law and so should be subject to particularly careful thought and consideration.  

This is not as straightforward a thesis as one might perhaps think because both property and privacy rights have a murky past and have gone through iterative formulations as society has sought to achieve the right balance between the public and private spheres. Privacy has historically focused on expectations of privacy, and property rights have traditionally provided such expectations, but the legally recognized nature of each has not changed over time to keep pace with technological innovation. This has led to a situation where the kinds of rights and causes of action that have traditionally protected individuals no longer suffice in a variety of circumstances.

In particular, the use of drone technology to engage in sophisticated surveillance presents significant challenges to our existing legal framework. Part I of this Article examines the history of privacy law in some detail, and Part II does the same with respect to the common law of airspace property rights. When these two areas of the law are examined in tandem, it becomes apparent that drone surveillance violates rights that society generally wants to protect and that society has historically protected. That protection, however, is now lacking. There is some reason for the failure of the law to keep up with this type of new technology, and Part III examines the historical “aircraft exception” that many may now believe justifies the law’s acquiescence in the face of drone surveillance. Ultimately, though, this Article concludes that this common law exception is not applicable to drones and that, as such, the law should adapt to protect the public from drone surveillance. Part IV concludes this analysis by making a number of recommendations that state and federal legislatures and various administrative agencies would do well to consider when passing laws and promulgating rules regarding drone technology.

Serkin on Insurance for Local Governments and Takings Claims

Christopher Serkin (Vanderbilt) has posted Insuring Takings Claims (Northwestern University Law Review) on SSRN. Here's the abstract:

Local governments typically insure themselves against all kinds of losses, from property damage to legal liability. For small- and medium-sized governments, this usually means purchasing insurance from private insurers or participating in municipal risk pools. Insurance for regulatory takings claims, however, is generally unavailable. This previously unnoticed gap in municipal insurance coverage could lead risk averse local governments to underregulate and underenforce existing regulations where property owners threaten to bring takings claims. This seemingly technical observation turns out to have profound implications for theoretical accounts of the Takings Clause that focus on government regulatory incentives. This Article explores the impact of insurance on land use regulations. In the process, it reveals important insights about public insurance more generally and offers a novel explanation for the burgeoning land use innovation in cities compared to the relative stagnation of land use in the suburbs. It concludes by suggesting new ways for promoting local land use regulations that risk generating takings claims.