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Are Prices Just?

Robert C. Hockett & Roy Kreitner, Just Prices, 27 Cornell J.L. & Pub. Pol’y (forthcoming 2018), available at SSRN.

Our economic system, and particularly our laws of property and contracts, assumes that prices arise naturally from the workings of a neutral market. Rational actors with complete information operate independently, and the laws of supply and demand establish a unique price for a good or a service. The market price established in this manner reflects the value of that good or service. If these assumptions are correct, then one may conclude that the price of any item is “just” in the sense that it reflects the value the relevant market places on it and conveys this information to those operating within that market.

Robert Hockett and Roy Kreitner challenge this conclusion by questioning the assumptions that underlie it. For instance, some market actors do not act independently of each other, and coordination may lead to price distortions. More significantly, the rules of trade are not neutral but rather reflect choices that import values of their own. The fact that the assumptions underlying the supposed justice of prices are questionable does not necessarily lead to pricing that is unjust. But this fact should cause us to question whether and when prices are just. The authors seek to propose factors that can help us decide the justice of particular prices.

Hockett and Kreitner begin with a brief review of the early economic literature, which largely argued that competition will lead to fair wages and prices. Some economists questioned those conclusions even then, recognizing that land and other assets were held unequally and that those who possessed a disproportionate quantity of these assets could have a greater effect on prices. Such a system might maximize wealth without maximizing distributive justice. But the early consensus seems to have been that a disorganized and decentralized system is neutral and will lead to prices that are just.

The authors challenge the assumptions of these early economists. The supposedly neutral exchanges that create prices are the products of the laws of property and contracts, which themselves are not neutral. This means that “[p]rices do not ‘just happen.’” (P. 12.) Rather, decisions we have made in the past influence prices. The government, by adopting zoning and intellectual property laws, affects prices. The monetary and tax systems are controlled by the government. “In short, the price system is deliberately engineered rather than spontaneously generated.” (P. 14.)

Returning to the question of unequal resource distribution, Hockett and Kreitner remind us of the injustices inherent in our markets. Some people are at a disadvantage because they possess little property or none at all. And, according to the authors, some market exchanges that proceed should be banned: They raise the examples of sales of bodily organs and the use of child labor. The occurrence of such transactions has ripple effects throughout the market, with the price of a good for sale in one location perhaps artificially reduced by the child labor that helped produce one of its components somewhere else.

One other assumption – that of rational actors with full information – is undercut by the regular recurrence of market bubbles, runs on banks, and hyperinflation. These illustrations demonstrate that markets are not always self-correcting, at least not right away. And any interventions imposed by government in response to these irrationalities will further distort pricing.

Given that private coordination and public intervention in the market occur regularly, it is inaccurate to describe markets as neutral and uncoordinated. Does this inevitably lead to prices that are unjust? The answer will depend on the context. To begin, we must acknowledge the prevalence of these types of intervention. We also must recognize that this quiet participation in the market can hide “sub-rosa decisions with regressive implications.” (P. 21.) The authors proceed to describe settings in which a more active intervention in the market to influence prices may be warranted to enhance justice.

After briefly discussing drug prices and public benefits, Hockett and Kreitner conclude with a discussion of retirement funds. The move to defined-contribution plans in recent decades may have increased total returns, but these improvements have come at the cost of greater volatility for investors. Perhaps, the authors argue, investment in local projects that produce lower returns but greater intangible benefits might be preferable. The local community will benefit from the investment. The investor, meanwhile, will enjoy the intangible benefits that come from enhancement of the community, along with reduced portfolio volatility, at the cost of slightly lower returns.

Much of the literature on property law relies, perhaps not explicitly, on the assumption of rational economic actors transacting in a neutral market. By reminding us that this economic model does not always reflect how actual market participants behave, Hockett and Kreitner emphasize that the conclusions we draw from these presumptions are not always accurate. They do not seek to demolish the traditional model, which is well-entrenched in the literature. Instead, they ask us to question when the model is least likely to reflect the reality of how true market participants behave.

In some settings, creative use of the pricing system may allow us to attain desirable goals. But even more important than that, as the authors note in closing, is acknowledging the reality that prices are not any more just than the social relations from which they spring. “That means our efforts to improve the latter will proceed in tandem with our efforts to improve the former.” (P. 27.)

Cite as: Gregory M. Stein, Are Prices Just?, JOTWELL (June 5, 2018) (reviewing Robert C. Hockett & Roy Kreitner, Just Prices, 27 Cornell J.L. & Pub. Pol’y (forthcoming 2018), available at SSRN), https://property.jotwell.com/are-prices-just/.

Perspectives on the Right to Exclude and the Dilemma of Climate Change

Katrina M. Wyman, Limiting the National Right to Exclude, 72 U. Miami L. Rev. 425 (2018).

As the United States Supreme Court said in 1979 and restated in 1982 and then restated again in 2002, “‘the right to exclude others’ is ‘one of the most essential sticks in the bundle of rights that are commonly characterized as property.’”1 Just as the bundle of sticks metaphor has become ubiquitous and virtually indispensable to the definition of real property, so too has the right to exclude become essential to the idea of the assemblage of rights and things that constitute real property. Katrina M. Wyman, in her article Limiting the National Right to Exclude, challenges her reader “to rethink the robustness of the right to exclude that states currently enjoy” against the challenges to human mobility that she believes climate change will generate for millions of people. (P. 459.)

Regardless of one’s position regarding climate change, Wyman draws her reader into a compelling “what if” conversation. What if the earth’s physical environment is changing such that, in a relatively short period of time, land that is currently inhabited will become uninhabitable, either because of sea level rise or because of increasingly high temperatures? How should we understand the prospects of individuals and cultures that become dispossessed under such scenarios?

Wyman is willing to imagine curtailing the rights of sovereign states to exclude foreigners under the circumstances mentioned above. She discusses three categories of recognized limitations on the rights of private landowners to exclude and considers how they inform a discussion of the degree to which states’ rights to exclude foreigners can or should be curtailed.

The first of the three categories involves necessity-based limits, pursuant to which a private landowner’s right to exclude must give way, in cases of imminent danger, to the right of others to enter the landowner’s property to save their own lives or property. (P. 440.) If private rights must yield to great public welfare concerns in the private landowner context, Wyman argues, these same public welfare concerns may “override the right of states to exclude foreigners in peril.” (P. 442.)

The second category of limitations on the rights of landowners to exclude is anti-discrimination limitations in the public accommodations area. (P. 445.) Title II of the Civil Rights Act of 1964 is the private analog of the state as the quintessential “‘public accommodation[]’ because [states] open their borders for trade, including trade with other nations and foreigners who travel to buy and sell goods and services, and for tourists to simply visit.” (P. 447.) Thus states seem no different from their private counterparts in this category and should have similar limits on whom they must accept and serve.

The third and final category of restrictions on the private landowner’s right to exclude that Wyman offers is eminent domain, the power of the government to take private property for a public use upon the payment of just compensation, pursuant to the Fifth Amendment of the United States Constitution. (P. 452.) Wyman concedes that no comparable right empowers one state to forcibly transfer the land of another sovereign. She also acknowledges that the idea of such forcible transfers is a “highly objectionable throwback to the era of European colonization….” (P. 453.) But, Wyman engages the work of scholars who support a right of partial displacement of existing countries from some of their territories by societies that are rendered refugees as a result of climate change.

Wyman’s normative contribution is to invite her reader to consider the possibility of shifting towards a framework of greater human mobility across national borders, and perhaps even open borders. What is exciting about Wyman’s contribution is that she has taken such a historic concept, the right to exclude, and has offered a new way of approaching it.

I began my 1L property class this semester with Johnson v. M’Intosh. One of the lessons of this iconic case is that “[a]n absolute [title], must be an exclusive title, or at least a title which excludes all others not compatible with it.”2 I am excited to share Wyman’s article with my students and to challenge them to experience the historic concept of the right to exclude in a fresh and new way, in a way that grapples with challenges and opportunities of the twenty-first century.

  1. United States v. Craft, 535 U.S. 274, 283 (2002) and Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435 (1982) (both quoting Kaiser Aetna v. United States, 444 U.S. 164, 176 (1979 []
  2. Johnson v. M’Intosh, 21 U.S. (8 Wheat.) 543 (1823). []
Cite as: Carol Necole Brown, Perspectives on the Right to Exclude and the Dilemma of Climate Change, JOTWELL (May 4, 2018) (reviewing Katrina M. Wyman, Limiting the National Right to Exclude, 72 U. Miami L. Rev. 425 (2018)), https://property.jotwell.com/perspectives-on-the-right-to-exclude-and-the-dilemma-of-climate-change/.

So What Are the “Damagings” Clauses and Why Do We Care?

Maureen E. Brady, The Damagings Clauses, 104 Va. L. Rev. (forthcoming 2018), available at SSRN.

In her article, The Damagings Clauses, Professor Molly Brady comprehensively analyzes provisions known as “damagings clauses,” which twenty-seven states have enacted in their constitutions. Her work explains the history of their enactment, the courts’ interpretation of these clauses over time, and the potential for reenergizing these constitutional claims to address governmental damages and injuries to property owners that takings jurisprudence or the common law may not otherwise remedy.

Professor Brady’s stated goals for the article are to persuade readers that “there is a place for damagings within condemnation law, that this neglected constitutional provision has the capacity to address a confusing and undertheorized gap in the application of the compensation requirement, and that courts have lost sight of the language’s history in narrowly construing it.”

She has certainly persuaded this reader, and I encourage anyone working in eminent domain law, regulatory takings law, or property law to read this article.

I am embarrassed to say that, even if I had heard about state damagings clauses in the past (which I do not recall), I have never paid any attention to them until I read Professor Brady’s draft paper last year for the Property Law Works in Progress session at the AALS Annual Meeting in San Francisco. Please read this article so you will not be similarly embarrassed in the future, as I anticipate that scholars and litigants will be hearing more about these clauses in response to projected infrastructure growth.

As Professor Brady sets out in a heavily researched history of the beginning of these clauses, Illinois was the first to adopt a damagings clause into its state constitution in 1870 to address a gap in condemnation law “during controversies over street grading and railroad construction.”

Brady expresses this gap as one in which property owners experience a diminution in the value or usefulness of their property as a result of government action that does not take, occupy, or regulate their particular property but that does substantially impair their property interest and should require compensation based on principles of fairness and justice.

The Court in Lucas v. South Carolina Coastal Council expressed this gap as the “gross disparity” between the landowner whose property is taken by eminent domain to build a highway and the landowner who has suffered a ninety-five percent loss in value from the government’s nontrespassory and nonregulatory actions that are not compensable.1

Professor Brady notes that “long before regulatory takings were even conceived of as a category, hundreds of lawyers in jurisdictions across the country worried about the fact that physical takings might not cover all the activities of government affecting land for which compensation should be required,” and they moved to address this problem through state constitutional changes.

The article provides many examples of government actions such as alterations in the landscape to accommodate railroads where nearby “homes [were] either left in midair or buried by mountains of dirt filling in the streets.” Because these actions did not appropriate or occupy land, they were noncompensable even though they destroyed property values or caused the ouster of the landowner.

The language of the state damagings clauses adopted in response to these noncompensable actions varies among the states. However, most states have adopted the language used by either Illinois or Pennsylvania. Illinois in 1870 constitutionalized the principle that “Private property shall not be taken or damaged for public use without just compensation.” In its 1874 constitution, Pennsylvania provided:

Municipal and other corporations and individuals invested with the privilege of taking private property for public use shall make just compensation for property taken, injured or destroyed by the construction or enlargement of their works, highways or improvements, which compensation shall be paid or secured before such taking, injury or destruction.

The damagings clauses offer the opportunity for both professors and practitioners to address the “gross disparity” that has existed in takings jurisprudence between landowners who are the target of condemnation or confiscatory regulation and nearby landowners who experience the devaluation or destruction of their property interests from what Abraham Bell and Gideon Parchomovsky have described as “derivative takings.”

Professor Molly Brady’s excellent article is not only a “must-read” for purposes of understanding “these forgotten provisions of the state constitutions,” it also presents some intriguing discussions of the relationship of nuisance law to the interpretation of these clauses and takings jurisprudence.

  1. 505 U.S. 1003, 1019 n.8 (1992) (noting “[i]t is true that in at least some cases the landowner with 95% loss will get nothing, while the landowner with total loss will recover in full. But that occasional result is no more strange than the gross disparity between the landowner whose premises are taken for a highway (who recovers in full) and the landowner whose property is reduced to 5% of its former value by the highway (who recovers nothing). Takings law is full of these ‘all-or-nothing’ situations.”). []
Cite as: Shelley Ross Saxer, So What Are the “Damagings” Clauses and Why Do We Care?, JOTWELL (April 6, 2018) (reviewing Maureen E. Brady, The Damagings Clauses, 104 Va. L. Rev. (forthcoming 2018), available at SSRN), https://property.jotwell.com/so-what-are-the-damagings-clauses-and-why-do-we-care/.

Beyond the State-Owner Binary: Repositioning the State’s Property-Resource Responsibilities with Respect to All Community Members (Including Property Owners)

Laura S. Underkuffler, Property, Sovereignty, and the Public Trust, 18 Theoretical Inquiries L. 329 (2017).

Laura Underkuffler’s recent article, Property, Sovereignty, and the Public Trust, is part of a special issue of Theoretical Inquiries in Law. The collection as a whole is an important read for anyone interested in the relationships between individual property rights claims and the role and remit of the state in the “private property” sphere. The twelve articles collected in the special issue offer insightful and wide-ranging contributions to these important debates and, both individually and collectively, will hold much interest for Property section readers.

Underkuffler’s contribution examines the theoretical basis for what she describes as the ubiquitous assumption in liberal democratic systems that government should forbear from interference with existing individual property entitlements. Her starting point is the sovereign’s duty to respond to the needs of all members of its community, and from this position she describes the concept of forbearance as “an inherently troublesome proposition.” (P. 330.)

In the course of the article, she examines the core arguments of conventional theories of government forbearance from interference with existing individual property entitlements—for example, for protecting individual reliance interests, or for public policy reasons like encouraging investment or enhancing social stability, or through the tautology that the idea of property itself determines the requirement of government forbearance.

Yet, Underkuffler concludes that each of these arguments offers insufficient reasons, on its own terms, to adequately explain the “forbearance phenomenon.” She offers an alternative lens through which government forbearance can be explained, rooted in the “fiduciary relationship” between a government and its citizens. Fiduciary theory offers an interesting frame for thinking about the structured, institutional, hierarchical power dynamics of relationships between the state and its citizens, and offers a fresh concept for giving content to the state’s responsibilities towards property owners.

Crucially, this fiduciary duty applies not only to property owners but to all citizens. Through this move, Underkuffler repositions the same state obligation that mandates government forbearance from interference with individual property rights on the basis of potentially overreaching power as also applying to non-owners. By widening the population to whom this state duty is owed to include all citizens, Underkuffler shifts the focus away from whether the state should act with respect to private property, to how the state should carry out its all-citizen duty.

Her answer, applying Evan Fox-Decent’s theory of “the state as fiduciary,”1 focuses on the fiduciary’s responsibility to be “other-regarding” and “to act with due regard for the [beneficiary’s] best interests.” (P. 346.) In this context, the “beneficiaries” of the state’s power include all individual citizens, and the existence of the fiduciary duty demands that “government at the very least must engage in serious reckoning with individual citizens’ (as well as collective) interests.” (Id.)

Through this move, Underkuffler extends the property/sovereignty debate beyond the state-owner binary, to take account of the interests of other members of the community, who live “outside the bubble” of property ownership. She is careful to emphasize that this does not imply that the interests of private property owners should not be valued and protected by government forbearance; indeed, she argues that the individual interests of property owners “must be considered, seriously, in sovereign decision-making.” (Id.)

Nevertheless, her approach opens up space for arguing that—where these individual property-owning interests conflict with collective interests—the individual claim will not, and should not, always prevail. Through the fiduciary lens, Underkuffler simultaneously recognizes the government’s obligation to check its potentially overreaching powers with respect to property owners, and that:

Fiduciaries, by reason of the demands of the fiduciary obligation, are obligated to all of their beneficiaries equally. There is no basis, in fiduciary theory, to rule in – at the outset – the claims of some beneficiaries, and to rule out the claims of others. Government as a fiduciary must reckon seriously not only with the needs of its beneficiaries who own property, but also with the needs of those who do not.

(P. 348.)

The idea that the state acts under a duty to give “serious reckoning” to competing claims is not unknown in property systems beyond the United States.

Underkuffler refers to the framework constructed under the South African Constitution of 1996 (P. 352) for the purposes of enabling the newly remade state to carry out this duty, and to the national constitutional provisions adopted in Germany after reunification in 1989 (Pp. 351-52).

Indeed, the case law triggered by property reallocation following German reunification included a further test of the “fair balance” struck by the German state when the dispossessed owners appealed to the Grand Chamber under Article 1 of the First Protocol to the European Convention on Human Rights2, with that court concluding (in the exceptional circumstances of reunification) that the “deprivation” of property without compensation was in accordance with law, “in the public interest,” and had struck a fair balance between the general interests of the community and the requirements of the protection of individual rights. Underkuffler describes these balancing processes—between the interests of property owners and “the public interest”—as a “public-fiduciary” approach.

In seeking to “illuminate the fuller context in which these questions arise” (P. 353), Underkuffler emphasises the importance of the property resource to human life:

Of all conceivable human interests, none is more fundamental than the ability to appropriate and retain property. It is a stark biological fact that of all commonly asserted human rights, property claims are among the most essential to human life…the ability to live – and to appropriate property to do so – is assumed by any other human right of which we can conceive. When it comes to property, the stakes could not be higher. In other words, government forbearance towards existing property entitlements is rooted in property’s substantive function, and its required guarantees.

(P. 347, emphasis in original.)

As the passage above demonstrates, Underkuffler moves among property-as-resource, property claims, and property rights, while also touching on the suggestion that property (in the form of property rights) is the “guardian” of other human rights—a proposition that has been challenged in debates about the relationship between the right to property and other (human) rights claims. For example, Andre van der Walt, writing from the South African context, argued that property is not “the saviour, the knight on the white steed, the guardian of every other right,” and that positioning property law in that guardian role makes property—and property rights – too central to debates about the governance of property-as-resource in the interests of the whole community.3 It will be interesting to track how this crucial distinction is advanced in future scholarship developing the “state-as-fiduciary” approach to property and sovereignty.

Underkuffler’s article—and this special issue as a whole—is likely to be of considerable interest to property scholars, and to provoke much further discussion—within the United States and beyond—about the frameworks we use to think and talk about the relationship between owners and non-owners, and the role of the state in governing the valued resource of property in the public interest.

  1. Evan Fox-Decent, Sovereignty’s Promise: The State as Fiduciary (2011). []
  2. Jahn & Others v. Germany (2005) (applications nos. 46720/99, 72203/01 and 72552/01). []
  3. AJ van der Walt, The Modest Systemic Status of Property Rights, 1 J. L. Prop. & Soc’y 15 (2014). See also my jot on that article. []
Cite as: Lorna Fox O'Mahony, Beyond the State-Owner Binary: Repositioning the State’s Property-Resource Responsibilities with Respect to All Community Members (Including Property Owners), JOTWELL (March 9, 2018) (reviewing Laura S. Underkuffler, Property, Sovereignty, and the Public Trust, 18 Theoretical Inquiries L. 329 (2017)), https://property.jotwell.com/beyond-state-owner-binary-repositioning-states-property-resource-responsibilities-respect-community-members-including-property-owners/.

Property, Race, Segregation, and the State

Property scholars have neither forgotten nor ignored the government’s role in creating and furthering racial segregation. Scholars have written extensive work on redlining,1 racially restrictive covenants,2 the siting of public housing in minority poor communities,3 and the resistance of wealthier white towns to affordable housing.4

Nevertheless, Richard Rothstein’s book, The Color of Law, should be required reading for property scholars and students. Beautifully written, the book is packed with new details and stories that illustrate the many ways government—at the local, state, and federal levels—denied African-Americans equal access to space and property.

Rothstein’s goal is to convince readers that contemporary segregation is not the result of market forces but reflects the operation of de jure segregationist policies. Using historical research showing the racial animus of policymakers, The Color of Law connects historical examples of segregation drawn explicitly along racial lines with segregation accomplished through supposedly race-neutral guidelines such as single-family zoning.

As Rothstein shows, when the Supreme Court disallowed localities from explicitly denying African-American families a right to live in protected white communities, cities responded by both ignoring the Supreme Court’s commands and by adopting policies that, while not racist on their face, shared the same motivation.

I first approached The Color of Law as a chore. As someone who writes about race and property,5 I felt I compelled to read the book, but my expectations were low. Even if the American public does not appreciate the way in which Home Owners’ Loan Corporation appraisals combined with Federal Housing Administration lending practices in support of the white middle class and discriminated against African-American families, countless law review articles already tell that story. But The Color of Law not only makes that story come alive by showing how government policy blocked particular African-American families from acquiring property they could afford, but it also shows how a web of other policies contributed to segregation.

Borrowing a page from Jedediah Purdy’s move in The Meaning of Property to look at labor law through a property lens,6 Rothstein shows how government-supported employment discrimination suppressed incomes and made it much more difficult for African-Americans to acquire property. The Color of Law also highlights the ways white communities used violence, with the approval, and oftentimes involvement of, their local governments, to push out African-Americans.

Some areas that we now consider “white” are that way today because they adopted sundown policies, which forbade African-Americans “from residing or even from being within town borders after dark.” (P. 42.) When African-Americans sought to integrate neighbors—such as in Levittown, New Jersey and Richmond, California—white mobs harassed incoming black families mercilessly.

Even though such mob violence is often not thought of as government action, as Rothstein argues, when police officers support the mob and fail to check those officers or prosecute white rioters who threaten African-American homeowners, such behavior cannot be written off as “rogue actions” but instead amounts to state policy. (P. 142.) The attention in recent years to disproportionate targeting of African-Americans by police for scrutiny and violence only serves to underline the importance of Rothstein’s argument that, though segregation can appear to be the result of individual choices, it instead has a de jure character.

The only real concern I had when reading The Color of Law is that of readership. The book seems destined to be read by those already prepared to accept its central argument and never opened by those who prefer to ignore the inexorable link between race and property.

The Color of Law is not the first book to highlight the ways that today’s segregation and wealth disparities are the result of past government action.7 But its vivid details and quality writing makes The Color of Law worth the attention of those already familiar with the major issues and, most importantly, of those who prefer to put blinders on when it comes to race as they think and write about property.

  1. See Ta-Nehisi Coates, The Case for Reparations, The Atlantic (June 2014) (highlighting the history and significance of redlining). []
  2. See, e.g., Richard R.W. Brooks & Carol M. Rose, Saving the Neighborhood: Racially Restrictive Covenants, Law, and Social Norms (2013). []
  3. See Michael H. Schill & Susan M. Wachter, The Spatial Bias of Federal Housing Law and Policy: Concentrated Poverty in Urban America, 143 U. Penn. L. Rev. 1285 (1995). []
  4. For a great history of the fight for affordable housing in one particular white suburb, see David L. Kirp et al., Our Town: Race, Housing, and the Soul of Suburbia (1996). []
  5. See Ezra Rosser, The Ambition and Transformative Potential of Progressive Property, 101 Calif. L. Rev. 107 (2013). []
  6. See Jedediah Purdy, The Meaning of Property: Freedom, Community, and the Legal Imagination (2010). []
  7. See, e.g., Thomas M. Shapiro, The Hidden Cost of Being African American: How Wealth Perpetuates Inequality (2005); Douglas S. Massey & Nancy A. Denton, American Apartheid: Segregation and the Making of the Underclass (1993). []
Cite as: Ezra Rosser, Property, Race, Segregation, and the State, JOTWELL (February 7, 2018) (reviewing Richard Rothstein, The Color of Law: A Forgotten History of How Our Government Segregated America (2017)), https://property.jotwell.com/property-race-segregation-state/.

Teaching Property Through Indian Land Law

Jessica A. Shoemaker, Complexity’s Shadow: American Indian Property, Sovereignty, and the Future, 115 Mich. L. Rev. 487 (2017).

Many first-year property classes start with the centuries-old Johnson v. M’Intosh (1823). There, Chief Justice John Marshall declared that the Indians were but occupants on their ancient lands, subject to the Europeans’ ownership, which was founded upon their “discovery” of America. Apart from general musings on the fairness and cogency of this ruling, property professors mostly leave the discussion of Indian land law and how it developed over time for another day and another course.

Professor Shoemaker’s article, Complexity’s Shadow: American Indian Property, Sovereignty, and the Future, reveals how Indian land law, despite its complexity, is a brilliant construct for teaching traditional property concepts such as the system of land tenures as well as property’s limits and justifications. It is also well-suited to understanding other doctrinal topics such as the regulatory state, decedents’ estates, and torts.

Why is Indian land law not embraced in the first-year property course? It could be that it is too obscure and too costly to understand and to rationalize. Unlike property law as it applies to non-Indians, landowners in Indian land law do not benefit from the historical presumptions in favor of well-marked interests and rights. Professor Shoemaker reveals that Indian land law imposes not only costs associated with understanding the rules that limit transfers and use of Indian property, but also demoralization costs when those limits do not accord with tribal interests, either societal or economic. She states “[c]omplexity has an obscuring, shadowing effect. Indian land tenure is so complex that it has been difficult to see all the intricacies happening inside.” (P. 544.)

Professor Shoemaker analyzes the complexity of Indian land law under a four-component framework — institutional differentiation, technicality, density, and indeterminacy. First, the system is institutionally differentiated because multiple legal regimes and jurisdictions make up the decision structures. The Indian land system has at least three legal regimes that apply, federal, state, and tribal. Additionally, there are several systems of land tenure: trust property (individual and tribal); fee ownership (by Indians and non-Indians); and “emulsified” (having attributes of both). All have varying degrees of rights and limits on autonomy. And, sometimes all reside within the same reservation and between co-owners.

Second, in Indian land law, technicality in the rules adds to complexity. An ever-growing bureaucracy must approve all transfers, even as to the right of a co-owner to sole possession and as to tribes conveying “fee-like” interest to members.

Third, density of rules also adds complexity. Concepts are defined by and are peculiar to Indian lands, leading to high information costs with the concomitant effects on access to capital.

Finally, the above factors combine in Indian land law to make otherwise basic areas of property law very uncertain. As the degree of uncertainty in the laws increases, so does the difficulty of predicting outcomes.

Professor Shoemaker shows how piecemeal congressional measures over time have not worked to fix the problem, but to exacerbate it. Limits imposed on transfers by devise, measures to define eligible heirs, and measures to define the nature of life estates have failed, largely because the definitions did not accord with intra-tribal relations and were just too cumbersome. Even some well-conceived state initiatives have been frustrated by the need to obtain the Secretary of Interior’s approval. Examples include statutes intended to: [1] acknowledge tribal rights to implement binding agricultural resource management plans on Indian trust lands; [2] pass tribal probate codes; and [3] allow more flexibility in the leasing of tribal trust lands.

In the end, Professor Shoemaker indicts the Indian land law system as “insidious.” It goes against all the received justifications for private property. First, it does not preserve Indian land; under the failed allotment program, Indians lost some fifty million acres of land by transfers to non-Indians. Second, Indian land law also does not facilitate human flourishing; the lack of control under the system discourages economic and personal investment. Third, it is not utilitarian. The non-navigability of the law of trust property results in more than half of trust property sitting idle and unproductive. At the same time, Indians suffer from high rates of poverty and low rates of homeownership; all the while government bureaucracy grows.

In Prof. Shoemaker’s view, the top-down controls cannot be justified by the claimed rationales. Protection against state imposition on Indian lands does not require limits on tribal authority, only against states. The current land tenure system does not constrain fee owners, even those residing on reservations, because of the different treatment of fee property as opposed to trust property. Nor are limits on tribal authority necessary to protect non-Indian landowners. That could be done by conferring rights on the non-Indians. This leaves the only rationale to be one premised on racism, “the trust status itself being imposed based on the federally determined needs of the then-deemed ‘incompetent’ Indian allottees.” (P. 544.)

In Professor Shoemaker’s assessment, there must be a “gradual cascade of bottom-up transformative steps” to reset the system dynamics, including functional co-ownership schemes, active leasing rights, and liberalizing trust transfers, with “opportunities for meaningful grassroots experimentation and norm-setting around resource use and stewardship.” (Pp. 545; 492.) In other words, there must be sovereignty to sovereign nations over their lands.

Whether or not Indian land law is too embedded in the ground for any meaningful change, we would do well to study the subject, not simply to champion the cause of the Indian if we choose, but also to see what non-Indian land law could be without the foundational limits that protect autonomy and ownership.

Cite as: Shelby D. Green, Teaching Property Through Indian Land Law, JOTWELL (January 22, 2018) (reviewing Jessica A. Shoemaker, Complexity’s Shadow: American Indian Property, Sovereignty, and the Future, 115 Mich. L. Rev. 487 (2017)), https://property.jotwell.com/teaching-property-indian-land-law/.

Equalizing Exactions

Gregory M. Stein, Reverse Exactions, 26 Wm. & Mary Bill Rts. J. (forthcoming 2017), available at SSRN.

Some exactions1 are just bad. By this, I mean that they fail to mitigate the harms they were created to internalize. This struck me recently while I was researching privately owned public open spaces (POPOS), which are often exacted in exchange for a density bonus. Through my research, I determined that POPOS often fail to achieve the goals of good public space, in part because they are often exclusionary. I found myself wondering whether the citizens who were stuck with new dense buildings that block light and air, and who received only a poorly functioning POPOS in exchange, had any legal recourse.

My question, in effect, was whether a neighbor could bring an exactions claim in reverse. I was pleasantly surprised to find that Professor Gregory M. Stein had interrogated this very question in his recent article Reverse Exactions.

Our existing exactions jurisprudence focuses on exactions that are excessive (or, too strong), and thus deprive the project applicant of his or her property rights under the Fifth Amendment. In this creative piece, Professor Stein tackles the opposite situation, wherein a development project is approved subject to exacted concessions, but those exactions are too weak to sufficiently mitigate or internalize the harms associated with the development.

Thus, the project’s negative externalities are inflicted on its neighbors, and those neighbors must bear the costs of the harm. In this case, Stein argues, neighbors should have a right to bring what he calls a “reverse exactions claim.” This claim would enable these third-party community members to challenge the government’s imposition of certain conditions as insufficient, arguing that their property rights have been taken as a result.

Stein begins his article by setting up and critiquing our current exactions jurisprudence. He restates the “essential nexus” and “rough proportionality” tests that the Court has laid out in Nollan and Dolan, but criticizes the application of these tests. According to Stein, the Court has treated governments that exact conditions as entrepreneurs, instead of as representatives or arbitrators.

Specifically, he takes issue with the Koontz Court’s portrayal of governments negotiating exactions as bad actors. The problem, he suggests, is that governments are not always, or even typically, opportunistically looking to enrich their own communities at the expense of the property owner who is seeking discretionary permits. Rather, governments are more often “functioning as mediators and referees.” (P. 19.) Indeed, Stein points out, exactions jurisprudence seems to be unconcerned with the fact that developers often have an incentive to maximize their profits at the expense of their neighbors. Exactions cases are also unique in that they fail to afford the same level of deference to governments that they generally receive in other types of land use decisions.

The problem with current doctrine, posits Stein, is that it leads to governments consenting to development with few or weak conditions that fail to actually mitigate the harms caused by the project. Those governments do this because they are fearful that they will be sued and lose if they propose exactions that are found to be too strong.

Currently, there is no direct way to challenge these overly weak exactions. This leads to an imbalance that favors developers and harms neighbors (and, more broadly, governments). This is where Stein’s proposal comes into play.

While he first suggests that the Court could revisit the Nollan/Dolan/Koontz line of cases to address the imbalance, he admits that this is unlikely. Thus, he proposes that instead, courts recognize a reverse exactions claim.

He defines this proposed claim as one that “neighbors can bring against government officials … [by] argu[ing] that government officials have imposed conditions on an applicant’s development that insufficiently internalize the externalities that the applicant’s project would impose on those neighbors.” (P. 22.) Thus, the neighbors would have a remedy for an “under-exaction,” defined to exist when neighbors are forced to bear those added costs, and thus their property rights are unconstitutionally impaired.

This, it seems, might be the most difficult part of a reverse exactions claim; because it is a type of takings claim, the neighbors must show that they have property rights that are being harmed by the project and its insufficient exactions. For example, Stein suggests that the asserted state interests in Nollan, including protecting the public’s beach views and preventing congestion, might not qualify as neighbors’ protected property rights. Thus, in a hypothetical reverse-Nollan case, while the neighbors might be able to make out a due process claim, they might not be able to raise a reverse exactions claim.

In contrast, Stein imagines a reverse-Dolan situation, wherein the city might allow the Dolans to expand and pave their parking lot while attaching limited exactions that fail to mitigate the increased stormwater runoff that would likely result from the project. In the event that this new impermeable surface directs stormwater onto neighbors’ lots, Stein argues, the neighbors could assert that the city made them give up an easement (allowing the Dolans to flood their land) without compensation. This would constitute the impairment of a property right, and thus the basis of a reverse exactions claim.

Therefore, in order to assert a successful reverse exactions claim—assuming the neighbor can show the taking of a property interest—he or she would first argue (pursuant to Nollan) that the proposed exaction fails to substantially advance the goal of mitigating a certain harm that the project would either create or make worse—here, the stormwater runoff. Second, the neighbor would argue that the condition lacks rough proportionality under Dolan because it fails to go far enough.

If the court finds that such reciprocal rights exist in a project’s neighbors, and finds that the government has imposed too weak an exaction, Stein suggests a scheme for paying just compensation to the neighbors.

Unlike direct exactions compensation claims, which are paid for by taxpayers, “[a]ny compensation that the government is required to pay to the prevailing neighbors [under a reverse exactions claim] would be charged back to the applicant that benefited unfairly from an exaction that did not adequately offset the negative effect of its project.” (P. 22.) Stein would leave the specific procedures for administering reverse exactions claims to be sorted out by courts and state legislatures.

Through this article, Professor Stein joins the ranks of other creative scholars such as Professors Chris Serkin and Tim Mulvaney, who have suggested that we should not always be so defensive when it comes to takings law, and might instead find ways to use it to reach more progressive ends. Stein does that here; the goal of a reverse exactions claim is that the “fear of litigation from neighbors and not just from applicants may lead to more equitable exactions.” (P. 51.)

  1. Exactions are land, fees, or infrastructure that a municipality requires a developer to provide in exchange for a development permit. []
Cite as: Sarah Schindler, Equalizing Exactions, JOTWELL (December 4, 2017) (reviewing Gregory M. Stein, Reverse Exactions, 26 Wm. & Mary Bill Rts. J. (forthcoming 2017), available at SSRN), https://property.jotwell.com/equalizing-exactions/.

Can Transferable Development Rights (TDRs) Be Taken?

Christopher Serkin, Penn Central Take Two, 92 Notre Dame L. Rev. 913 (2016).

Transferable development rights (TDRs) are a land-use planning tool that enables regulators to restrict the development of one parcel of property more densely than would otherwise be permitted by applicable land use regulations, while also giving the owners of the restricted property the right to “sell” their property’s development potential to owners of less-restricted land. Ever since the Supreme Court decided Penn Central Transportation v. New York City,1 a number of legal issues about TDRs have remained unanswered.

In his recent engaging essay, Penn Central Take Two, Christopher Serkin tackles the most important of these issues: Whether TDRs are themselves protected by the Fifth Amendment’s Takings Clause.

To contextualize the question, a word about Penn Central and its aftermath is in order. The facts of the original litigation are well known. In Penn Central, which Professor Serkin correctly characterizes as the “most important regulatory takings case of all time,” the Supreme Court rejected a takings challenge to a historical preservation regulation that prevented the construction of a massive high-rise structure above New York’s Grand Central Station. One of the reasons why the Court held that the “landmarking” of Grand Central did not effect a taking was that, at that time, New York City gave the terminal’s owner (Penn Central Transportation Company) TDRs enabling them to transfer at least some of the landmarked parcel’s development potential to adjacent lots.

To simplify a long story about the later developments, in 2006, the current owners of Grand Central Station—Midtown TDR Ventures (“Midtown”)—purchased the terminal in large part to acquire the TDRs granted at the time of landmarking. Midtown thereafter entered into negotiations to sell the TDRs to an adjacent landowner for $475 million, to enable the construction of one of the tallest buildings in New York City. (As a rule, TDRs are particularly valuable in NYC because they permit the construction of extra stories on buildings.) But, before the sale was finalized, the city rezoned the property to permit the construction of the skyscraper without the TDRs.

Midtown then filed a lawsuit asserting, among other things, that the rezoning of the “receiving” parcel was tantamount to a taking of Midtown’s TDRs. For a variety of reasons, the case settled before any court had the opportunity to opine on the issue.

As Serkin convincingly argues, the question posed in the litigation is a critical one, and its import extends beyond land use policy. As Serkin points out, if TDRs are protected by the Takings Clause, then other regulatory entitlements with “property-like” characteristics, such as emission allowances in cap and trade regimes, tradable fishing quotas, and taxi medallions, presumably are as well.

If the Takings Clause locks these regulatory promises into place, then there is a serious risk of regulatory entrenchment—with potentially negative consequences for both regulators and the regulated. On the other hand, if the government’s pre-commitments are too easily modified or even abandoned, then the value of devices like TDRs and emissions allowances is dramatically undermined for both regulators and property owners.

Serkin’s solution to these difficulties is to permit the government to make binding promises to entitlement holders, provided that these commitments are transparent and impermanent. This is probably the right answer as a matter of regulatory policy, and is in fact analogous to the “amortization” of nonconforming uses in zoning law, which is constitutionally permitted in most (but not all) states.

Serkin’s regulatory proposal, however, leaves many of the constitutional questions raised in the recent TDR litigation unanswered: To begin, are TDRs property at all? TDRs do have property-like characteristics (e.g., they are subject to market transfer). Serkin assumes, citing Charles A. Reich, that certain kinds of regulatory entitlements are property,2 but the concept of regulatory property remains contested and its contours remain amorphous at best.

Second, if TDRs are subject to takings protection, what is the “denominator” against which the impact of the devaluing regulation is to be measured? Serkin suggests that the “denominator” in the Midtown litigation ought perhaps to be the Grand Central parcel as a whole, but Midtown argued, à la Horne v. USDA,3 that the regulation devaluing their TDRs was a total taking of the amount of their loss. This is, as Serkin argues, somewhat circular since the government’s regulatory actions are a significant determinant of the value of TDRs, but there is a certain logic to Midtown’s argument since TDRs are intangible financial “property” if they are property at all.

And, finally, if TDRs serve the purpose of mitigating takings risks—as opposed to, as Chief Justice Rehnquist and Justice Scalia both argued, compensating owners whose property had been taken4—then should regulatory actions devaluing them trigger a reassessment of whether the original regulation, sans TDRs, would have been a taking?

These questions—each of which has far-reaching implications—persist, and will undoubtedly return in subsequent litigation.

  1. 438 U.S. 104 (1978). []
  2. Charles A. Reich, The New Property, 73 Yale L.J. 733 (1964). []
  3. 133 S. Ct. 2053 (2015). []
  4. Penn Central, 438 U.S. at 150-52 (Rehnquist, J., dissenting); Suitum v. Tahoe Reg’l Planning Agency, 520 U.S. 725, 749 (1997) (Scalia, J., concurring in part and concurring in the judgment). []
Cite as: Nicole Stelle Garnett, Can Transferable Development Rights (TDRs) Be Taken?, JOTWELL (November 8, 2017) (reviewing Christopher Serkin, Penn Central Take Two, 92 Notre Dame L. Rev. 913 (2016)), https://property.jotwell.com/can-transferable-development-rights-tdrs-be-taken/.

Questioning the Queue

Katharine G. Young, Rights and Queues: On Distributive Contests in the Modern State, 55 Colum. J. of Transnat’l L. 65 (2016).

A queue, whether it takes the form of a line or a list, is one of the simplest and most familiar algorithms for allocating scarce resources. It is also a tool of social control, a metaphor, and a powerful framing device, as Katharine Young incisively demonstrates in Rights and Queues: On Distributive Contests in the Modern State.1

Young focuses on the way that the queue interacts with rights or—more broadly—entitlements. One of her central examples involves the allocation of public housing in South Africa. Though highly contextualized, Young’s analysis resonates with concerns about housing and social welfare policy elsewhere, including in the United States. Young’s emphasis on the political and rhetorical work performed by the queue is an eye-opening complement to other recent treatments of queues in property law.2

By choosing the queue as the mechanism for delivering an entitlement such as housing, the government makes—and at the same time partially obscures—three important moves. First, it defers fulfillment of the entitlement for at least some subset of the eligible claimants. Second, it defuses discontent by channeling claimants into an ostensibly fair and ordered process. Third, it divides claimants based on their positions in the line, thereby transforming resource conflicts that might otherwise unite claimants against the state into mere skirmishes among claimants. Young shows how these moves effectively stigmatize efforts to secure rights as “queue jumping.” In this way, support for the queue’s ineluctable normative force is secured from the very claimants whose entitlements are simultaneously being eroded and even potentially denied by the queue.

Consider how queues both delay entitlement delivery and (by their very existence) purport to justify the delay. A queue renders scarcity visible and in the process normalizes it—we will, it appears, simply have to wait our turn. If there is a long waiting list for subsidized housing, then that is that—the wait becomes the focus, not the reasons behind the scarcity that produces it.

At the same time, the queue deflects attention away from competing claims that are not represented in this particular line. For example, Young notes how a queue for public housing might deflect attention away from mortgage subsidies—a competing claim in the housing domain that does not appear in the same (or any) queue, and is instead treated as a fixed element of the background against which the queue is formed. The existence and apparently fair operation of the queue thus works to defuse broader opposition to the policies that created the queue-frame.

The queue also divides claimants. It continually announces that what stands between you and the resource (sometimes quite literally) are other claimants. Young emphasizes the accompanying corrosive effect on solidarity as attention turns to one’s position in the line and to concerns about those who have gotten ahead of oneself, rather than (for example) the fact that the state has chosen to put inadequate resources toward fulfilling the entitlement in question.

The line thus directs discourse inward to the line itself and to questions of line management. Attention turns to the difficult tradeoffs that determine the speed with which the line moves forward, such as how to balance the depth of each housing subsidy with the number of households that can be served.3 Focusing on these tradeoffs is an entirely appropriate response to resource scarcity, but queues for entitlements characteristically involve scarcity that is socially and politically constructed and may also be endogenous to the way particular tradeoffs are made.

Decisions about ending access to benefits like housing also seem vulnerable to the logic of the queue—people are waiting, after all. (Justice Black’s dissent in Goldberg v. Kelly, 397 U.S. 254 (1970), employed a similar rationale, maintaining that people would never make it onto the welfare rolls in the first place if removal were made too difficult). Here, however, we confront a potential distinction between the negative rights that might attach to someone who is already in possession of an entitlement (and is trying to keep the state from wresting it away) and the positive rights that the queue-standers patiently seek but do not yet possess.

In this connection, Young examines the case of residents of informal settlements in South Africa who cite a right to housing in their efforts to stave off eviction. In one frame, these residents might be cast as queue-jumpers, but in another frame they are entitlement holders—indeed, property holders—who seek to keep the state from unwinding their rights. These competing frames reveal the disconnect between the language and logic of the queue and the larger normative commitments that a state might make surrounding entitlements. Lines may be able to distribute certain affirmative rights over time, but they are ineffective at distributing shields with which to stop rights violations in progress.

Queues do have benefits, as Young recognizes. They are administratively simple, easy for everyone to understand, and can immediately replace a chaotic scene with a workable sense of order. But when they are used to dole out entitlements, their rhetorical force deserves scrutiny. The fact of the queue fundamentally alters the nature of the entitlement being provided through it, as well as the discourse surrounding that entitlement. The queue purports to provide an allocative answer, but the questions that it implicitly poses also require our attention.

  1. In addition to the work discussed here, see also Katharine G. Young, Narrative, Metaphor, and Human Rights Law: When Rights-Talk Meets Queue-Talk, in Narrative and Metaphor in Law (Mike Hanne & Robert Weisberg eds., forthcoming 2017). []
  2. See, e.g., Kevin Gray, Property in a Queue, in Property and Community 165 (Gregory S. Alexander & Eduardo M. Peñalver eds., 2010); Ronen Perry & Tal Z. Zarsky, Queues in Law, 99 Iowa L. Rev. 1595 (2014). []
  3. See Ingrid Gould Ellen, Housing Low-Income Households: Lessons from the Sharing Economy?, 25 Housing Pol’y Debate 783 (2015); see also David A. Super, The Political Economy of Entitlement, 104 Colum. L. Rev. 633 (2004). []
Cite as: Lee Anne Fennell, Questioning the Queue, JOTWELL (October 17, 2017) (reviewing Katharine G. Young, Rights and Queues: On Distributive Contests in the Modern State, 55 Colum. J. of Transnat’l L. 65 (2016)), https://property.jotwell.com/questioning-the-queue/.

Regulations Hinder Mobility and the National Economy

David Schleicher, Stuck! The Law and Economics of Residential Stability, 127 Yale L.J. (forthcoming, 2017), available at SSRN.

The principal goal of local zoning has been to assure existing residents a stable and comfortable community in which, above all, home values would be protected. In recent years, scholars have focused on whether this cozy arrangement fosters class-based and racial exclusion, and whether it detracts from a sustainable environment. Yet, some leading economists suggest an additional concern—that restrictive local land use and other regulations harm the national economy. In a new article, David Schleicher performs an important service in analyzing, from a legal and public policy perspective, why people are “stuck” in place.

Schleicher’s title reflects his main points that rates of interstate mobility are falling even though people often get better job opportunities when they move, and that this lack of mobility harms the national economy as well as the individuals involved.

We often ignore the interstate consequences of government regulations and subsidies. However, the actions of government at all levels affect the ability of people and industries to adjust in a dynamic and intertwined economy.

In 2001, economist Bill Fischel referred to people casting their ballots so as to protect the value of their houses as “homevoters.”1 By 2016, Fischel was warning that homevoters had seized upon 1970s and 80s concerns about the stability of inflation-driven increases in housing prices, and also newly heightened environmental awareness. The result was these homevoters derailing the pro-development “growth machine” coalition through the enactment of stringent local land use regulations in prosperous cities and affluent suburbs.2 Also in 2016, economists Peter Ganong and Daniel Shoag published a landmark article analyzing how the decline in the historic convergence of income in poor and wealthy parts of the county coincided with rising housing prices in the most productive areas.3

Some of the path breaking work on which Schleicher builds was done by international trade economists like as Robert Mundell, who asked how price inflation and unemployment are related in areas sharing a common currency.4 We are fortunate being in a continental dollar zone, but, as Schleicher put it: “State and local laws that limit labor mobility clearly reduce the degree to which the U.S. is an OCA [Optimal Currency Area]. These policies can prevent monetary policy from matching the needs of tight markets with rising prices (like San Francisco) and slack ones with falling prices and high employment (like Atlantic City).” (P. 13.)

In discussing what makes certain cities highly productive, Schleicher is guided by work, including his own, in the fairly new field of agglomeration economics.5 The basic insights are that some favorable condition leads an industry to develop first in one area or another and that thereafter, firms and individuals specializing in that industry, flock to that location, each building upon the supply of potential employers, employees, and, above all, ideas that are present.

While earlier examples of agglomeration in America include the auto industry in Detroit, areas that are the focus of finance, science, and engineering have become the leaders today. Schleicher notes that “[t]he cities and metro areas that have thrived in the last forty years have been those with advantages rooted in other agglomeration economies, particularly deep labor markets in high-end service industries, deep consumption markets, attractive amenities, and useful information spillovers both inside and between industries.” (P. 16.)

Why, then, are people so rooted in unproductive places? Why don’t they move to cities where they might do their best work? Schleicher notes that there has been little scholarship on the advantages of moving to distant cities. A principal reason why people find it hard to leave depressed areas is that officials have great incentives to keep safety net expenditures local. Also, many workers, especially public employees, are locked in by defined benefit pension plans that impose great costs on workers who move in mid-career. Many are impeded from moving because housing prices in declining areas have decreased, and especially if their mortgage balances exceed the value of their homes.

On the receiving end, government mandates that make the labor market “sticky” bar many potential residents. These include state occupational licensing regulations that sometimes impose vastly different and complex requirements for training, education, and examinations.

As Schleicher explains, “[T]he difficulty in transferring licenses across states makes moving to opportunity harder, harming the national economy.” (P. 25.) Ironically, “research suggests that such positive effects of licensing requirements remain uncertain at best and are often minimal to non-existent.” (P. 30.)

Perhaps the most important barrier to moving to better opportunities is the high cost of housing in prosperous areas, including as a result of restrictions on new housing construction.

He cites research by Chang-Tai Hsieh and Enrico Moretti, who estimated that America’s gross domestic product (GDP) would be 13.5 percent higher if workers could move to productive areas, and that GDP would go up by 9.5 percent if they could move to just three such areas, Silicon Valley, San Francisco and New York.6

Schleicher concludes by offering thoughts about solutions, such as tying federal tax incentives such as the home mortgage interest deduction to less restrictive zoning, providing federal assistance to interstate moves by workers, or facilitating the shrinking of distressed cities through more enlightened municipal bankruptcy laws. (P. 50–54.)

All of these are good ideas, but unlikely to be fruitful in the short term. Americans treasure local control of land uses, and inner-city residents who resist “gentrification,” like affluent suburbanites who resist “densification,” will fight to preserve their communities and ways of life.

Similarly, those who value the ethos (and incomes) of their trades and professions are not apt to submit readily to centralized occupational controls. While federal regimes such as those in the U.S. and Europe find it hard to remove impediments to mobility and prosperity, even highly centralized nations such as France (the cradle of dirigisme), do not do notably better.

None of this is to take away from the power of Professor Schleicher’s cogent observations. We have little chance of dealing with contemporary problems unless we see their patterns and interactions, and Stuck! is a notable achievement in defining the issues we must face.

  1. William A. Fischel, The Homevoter Hypothesis (2001). []
  2. William A. Fischel, The Rise of Homevoters: How OPEC and Earth Day Created Growth-Control Zoning that Derailed the Growth Machine, in Bringing It All Back Home: Evidence and Innovation in Housing Law & Policy (Lee Fennell ed., forthcoming, 2017). []
  3. Peter Ganong & Daniel Shoag, Why Has Regional Income Convergence in the U.S. Declined?, HKS Working Paper No. RWP12-028 (2016), available at SSRN. []
  4. Robert A. Mundell, A Theory of Optimum Currency Areas, 51 Am. Econ. Rev. 657 (1961). []
  5. See, e.g., Edward L. Glaeser, Cities, Agglomeration and Spatial Equilibrium (2008); Edward Glaeser, Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier (2011); David Schleicher, City Unplanning, 122 Yale L.J. 1670 (2013). []
  6. Chang-Tai Hsieh & Enrico Moretti, Why do Cities Matter, Local Growth and Aggregate GrowthNational Bureau of Economic Research Working Paper No. 21154 (2015). []
Cite as: Steve Eagle, Regulations Hinder Mobility and the National Economy, JOTWELL (September 15, 2017) (reviewing David Schleicher, Stuck! The Law and Economics of Residential Stability, 127 Yale L.J. (forthcoming, 2017), available at SSRN), https://property.jotwell.com/regulations-hinder-mobility-and-the-national-economy/.