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Preview: Reason Magazine - Topics > Property Rights

Property Rights



All Reason.com articles with the "Property Rights" tag.



Published: Wed, 25 Apr 2018 00:00:00 -0400

Last Build Date: Wed, 25 Apr 2018 08:13:16 -0400

 



In New York, Blight Is Whatever Officials Say It Is

Mon, 23 Apr 2018 06:00:00 -0400

Eminent domain abuse has reared its head in East Harlem. New York City officials plan to seize a family-owned dry cleaning business, raze the buildings, and hand the forcibly vacated land to a private developer.

City officials insist that the property is "blighted," the condition of severe disrepair required to trigger a taking under state eminent domain law. But as Damon Bae, whose parents opened Fancy Cleaners after immigrating from Korea in 1981, told the New York Daily News, "the only 'blight' was in the [city-owned] vacant lots the city allowed to sit empty" nearby. In other words, the local government created the very conditions it is now using as a pretext for seizing the property.

Unfortunately for the Baes and others like them, the U.S. Supreme Court rubber-stamped a similar land grab in 2005's Kelo v. City of New London decision.

New York's highest court—the Court of Appeals—did the same in 2009, when it ruled 6–1 to let the state seize property on behalf of a basketball arena and luxury apartment project in Brooklyn. In that case, state officials described the 22-acre project site as "blighted," thereby setting the stage for bulldozers to clear away homes and businesses. Their evidence for the claim? Such factors as "weeds," "graffiti," and "underutilization."

What's worse, the court basically admitted the whole thing was a sham. "It may be that the bar has now been set too low—that what will now pass as 'blight,' as that expression has come to be understood and used by political appointees to public corporations relying upon studies paid for by developers, should not be permitted to constitute a predicate for the invasion of property rights and the razing of homes and businesses," the majority said in Goldstein v. New York State Urban Development Corporation. "But any such limitation upon the sovereign power of eminent domain as it has come to be defined in the urban renewal context is a matter for the Legislature, not the courts."

In his lone dissent, Judge Robert Smith blasted his colleagues for abdicating their judicial duty. "The right not to have one's property taken for other than public use is a constitutional right like others," he wrote. "It is hard to imagine any court saying that a decision about whether an utterance is constitutionally protected speech…is not primarily a judicial exercise."




The Defeat of California Senate Bill 827 and the Future of the Struggle to Curb Zoning

Sun, 22 Apr 2018 10:15:00 -0400

Last week, California Senate Bill 827 was defeated in a committee vote. Its failure was a painful setback for advocates of liberalizing restrictive zoning laws. The bill would have enabled the construction of many thousands of new homes throughout California by loosening zoning restrictions that block new construction. Zoning restrictions are among the main obstacles to expanding both housing and job opportunities for the poor and lower middle class in the United States. Many parts of California, including San Francisco and Los Angeles, have some of the most severe zoning restrictions in the nation, thereby cutting off millions of people from the opportunity to live in areas with greater job opportunities. Restrictive zoning is also major affront to property rights, since it severely limits owners' ability to use their land as they see fit. The case against zoning restrictions is so strong, that it unites economists and housing policy experts across the political spectrum. That includes prominent left-liberals such as Nobel Prize-winning economist Paul Krugman, Matthew Yglesias of Vox, Yale Law School Prof. David Schleicher, and Jason Furman, Chair of President Obama's Council of Economic Advisers. Bill 827 was sponsored by liberal Democratic Sstate Senators Scott Wiener (San Francisco) and Nancy Skinner (East Bay). Nonetheless, liberal cities - including those in California - have some of the most onerous zoning policies in the nation. Such policies not only go against a near-consensus among experts. They are also an affront to values the left claims to hold dear. Shane Phillips, director of of Policy for the Central City Association, notes the "disconnect between liberal aspirations and liberal housing policy": The people who live in coastal urban cities tend to be a pretty liberal bunch…. We care deeply about equality of opportunity,... I'm proud to count myself among their number…. And then we turn to housing…. The outcomes of our housing policies fly in the face of our ideology. For those in need, we support providing supplementary income, health insurance, educational support, and other social welfare programs—and then we erase their value by making our cities too expensive for those most in need of these benefits. Either low income residents can't afford to live in the city at all, or the cost of housing is so high that the value of the benefits is exceeded by the added cost of rent.... Sadly, the defeat of Bill 827 shows that most left of center political activists and voters are not on the same page as policy experts. Libertarian-leaning columnist Megan McArdle and prominent liberal commentator Matthew Yglesias have insightful pieces on the dangers of this disconnect. NYU law Professor Rick Hills, a leading academic expert on housing and zoning, notes that Bill 827 failed in large part because it was opposed by a broad coalition of left-wing activists and interest groups, including even some who claim to be advocates of affordable housing. He points out that some of them endorse utterly implausible theories claiming that loosening restrictions in order to build more housing would actually increase rent rather than decrease it, a position at odds with both basic economics and extensive empirical evidence. Hills compares left-wing denialism on zoning to widespread right-wing denial of the scientific evidence on global warming. As he points out, both represent triumphs of ideological bias over expertise. "In the end," he fears, "the feedback mechanism between data and policy becomes so attenuated, Florida sinks into the sea, and San Francisco sinks into a housing crisis." This state of affairs is indeed lamentable. But the situation may not be quite as dire as Hills fears. Unlike climate change, zoning has only recently become a significant political issue, after a long period during which few nonexperts paid much attention to it. Even now, the amount of attention it gets is still only a small fraction of what it merits. While some left-wing activists clearly do have strong bi[...]



"Little Pink House" Brings the Kelo Case to the Big Screen

Wed, 18 Apr 2018 10:15:00 -0400

The soon-to-be-released independent film Little Pink House dramatizes the story behind Kelo v. City of New London, the notorious 2005 Supreme Court decision in which the justices ruled that it is permissible for the government to condemn homes in order to promote "economic development." Although the Fifth Amendment only permits the taking of private property for "public use," a narrow 5-4 majority ruled that a taking that transfers property to private developers is permissible. The Kelo case generated a massive public reaction, with over 80% of Americans opposing the ruling, and 45 states passing reform laws intended to restrict the use of eminent domain for private development. No other case united such disparate people and groups as the NAACP, libertarian property rights advocates, Ralph Nader, and Rush Limbaugh. Little Pink House, loosely based on journalist Jeff Benedict's book of the same name, does an excellent job of portraying the human drama that led to Supreme Court decision. It shows how a group of lower-middle class New London, Connecticut homeowners found themselves steamrolled by a plan to take their land in order to facilitate a development project backed by powerful political forces, including Connecticut Governor John Rowland, the New London Development Corporation (the private organization that planned and conducted the takings on behalf of the City of New London), and Pfizer, Inc., a major pharmaceutical firm that hoped to benefit from the development project. The film depicts how Susette Kelo - owner of the iconic "Little Pink House" that became a nationally known symbol of the case - and her neighbors did all they could to resist the seizure of their land through the political process, but were overmatched by powerful opponents. It also portrays some (but by no means all) of the extralegal harrassment by which the NLDC sought to pressure owners to sell "voluntarily." These shenanigans included such tactics as menacing late night phone calls, dumping of waste on the resisting owners' property, and locking out tenants during cold winter weather. The film movingly depics the pain and desperation of people faced with the loss of their homes, without any effective recourse. The multiyear legal and political battle over the takings was an excruciating ordeal for those involved. As Richard Beyer told me in an interview, he and the other property owners felt as if they were "living in our own prison" during the "whole period" of litigation. The movie also effectively conveys the role of the Institute for Justice (IJ), the libertarian public interest law firm that represented the property owners on a pro bono basis, and took the case all the way up to the Connecticut Supreme Court and the federal Supreme Court. There is no better cinematic portrayal of how a public interest law firm like IJ, the NAACP Legal Defense Fund, or the ACLU operates: simultaneously litigating cases in both the courtroom and the court of public opinion. The film even manages to accurately depict some key aspects of the main legal issue at stake in the litigation: is the correct definition of "public use" broad enough to encompass anything that might benefit the public in some way, or is it limited to publicly owned projects or private ones that have a legal duty to serve the entire public, such as a public utility? As the film shows, one of the key moments in the case came when Justice Sandra Day O'Connor asked New London's lawyer whether it would be permissible to condemn a Motel 6 in order to replace it with a Ritz Carlton simply because the latter might produce more tax revenue: he answered yes. The movie necessarily omits or simplifies some key aspects of the Kelo story. Most of the property owners' side of the tale is seen through the eyes of Susette Kelo, whom IJ chose as the main public face of the case in part because she is charismatic and very effective in media appearances. As with other iconic Supreme Court cases, such as Brown v. Board of Education and Tinker v. Des[...]



Stossel: Little Pink House

Tue, 03 Apr 2018 10:40:00 -0400

Susette Kelo bought a run-down home. She fixed it up and painted it pink. Then the government came and took it.

"Eminent Domain" has long allowed politicians to grab your property to build roads, railroad tracks, a border wall–anything they claim is for "public use." But they wanted Kelo's house so they could give the property to a private developer. Is that right?

A new movie called "Little Pink House" tells the story of how Susette fought for her home, all the way to the Supreme Court.

Eventually she lost her case, and her home.

Justice Sandra Day O'Connor explained the problem in her dissent, writing, "nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory."

The decision alarmed people across America. Some states passed laws limiting their politicians right to grab your property.

Several years after the Supreme Court's decision, John Stossel went with Susette to look at the place where her home used to stand, where politicians had said "the tax-paying development" would be. There was nothing there, just unused land. Even today, 13 years later, there's still no development. The politicians were wrong. Susette and others lost their homes anyway.

Stossel says this new movie, "The Little Pink House," which comes out at the end of the month, is a good reminder of just how powerful, and wrong, politicians often are.

The views expressed in this video are solely those of John Stossel, his independent production company, Stossel Productions, and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

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Court Rules That Seattle Law Banning Landlords From Screening 'Qualified' Tenants Is a Taking

Thu, 29 Mar 2018 19:20:00 -0400

Yesterday, a Washington state court struck down a Seattle law that requires landlords to accept all "qualified" tenants on a first-come-first-serve basis. Once the landlord set minimum qualifications that all tenants must meet, he or she is forbidden to discriminate between them on any basis, or to reject the next tenant in line, so long as the unit in question is vacant. Judge Suzanne Parisien ruled that the law violates the Washington state constitution because it takes property without compensation, and also effects a taking for an unconstitutional "private use." The purpose of the law is to combat "implicit bias" by landlords. For reasons I discussed here, it is likely to harm potential tenants more than it benefits them. The court ruled that "choosing a tenant is fundamental attribute of property ownership," like the right to sell property, and therefore the state cannot take this right away, without having to pay "just compensation," as required by the Takings Clause of the state constitution. Although "landlords are permitted to set their own criteria," the court concluded that the right to set such "preliminary, general rental criteria, does not substitute for the discretion to choose a specific tenant." In effect, landlords are forced to take specific tenants, even if they might not want them, thereby being saddled with an unwanted physical occupation of their land. In addition, Judge Parisien concluded that the Seattle law violates Article I, Section 16 of the state constitution, which forbids state and local governments from taking property for "private use." In this case, the property right taken is not used for a public project, but instead goes to a private party, the next "qualified" tenant in line. Both of these issues would likely have come out differently if litigated under current Supreme Court precedent interpreting the Takings Clause of Fifth Amendment to the federal Constitution. The Supreme Court is generally reluctant to rule that a regulation of property qualifies as a taking unless it results in a permanent physical occupation of the condemned property, or wipes out all economically valuable uses of the land. The Fifth Amendment indicates that takings must be for a "public use," which is similar to the Washington Constitution's bar on takings for a "private use." In cases such as Kelo v. City of New London (2005), the Supreme Court has ruled that virtually anything that might create some sort of "public benefit" qualifies as a public use, even if the new owner of the condemned property is a private party, and even if the government fails to prove that the supposed public benefits are actually likely to materialize. I criticized Kelo in my book, The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain. The decision is highly controversial and may well eventually be overruled or limited. Bu so far it remains on the books. Washington, however, is one of many states that have interpreted their state constitutions as providing stronger protection for property rights than the federal Supreme Court's interpretation of the Fifth Amendment. As Judge Parisien notes, Article I, Section 16 "offers greater protection to private property owners than its federal counterpart," and has been interpreted by the Washington Supreme Court as "an absolute prohibition against taking property for private use" (though that still permits takings that transer property to private entities that have a legal duty to serve the entire public, such as public utilities). Yesterday's decision also ruled in favor of the property owners on two other issues, concluding that the Seattle law violates Due Process Clause of the state constitution, and that its restrictions on landlord advertising violate the right to freedom of speech (also under the state constitution, rather than the federal one). The ruling is likely to be appealed, and the case could eventually end up in the state supreme court. The Pac[...]



Maryland City Raises Property Tax on Businesses by 800 Percent, in Bid to Attract More Businesses

Mon, 19 Mar 2018 16:45:00 -0400

Here's a good rule of thumb: If you want more of something, don't tax the dickens out of it. This principle appears to have eluded the town of Seat Pleasant, Maryland, which jacked up five businesses' property taxes by 800 percent as part of a scheme to attract more businesses to the community. Now two of the targeted companies are suing, claiming the small suburb—located just outside D.C—violated everything from their own charter to the U.S. Constitution when it imposed the tax. "It is backward economic thinking. It's borderline racketeering," says Steven Franco, who owns and operates the Discount Mart and is one of the plaintiffs in the suit. Franco saw his property taxes shoot up from less than $6,000 to over $55,000 in less than a year. This, he says, has had an "extremely adverse impact" on his business. "People's schedules have been cut. Profits have been almost depleted....One guy had to get laid off." Other plaintiffs in the lawsuit include married couple Si Quang Chen and Chang Lin Chen, who own a Chinese restaurant next to Franco's store. Their property tax bill went from $3,482 to $31,180. In May 2017, the Seat Pleasant council passed a yearly budget that included a special assessment to fund a "Special Revitalization District for Businesses." The tax was supposed to bring in about $252,864 a year, which would be used to spur economic development and develop a "stronger financial portfolio" for the city. According to Seat Pleasant's charter, a special assessment like the one levied on Franco and the Chens must be spent on specific improvements to the targeted taxpayers' properties—for example, by adding a sidewalk or sewer main. The city must also hold a public hearing on the assessment and give affected property owners a chance to appeal. But the budget document makes it clear that the assessment is intended to benefit the entire town. Menawhile, the lawsuit alleges that Franco and the Chens received neither a public hearing nor a chance to appeal. The suit also claims that the tax violates the Fifth Amendment to the U.S. Constitution's prohibition on taking property without due process of law. Mayor Eugene Grant, named as a defendant in the lawsuit, tells the local NBC affiliate that "all of these dollars are necessary for us to provide efficient and effective services for the residents of Seat Pleasant." Grant is a controversial politician, who held court for several months in a tent outside the Seat Pleasant City Hall after the city council voted to bar him from the building because of alleged hostile behavior toward city staff. In 2016, he engineered a takeover of the city council with a slate of candidates favorable to himself, in an election that sparked accusations of voter fraud. Grant has expressed a desire to redevelop the area occupied by the businesses that were hit by the assessment. Franco thinks the tax is intended to force him to sell his property to the city, which already owns sizable nearby lots. Grant had previously floated the idea of using eminent domain to seize Franco's property, according both to the lawsuit and to texts supposedly sent between Grant and Franco. (The texts have been posted to the website xposesp.com.) Franco, whose store sells everything from milk to computers to school uniforms, says that Seat Pleasant is already a difficult place to do business, setting aside the special assessment. Most Maryland personal property taxes—a tax paid on furniture, tools, and other movable property used in a business—are levied at less than 2 percent, with many towns and counties charging less than 1 percent or having no personal property tax period. Seat Pleasant's personal property tax, by contrast, is 15 percent, over six times the Maryland jurisdiction with the next-highest rate. Franco says that such high tax rates, plus the treatment he and other business owners have experienced, will only discourage the economic development that local [...]



Supreme Court Will Hear Important Property Rights Case

Mon, 05 Mar 2018 16:25:00 -0500

Earlier today, the Supreme Court decided to review Knick v. Township of Scott, an important property rights case. The most important issue the Court will consider is whether to overrule Williamson County Regional Planning Commission v. Hamilton Bank, a 1985 decision that makes it very difficult or impossible to bring takings cases in federal court. Under Williamson County, a property owner who contends that the government has taken his property and therefores owes "just compensation" under the Fifth Amendment, cannot file a case in federal court until he or she has first gotten a "final decision" from the appropriate state or local regulatory agency and has "exhausted" all possible remedies in state court. Even after all of that, it is often impossible to bring a federal claim, because a variety of procedural barriers preclude federal courts from reviewing state court decisions in cases where the case was initially brought in state court. In some cases, governments defending against takings claims even exercise their right to "remove" the case to federal court, and then manage to get the case dismissed because the property owner did not manage to first "exhaust" state court remedies (a failure caused by the defendants' own decision to get the case removed). Williamson County creates an egregious Catch-22 trap for property owners: before they can bring a claim in federal court, they must first go through state courts and administrative agencies. But the very act of going to state court makes it virtually impossible to later appeal the case to a federal court! This is the kind of Kafkaesque idiocy that gives the legal profession a bad name. One might ask why it matters whether takings cases are litigated in state court or federal court. After all, both state and federal judges have to apply the Takings Clause of the Fifth Amendment, and both have to follow relevant federal court precedents. In many cases, the result will be the same, regardless of venue. But in some situations, particularly ones where precedent is unclear and the issues may be ambiguous, state courts could well be biased against property owners, because they have close connections with the state and local governments that undermined the property rights in question. This may be particularly likely in the many states where judges are elected, and are therefore part of the same political coalition as local and state government officials. In addition, allowing review in federal court helps ensure enforcement of at least a minimal uniform floor of constitutional rights through the nation. That, after all, is one of the main purposes of having federal constitutional rights in the first place. As prominent nineteenth century Supreme Court Justice Joseph Story explained in Martin v. Hunter's Lessee, a famous 1816 decision, one of the main reasons why federal courts have ultimate jurisdiction over federal constitutional issues is "the importance, and even necessity of uniformity of decisions throughout the whole United States, upon all subjects within the purview of the constitution." Story also warned that the availability of federal judicial review is essential to prevent enforcement of constitutional rights from being being impeded by state court bias in favor of their own state governments: The Constitution has presumed... that State attachments, State prejudices, State jealousies, and State interests might sometimes obstruct or control, or be supposed to obstruct or control, the regular administration of justice. Hence, in controversies between States, between citizens of different States, between citizens claiming grants under different States, between a State and its citizens, or foreigners, and between citizens and foreigners, it enables the parties, under the authority of Congress, to have the controversies heard, tried, and determined before the national tribunals. The Catch-22 problem Willi[...]



Border Control Installs Camera On Man's Property Without Asking. When He Takes It Down, They Demand It Back. Now He's Suing.

Tue, 27 Feb 2018 11:45:00 -0500

The government's efforts to stop illegal immigration keep coming at the expense of the property and privacy rights of landowners along the border. Just ask Ricardo Palacios. The 74-year-old attorney and rancher has experienced an ongoing stream of harassment and intrusions from Customs and Border Protection (CBP) agents at his cattle ranch, located just north of Laredo, Texas. Palacios claims that CBP agents have repeatedly entered his ranch without warrants and questioned his family members as they enter and leave the property. At one point, he says, they assaulted Palacios' son following a late-night traffic stop. The last straw came in November 2017, when Palacios found a small surveillance camera affixed to a Mesquite tree on his property. When Palacios removed the device, he was contacted by the CBP and by the Texas Rangers, both claiming ownership of the camera and threatening Palacios' arrest if it were not returned. Faced with conflicting ownership claims for the camera and the possibility of arrest, Palacios sued both agencies in December 2017. "We are asking a judge to tell the federal government, specifically Border Patrol, to stay off our client's property without permission, without a court order," says David Almaraz, one of the attorneys representing Palacios. The lawsuit claims that through their repeated, unsanctioned intrusions onto his property, CBP agents are guilty of criminal trespassing and of violating the Fourth Amendment's prohibition on warrantless and unreasonable searches. He seeks $500,000 in compensatory and punitive damages, plus a judicial declaration that immigration officials cannot enter Palacios' property without a warrant or his consent. Almaraz says that his clients' problems with Border Patrol started when the agency moved a permanent checkpoint it maintained on I-35 from 13 miles north of border to 29 miles north of the border, far closer to the Palacios ranch. In April 2010, Palacios sent a letter to the local CBP chief complaining of agents performing aggressive, suspicionless traffic stops, repeatedly trespassing onto his property, and damaging the barbed-wire fences enclosing his ranch. The letter also claims that Border Patrol agents assaulted one of his sons after he declined to answer questions at a traffic stop. According to Palacios, the CBP pulled the man from his vehicle, threw him to the ground while he was handcuffed, and locked him in a cell for over an hour. "He had many, many incidences where he found Border Patrol walking around his property at night with flashlights right outside his house," Almaraz tells Reason. "Sometimes they would leave. Other times they would say, 'We can do whatever we want.'" According to the lawsuit, the Border Patrol would insist that they were allowed to enter the property without a warrant because they were within the 25-mile zone. The Immigration and Nationality Act of 1952 gives immigration officials the power to enter without a warrant any private property within 25 miles of an external boundary "for the purpose of patrolling the border to prevent the illegal entry of aliens into the United States." Palacios argues that this is immaterial because his property sits some 35 miles from the border, something Almaraz says "anyone can look at a map and see." Even if he were within the zone, though, he could make a compelling argument that the government is exceeding its statutory limits. "The question becomes what 'entry for the purpose of patrolling' means," says Chris Rickerd of the American Civil Liberties Union. The CBP has adopted an extremely broad definition of this provision: cutting fencing, conducting traffic stops on private property, even clearing vegetation and making permanent alterations to the landscape. The installation of cameras and other recording devices without a property owner's consent, the CBP likewise claims, is allowed as p[...]



Brickbat: Strong Property Rights

Tue, 20 Feb 2018 04:00:00 -0500

(image) A federal judge in Brooklyn has awarded $6.7 million to graffiti artists whose work was destroyed when the owner of dilapidated warehouses they had painted in Queens, New York, tore the buildings down. The judge ruled Jerry Wolkoff, owner of the buildings, violated a federal law giving artists rights to their work, even when someone else owns the physical work, or in this case, the buildings the work was painted on. Wolkoff allowed the artists to paint the buildings but said they always understood he would tear the buildings down.




City Demands $6,000 from Woman over Illegal Chickens

Wed, 14 Feb 2018 11:55:00 -0500

Ramona Morales, a landlord in Indio, California, was cited $225 because one of her tenants was raising chickens in the backyard of a home, in violation of city ordinance. Such citations are not terribly unusual. The surprise came later. A private firm the city had hired to handle code enforcement violations billed her for thousands of dollars for the cost of her own prosecution. She ended up paying nearly $6,000. This scheme to cash in on relatively minor code enforcement issues was investigated and exposed by Desert Sun reporter Brett Kelman last November. This week the property-rights-protecting lawyers of the Institute for Justice waded into the fight. On Tuesday they filed a class action suit against Indio, the nearby city of Coachella, and the law firm Silver & Wright. Their aim: to stop this oppressively expensive code enforcement racket. Here's how this scheme works. In these towns, when code enforcement officers track down issues like broken windows or unpermitted construction, they don't simply cite the offenders and demand they fix it. They turn the cases over to Silver & Wright for criminal prosecution. Typically the property owners plead guilty and are ordered to pay small fines, as happened with Morales. Then, months later, they get a bill for thousands from Silver & Wright demanding that they pay the law firm's fees for the costs of being prosecuted. They can appeal, but that brings another kick in the gut: a second bill charging them even more money for the legal costs of fighting the appeal. One Coachella man was charged tens of thousands of dollars in prosecution fees over an unpermitted expansion of his living room. Another family has been billed nearly $40,000 over code violations that were mailed to a woman who had died at a property that was sitting vacant. When I first blogged about this nasty business, I noted that Silver & Wright's website bragged that the firm could find ways to "make nuisance abatement and code enforcement cost neutral or even revenue producing." (Interesting note: I can no longer find this quote on the site.) The Institute for Justice also took note of the firm's promise that cities could make money off code enforcement. In its announcement of the suit, which is being pursued with the help of the lawyers of O'Melveny & Myers, the institute notes that California courts have ruled that it's illegal for prosecutors to have a direct financial stake in the cases they pursue. Institute for Justice attorney Jeffrey Redfern breaks down the consequences: No one should have a warrant out for their arrest and be forced to pay $6,000 to resolve a simple dispute about a few backyard chickens. This could have been resolved with a simple phone call, but it wasn't, in part, because Silver & Wright's business model creates a perverse financial incentive to prosecute cases like Ramona's in criminal court, rather than treat homeowners with goodwill. The institute is trying to get the courts to shut this whole system of enforcement down and to return the money paid by Morales and others who have been fleeced by the firm. Below, watch a video from the Institute for Justice explaining how this racket works: src="https://www.youtube.com/embed/IbSOBBRBIbE" allowfullscreen="allowfullscreen" width="560" height="340" frameborder="0">[...]



Exposing Taxis to Competition from Uber and Lyft Is Not a Taking that Requires Compensation Under the Constitution

Mon, 05 Feb 2018 10:20:00 -0500

It is no secret that taxi company profits have taken a major hit because of competition from ride-sharing services such as Uber and Lyft. Some cab companies have tried to recoup their losses by filing lawsuits claiming that they are entitled to compensation under the Takings Clause of the Fifth Amendment, which mandates that the government must give "just compensation" to people whose "private property" is taken by the state. They contend that jurisdictions that issue medallions to taxi companies have, in effect, created a property right entitling those firms to exclude competition from ride-share services. A recent ruling by federal district Judge Michael Baylson of the Eastern District of Pennsylvania rightly rejects such a claim filed by Philadelphia cab companies [HT: Nick Sibilla of the Institute for Justice]. The key flaw in the taxis' position is well summarized by an earlier opinion in a similar case decided by the Seventh Circuit Court of Appeals in 2016. It was written by Judge Richard Posner, probably the most distinguished federal lower court judge of the last several decades. Baylson quotes part of the following telling passage from Posner's ruling: [T]he City [of Chicago] is not confiscating any taxi medallions; it is merely exposing the taxicab companies to new competition —competition from Uber and the other TNPs [Transportation Network Providers]. "Property" does not include a right to be free from competition. A license to operate a coffee shop doesn't authorize the licensee to enjoin a tea shop from opening. When property consists of a license to operate in a market in a particular way, it does not carry with it a right to be free from competition in that market... Indeed when new technologies, or new business methods, appear, a common result is the decline or even disappearance of the old. Were the old deemed to have a constitutional right to preclude the entry of the new into the markets of the old, economic progress might grind to a halt. Instead of taxis we might have horse and buggies; instead of the telephone, the telegraph; instead of computers, slide rules..... Taxi medallions authorize the owners to own and operate taxis, not to exclude competing transportation services. The plaintiffs in this case cannot exclude competition from buses or trains or bicycles or liveries or chartered sightseeing vehicles or jitney buses or walking; indeed they cannot exclude competition from taxicab newcomers, for the City has reserved the right... to issue additional taxi medallions. Why then should the plaintiffs be allowed to exclude competition from Uber? The issuance of medallions does not create a legal right to to exclude competitors, even if cities often used the medallion system to create an artificial scarcity of competition, thereby fleecing consumers and driving up taxi company profits. Baylson also effectively refutes the Philadelphia taxi firms' claim that the Philadelphia medallion system should be interpreted to create a constitutionally protected property right even if similar systems in other cities do not (see pp. 55-56 of his opinion). The simple fact of the matter is that, while the medallions may be protected property rights, "[t]here is no allegation that the government seized or confiscated medallions." And the medallions do not create constitutionally protected "property rights in the transportation market itself, which are nowhere mentioned in statute [that established the medallion system]." I would go further and suggest that even if the laws conferring medallions did explicitly guarantee the holders protection against competition, that still would not be enough for courts to require compensation under the Takings Clause. The Clause does not require government to compensate businesses for any and all policies t[...]



Neil Gorsuch and Samuel Alito Butt Heads Over the Fourth Amendment, Again

Thu, 01 Feb 2018 10:05:00 -0500

A major split seems to be developing between conservative justices Neil Gorsuch and Samuel Alito over the issue of property rights and the Fourth Amendment. The most recent evidence of this division came on January 9, when the U.S. Supreme Court heard oral arguments in Byrd v. United States. This case arose in 2014, when a woman named Natasha Reed rented a car and allowed her fiancé, Terrence Byrd, to drive it in violation of her rental contract, which listed her as the sole authorized driver. When the state police stopped Byrd for a minor traffic infraction, the officer searched the trunk and discovered heroin and several flak jackets. Byrd is fighting to have that evidence thrown out as the fruits of an illegal search. The question presented to the Supreme Court is this: "The Fourth Amendment protects people from suspicionless searches of places and effects in which they have a reasonable expectation of privacy. Does a driver in sole possession of a rental vehicle reasonably expect privacy in the vehicle where he has the renter's permission to drive the vehicle but is not listed as an authorized driver on the rental agreement?" During the oral arguments, Justice Neil Gorsuch observed that Byrd's lawyer, Robert Loeb, had offered a property rights theory "on which you might prevail." That theory, "essentially as I understand it," Gorsuch said, is "that possession is good title against everybody except for people with superior title." "We think the property interest here, the right that...Mr. Byrd would have had to bring a trespass action," Loeb replied, "demands a recognition of his right to invoke the Fourth Amendment." In other words, Byrd had "possession" of the car under common law principles. If, while driving it, somebody else tried to break in and steal it from him, he would have a common law right "to bring a trespass action," as Loeb put it, against that would-be thief. In this case, the trespasser is law enforcement, which, absent probable cause, has no authority to search the trunk. Justice Samuel Alito apparently did not like the sound of that. "The problem with going down this property route is that we go off in search of a type of case that almost never arose...at common law, where an unauthorized sub-bailee brings an action for trespass to chattel against a law enforcement officer. When would that ever have happened in 18th-century America? Never." Loeb pushed back on Alito's characterization. "It's your right to bring trespass action against a stranger," he told Alito. "The fact that you can exclude a stranger and bring a trespass action against him is what supports your property right under the Constitution." A few minutes later, Alito tried to poke another hole in the property rights theory that Gorsuch had seemingly endorsed. "The Constitution uses the word 'property' numerous times," Alito told Loeb, "but the word 'property' doesn't appear in the Fourth Amendment. It talks about effects, which is defined by Samuel Johnson's dictionary as 'goods or movables.'... Is it your argument that any property interest whatsoever falls within the definition of effects if we are going to go back to an originalist interpretation of the Fourth Amendment?" "I think if the common law recognizes your [right]," Loeb replied, "then both under the common law and common sense, that it makes sense to recognize a right to invoke a Fourth Amendment right." Gorsuch remained quiet during those exchanges between Alito and Loeb. But he spoke up again in favor of the property rights theory during the second half of the oral arguments, when Assistant to the Attorney General Eric Feigin was presenting the government's side of the case. According to Feigin, Byrd, "like other unauthorized drivers, simply has no connection to the car at a[...]



This California City Is Threatening a Family Over Property Fines Sent to a Dead Woman at the Wrong Address

Thu, 18 Jan 2018 13:25:00 -0500

Not even your death will keep the government of Coachella, California, from trying to nickel-and-dime you out of every last cent. Just ask the family of Marjorie Sansom, who died in 2016 at age 91. The city levied thousands of dollars in fines on the woman due to code violations on a lot she abandoned. It tried to collect them by mailing bills to an empty house where she hadn't lived for years. Samson, meanwhile, was suffering from dementia and being cared for by her family, which says it never received any of those mailings. Now the city is demanding that the family cough up $39,000 to cover the back fines and to pay for the cleanup for the empty lot. That's more than the value of the property itself. Worse still, officials are being dismissive of evidence that the city knew its complaints were not reaching the woman or her family. The government just wants its money. The whole outrageous story was carefully investigated and reported by Brett Kelman of the Palm Springs Desert Sun. It's a follow-up to a heavily researched piece he published in November, which documented how Coachella and a private legal firm the city had contracted with were abusing code enforcement regulations to extract huge sums from property owners. The city would cite property owners for typical code violations, like having damaged property or for unapproved home upgrades. Months later, the property owners would get massive bills from the legal firm, charging them for the cost of prosecuting them in the first place. That law firm, Silver & Wright, is in the thick of the Sansom case. It sent the woman invoices (still mailed to the wrong address) demanding thousands of dollars in fines, court fees (even though there were no court hearings), prosecution fees (nobody was prosecuted), and reimbursement to the city for the time spent cleaning up the lot. In Kelman's story, neither the city nor the law firm shows any signs of worry that they've gone too far. Despite threatening this family with liens of thousands of dollars for fines they didn't even know existed, the city and the firm insist they're doing everything above the board: When asked to comment on the Sansom's property this month, Coachella officials and a city attorney said that they were unaware of the owner's advanced age, mental state, true address or death at any point during the nuisance property case, but still stood by the actions taken by the city. Luis Lopez, Coachella's development services director, said the city presumed the citations and legal notices it had mailed to Sansom were received—even though they were notified twice by the U.S. Postal Service that the documents were sent to a vacant house. Lopez also defends holding Sansom's heirs responsible for her debt, saying her legal guardian should have been maintaining her land and that funds collected from the lien would "go towards replenishing the public's money" that was spent to inspect and clean her property. After The Desert Sun noted that a majority of Sansom's debt came from punitive fines, which are not reimbursement of public money, Lopez said the family should still pay because of their negligence. "The city believes these fines are justified in this case due to the willful, or at least reckless, disregard for the public safety of the community which includes an elementary school as evidenced by the nuisance on the property," Lopez wrote in an email statement. "Additionally, the fines are justified because there was no 'good faith' effort by the owners or successors in interest to contact the city, pay part of the citations or abate the nuisance." Reminder: The family says they never saw the citations because they were sent to an abandoned house, not to them. Kelman even has a photo of the cert[...]



Florida Couple Fined $50 Per Day for 'Illegal' Treehouse on Their Own Property

Wed, 10 Jan 2018 16:45:00 -0500

(image) A private treehouse overlooking the ocean should have been a source of relaxation and fun for Florida couple Lynn Tran and Richard Hazen. But the hideaway, built on beachfront property they owned on Anna Maria Island, wound up rooting them in a prolonged legal battle with local authorities.

After exhausting their options in Florida, Tran and Hazen appealed to the U.S. Supreme Court—which rejected the case on Monday. The Second District Court of Appeal rejected the case in 2015. That means the couple has no recourse but to respect a circuit court judge's initial ruling to take the treehouse down.

Tran and Hazen built their treehouse in 2011, after local authorities informed them that no special permit would be required to built it. The structure cost them about $25,000.

But in 2013, an anonymous complaint to Holmes Beach city officials noted that the treehouse had actually been built on land where such structures were prohibited. A subsequent inspection from Holmes Beach code enforcement determined that Tran and Hazen's treehouse was in multiple violations of the city code. It also faulted the couple for failing to get proper building permits.

Now the city is fining the couple $50 every day the treehouse remains up.

The kicker? Tran and Hazen can't start tearing down the treehouse until they get the proper permits for tearing down a Holmes Beach home.




California Bill Cutting Back Zoning Could Increase Access to Housing and Jobs for Millions

Tue, 09 Jan 2018 10:15:00 -0500

As economists and other experts on both right and left have come to recognize, restrictive zoning is one of the biggest obstacles to affordable housing and job opportunities for the poor and lower middle class. Zoning restrictions on housing construction literally lock out millions of people from housing and job markets, greatly lower the potential incomes of the poor and lower middle class, and impeding economic growth. The state of California - especially the San Francisco Bay area - has some of the nation's most egregious zoning rules. A new bill in the California state legislature, sponsored by liberal Democratic state Senators Scott Wiener (San Francisco) and Nancy Skinner (East Bay), and Democratic Assemblymember Phil Ting (San Francisco) would radically alter this sorry state of affairs. Henry Grabar has a helpful description at Slate: Wiener's bill, SB-827, flies in the face of every assumption Americans have held about neighborhood politics and design for a century. It also makes intuitive sense. The bill would ensure that all new housing construction within a half-mile of a train station or a quarter-mile of a frequent bus route would not be subject to local regulations concerning size, height, number of apartments, restrictive design standards, or the provision of parking spaces. Because San Francisco is a relatively transit-rich area, this would up-zone virtually the entire city. But it would also apply to corridors in Los Angeles, Oakland, San Diego, and low-rise, transit-oriented suburbs across the state. It would produce larger residential buildings around transit hubs, but just as importantly it would enable developers to build those buildings faster. As Wiener describes in a Medium post about the bill, a McKinsey study finds that, if enacted, it could well facilitate the construction of some several million new housing units in urban and suburban areas within California. Many of them would be in areas with numerous job opportunities, such as Silicon Valley, which currently shuts out large numbers of people with its zoning rules. Wiener's bill is not perfect. For example, I disagree with its requirement that buildings within the affected areas have maximum height requirements of 45 to 85 feet (depending on the location), in cases where there were preexisting local height limitations that are lower than that. In my view, the height of a new building should almost always be decided by the owner, not the government. It would have been better to override local height limitations entirely, except perhaps in situations where taller buildings pose a threat to public safety. Nonetheless, the bill would be a truly revolutionary improvement over the status quo. It would simultaneously increase housing and job opportunities for the poor, facilitate greatly increased economic growth, and strengthen protection for property rights. As Grabar notes, the bill may well be "too radical to pass." It will surely face opposition from some current homeowners and a variety of powerful interest groups, including politically connected developers, influential landowners who benefit from inflated housing prices, and others. But even if it does not pass, it is a valuable addition to the political debate, and could help promote progress by expanding the "Overton Window" of policy options that become a part of mainstream discourse. As Cornell Law School Dean Eduardo Peñalver (a leading left of center property scholar), recently wrote in a Facebook post about Bill 827, "[i]ncreasingly, land use law will be where progressives and libertarians meet." It is hard to find a better example of this convergence than combatting restrictive zoning in California. Thi[...]