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Preview: Reason Magazine - Topics > Property Rights

Property Rights

All articles with the "Property Rights" tag.

Published: Fri, 23 Jun 2017 00:00:00 -0400

Last Build Date: Fri, 23 Jun 2017 08:13:19 -0400


L.A. Hotel Union Misleads About Airbnb, Hoping to Get Rid of Competition

Wed, 21 Jun 2017 08:00:00 -0400

In Los Angeles, influential hotel union Unite Here has joined with consumer advocacy groups to form the coalition Fairbnb, all in the name of fighting against Airbnb and the right of citizens to rent out rooms and houses to travelers. Coalition members flocked to city hall last week to push for draft rules that would restrict short-term rentals like Airbnb to 180 days and would allow hosts to rent out only their primary residences. City Council should take the accusations against Airbnb with a grain of salt. Unite Here charges Airbnb with setting up illegal hotels and taking huge chunks of housing off of L.A.'s already strained market—housing for tourists at the expense of locals. Further, they argue that regulations are necessary to protect hospitality workers' right to earn a living. Trying to pin the city's housing crisis on Airbnb is an effective marketing strategy for hotel unions. If their accusations are true, who would defend a business that makes L.A. more expensive for everyone? Rent in the city has increased by 32 percent since 2000 while real income has decreased by 3 percent. The crisis hits low-income Angelenos the hardest; 80 percent of them spend 50 percent of their income on housing. But Airbnb is not the cause of the problem. On Airbnb, there are 17,995 entire homes available for rent in Los Angeles. Even if every unit was filled with tourists every day of the year, this could hardly cause the city's housing crisis—studies estimate that the city needs 551,807 new units to meet low-income Angelenos' housing needs. The Airbnb occupancy rate in Los Angeles is only 25.4 percent, meaning that many of whole house short-term rentals are not totally off the market. They actually house locals for part of the year. Instead of exacerbating the housing crisis, Airbnb provides a lifeline for struggling Angelenos. Airbnb found that 38 percent of hosts are low- or middle-income residents with most using the income from hosting to pay household expenses—71 percent said Airbnb helped them stay in their homes. Hotel unions present themselves as champions of the working class, even as they work to prevent others from earning extra income. As reported in the Daily News, 21-year-old Yajayra Cerrato told City Council's Planning and Land Use Management Committee that long-term Airbnb rentals are a threat to hospitality workers: "Think about the people who work for housekeeping like my mother. For those six months that you guys host there, is she going to be unemployed?" That's far from the whole story. Airbnb supporters showed up in equal numbers to comment on the proposed rules. For every allegedly displaced hospitality worker, there is someone like 77 year-old Al Antonini, who told the L.A. Times that he relies on Airbnb revenue to pay his mortgage. Others told City Council that hosting on Airbnb helped pay off student loans. Furthermore, Cerrato is presenting the city and its citizens with a false choice. Antonini's income does not come at the expense of Cerrato's mother, and there are numbers to show it. Hotel occupancy declined by only 1 percent in 2017 and independent analysis concluded that competition from Airbnb has had a minimal impact on L.A. hotels. As summarized by an Airbnb spokesman, home-sharing attracts a different kind of traveler. Airbnb has brought $600 million in economic impacts and $13 million in tax revenue to the city. Innovations like Airbnb help locals and tourists alike. Regulations would benefit hotels only at the expense of hosts.[...]

A Spectacularly Stupid Idea: Governing Land as a Global Commons

Fri, 02 Jun 2017 14:31:00 -0400

"Land must be considered as a global commons—conceptually by researchers and legally by the international community," argues Felix Creutzig, a climate change economist at the Technical University of Berlin. He makes this perplexing claim in "Govern land as a global commons," an article in the current issue of Nature. Creutzig cites the arguments of the philosopher Mathias Risse, who Creutzig believes has "made a powerful case for humanity's collective ownership of the Earth." Let's briefly consider Risse's position. In his 2008 working paper "Original Ownership of the Earth," Risse begins with two intuitions: "First, the resources of the earth are valuable and necessary for all human activities to unfold, most importantly to secure survival; second, those resources have come into existence without human interference." There is a prior question that Risse (and Creutzig) must answer: What is a resource? Surely edible plants and meat animals count. And just as surely, our forager ancestors claimed and defended territories containing wild edibles against encroachment by other groups. They had no notion that land was collectively owned by all human beings. In any case, Risse's second claim is basically wrong. The vast majority of resources come into existence as a result of what he is pleased to call "human interference." As Creutzig and Risse both note, the 17th century British philosopher John Locke argued that before the rise of civilization, land and natural resources were notionally held in common by mankind. They do not consider deeply another of Locke's arguments: that without the application of human ingenuity, "nature and the earth furnished only the almost worthless materials." Only with the development of private property rights and the rule of law to defend them did nature's worthless materials become useful and valuable. As Locke explained, a landowner has a strong incentive to increase the productivity of his land. By intensively cultivating it, he produces "a greater plenty of the conveniencies of life from ten acres, than he could have from an hundred left to nature, [and] may truly be said to give ninety acres to mankind." Locke also wrote that a privately owned cultivated acre in Britain produces 1,000 times more value than an uncultivated acre left in the commons in America. The same is true for other natural resources. For example, as I have pointed out elsewhere, a deposit of copper is just a bunch of rocks without the know-how to mine, mill, refine, shape, ship, and market it. Petroleum was a nuisance until Edwin Drake figured out in 1859 how to drill for it and refine it into lamp oil. In any case, Creutzig's model for global land governance is to adopt international agreements like the Antarctic Treaty, the Law of the Sea, and, yes, the Paris Agreement on climate change. This is exactly backwards: To the extent that those pacts are needed, it's because they deal with unowned, open-access commons—Antarctica, the oceans, the atmosphere. No treaties are needed when formerly open-access commons have been enclosed and protected by secure property rights. Creutzig does reassure us that "private property will remain protected with the common ownership of global land." But he doesn't appear to really mean that. "Land-use rights can be assigned for a limited period," he suggests. He then notes, with apparent approval, that "Chinese property law limits them to 40, 50 or 70 years." Creutzig doesn't just favor global common ownership; he wants what amounts to global zoning. Who would be the zoning board? The United Nations, of course. "The United Nations' Sustainable Development Goals...don't call explicitly for global coordination of land uses," Cruetzig concedes. But he notes hopefully that the first steps toward such U.N.-led coordination might be taken when the U.N. Convention to Combat Desertification publishes its Global Land Outlook later this year. He also looks forward to the Intergovernmental Panel on Climate Change's upcoming report on land use and climate, due in 2019. "[...]

Local Officials Are Coming for Your Garden

Sat, 13 May 2017 09:00:00 -0400

With spring in bloom, gardening season is underway across the country. That means lettuces and herbs, tomatoes and carrots. But it also means local regulatory busybodies are hard at work in many parts of the country making sure some gardeners' toughest fights this season won't be against drought, weeds, and non-human pests. In Columbiana, Ohio, for example, the city council has proposed to amend existing law to allow residential gardens in the city. Yay? Nope. Residents are crying foul. They call the measure "just another effort on the city's part to restrict their rights." Residents' ire seems justified. The initial amendment proposed by the city council would have legalized gardens, but limited them to backyards only. Columbiana also recently began enforcing a 1974 law prohibiting the keeping of chickens and other backyard livestock. And then there's this jewel: "The city had no laws pertaining to residential gardens, which means they were technically not allowed," reports the local Salem News. "According to the city's laws, if something is not permitted it is prohibited." If that sounds like a local paper misreading the law, think again. "Currently, our ordinances state that if you do not see it specifically written, then you are not technically allowed to have it," says city councilor Crystal Siembida Boggs, who criticizes the rules as "vague." That's really about the best thing someone can say about such a law. Gardeners are under attack from laws like these across the country. I recount many instances of gardeners facing physical removal of their gardens, fines, and even threats of jail time in my recent book, Biting the Hands that Feed Us: How Fewer, Smarter Laws Would Make Our Food System More Sustainable. In 2013, in another case I detail in my book, the Institute for Justice sued the city of Miami Shores, Florida, on behalf of a local couple who the city had ordered—under threat of stiff fines—to rip up the front-yard garden they'd tended for years. A federal state judge upheld the law. "The court finds that the prohibition of vegetable gardens except in the back yards is rationally related to Miami Shores' legitimate interest in promoting and maintaining aesthetics," the judge wrote in his ruling. The plaintiffs appealed to the U.S. Court of Appeals for the 11th Circuit. In another instance I detail in my book, officials in Tulsa, Oklahoma, entered resident Denise Morrison's front yard without her permission and ripped out her edible garden. "Morrison, who was unemployed at the time, was using the foods she grew to sustain herself during a difficult period," I write. "Code officers, on the other hand, were enforcing a city ordinance that said plants cannot be higher than twelve inches 'unless they're used for human consumption.'" Morrison's garden, I note, in fact contained many plants fit for human consumption, including strawberries and spearmint. Tulsa officials didn't care. Morrison sued the city in federal court. The court threw out her lawsuit, arguing she'd been given proper notice by the city. Oklahoma lawmakers recently adopted a law to promote urban agriculture as part of an effort to combat poor access to fresh produce in many cities and towns. The law creates a fund to dole out grants to benefit people in low-income areas—including Tulsa. Thomas Boxley from University of Oklahoma, who runs a school garden project in an impoverished part of Tulsa and who no doubt is doing good work, says his project helps "to show the youth that you can begin to grow some of your food needs right in your backyard." You can, unless Tulsa says you can't. It's hard to see this grant program as anything but a slap in the face to people like Denise Morrison who've been told they can't grow their own food because things like zoning and aesthetics are simply too important. Gardeners and food freedom be damned.[...]

The Prospects for Progress in Africa

Tue, 09 May 2017 07:00:00 -0400

Recently, I came across a stunning statistic. By mid-century, there will be more Nigerians than Americans. Nigeria is one of the world's worst run countries and its unemployment rate hovers around 24 percent. A dysfunctional country and an exploding population do not mix very well. What is true of Nigeria is also true of large parts of the African continent. As we speak, one out of seven inhabitants of the planet lives in Africa. By mid-century, one in four people on Earth will be African. If the current trends continue, somewhere between one third and one half of the world's population will live in Africa by 2100. African unemployment is not easy to guesstimate, but South Africa, the continent's economic powerhouse, suffers from an unemployment rate of 27 percent. How, I wonder, are all of these people going to make a living? This column is, generally speaking, the very definition of optimism. I am, for example, largely sanguine about the impact of automation on America's unemployment rate. Our country has lived through profound economic changes in the past and risen to the challenge. At the time of the American Revolution, for example, over 90 percent of Americans worked in agriculture. As late as 1900, 40 percent of Americans did so. Today, 1.5 percent do, while feeding the country as well as much of the rest of the world too. All that surplus labor was soaked up by manufacturing and, later, services. Adjusted for population growth, a record number of Americans today has a job, dislocation emanating from the IT revolution notwithstanding. Relatively speaking, the United States is well placed to deal with automation, robotics, and perhaps even artificial intelligence. Our state-run primary and secondary education systems sucks, but American universities are second to none and the number of college-educated Americans is at an all-time high. We have a decent legal system and business environment. The welfare state, while technically bankrupt, can provide a cushion for the temporarily unemployed in extremis (and after cuts elsewhere). That does not mean that America does not need reforms, hence the "relatively speaking" at the start of this paragraph. But we are in better shape to face the challenges of the future than many other nations. Unfortunately that is not true of Africa. The African legal system, the African business environment, and all levels of Africa's state-provided education are, compared to the rest of the world, abysmal. The continent is far too poor to afford even a rudimentary social welfare net. So what are the hundreds of millions of people, mostly young, to do in the coming decades? Much of Asia has escaped from poverty through labor-intensive and export-oriented industrialization. Africa, by contrast, is actually de-industrializing. This is not happening because of free trade, since Africa remains the least economically free region in the world. Rather, African workers cannot compete with much more productive Asian labor due to a number of factors that include lack of decent education and skills, bad financial and transport infrastructure, Byzantine bureaucracy and heavy regulation, and so on. To make matters worse, automation and robotics are bound to make Africa's workers even less competitive in the future. Simply put, it is difficult to see how the Asian route out of poverty can be repeated on the African continent. And in order to leapfrog Asian-style industrialization into an American-style modern economy, Africa would need well-functioning rule of law, property rights, and a welcoming business environment. It has none of those. That leaves agriculture, but even here the outlook is not promising. The continent is rapidly urbanizing and few Africans see their future in farming. In any case, farming in the rest of the world is increasingly dominated by large and mechanized agricultural concerns, not small and labor-intensive farms. So, again, where will the African jobs of the future come from? I do not know, but [...]

SCOTUS Says States Have No Right to Money Taken Based on Overturned Convictions

Fri, 21 Apr 2017 10:15:00 -0400

This week the Supreme Court ruled that Colorado has no right to keep fines, fees, court costs, and restitution it extracts from criminal defendants whose convictions are later reversed. By forcing people to prove their innocence before they can get back property that is rightly theirs, the Court said, Colorado has been violating the 14th Amendment's guarantee of due process. The Institute for Justice, which filed a brief in the case emphasizing that the presumption of innocence is an essential aspect of due process, makes a compelling argument that civil asset forfeiture routinely violates that principle. The Court's decision in Nelson v. Colorado, which was joined by seven justices (Clarence Thomas dissented, and Neil Gorsuch joined the Court too recently to participate), came in response to challenges by Shannon Nelson and Louis Madden, who tried to get back money the state took from them based on convictions that were overturned. Nelson, who in 2006 was convicted of two felonies and three misdemeanors based on allegations that she had abused her four children, was sentenced to 20 years in prison and ordered to pay $8,193 in court costs, fees, and restitution, $702 of which was taken from her inmate account before she won a new trial and was acquitted. Madden, who in 2005 was convicted of two felonies based on allegations that he had patronized an underaged prostitute, received an indeterminate prison sentence and was ordered to pay $4,413 in costs, fees, and restitution, $1,978 of which was collected before his convictions were reversed on appeal and the state decided not to prosecute him again. Nelson and Madden got a sympathetic hearing at the Colorado Court of Appeals, which concluded that they had a right to refunds. But the Colorado Supreme Court disagreed, saying they could get their money back only if they followed the process prescribed by Colorado's Compensation for Certain Exonerated Persons statute, a.k.a. the Exoneration Act. That law requires exonerated defendants seeking compensation to file a lawsuit and prove their innocence by clear and convincing evidence. That procedure is prohibitively expensive for people seeking the return of modest sums, and it is no help at all for people convicted of misdemeanors, which are not covered by the law. More fundamentally, the U.S. Supreme Court says in an opinion by Justice Ruth Bader Ginsburg, the Exoneration Act is inappropriate for people who are seeking not compensation for wrongful convictions but the return of money the state took based on legal determinations that are no longer valid. "Colorado may not retain funds taken from Nelson and Madden solely because of their now-invalidated convictions, for Colorado may not presume a person, adjudged guilty of no crime, nonetheless guilty enough for monetary exactions," Ginsburg writes. "To get their money back, defendants should not be saddled with any proof burden. Instead...they are entitled to be presumed innocent." That was true before Nelson and Madden were tried, Ginsburg observes, and it is true again now that their convictions have been nullified. The parallels with civil asset forfeiture are pretty clear. In both cases, the government takes someone's property based on allegations of criminal activity, and in both cases the owners are forced to prove their innocence if they want to get their property back. Nelson v. Colorado "upholds the fundamental principle that Americans are entitled to be presumed innocent until proven otherwise," says Institute for Justice attorney Robert Everett Johnson. "The Court expressly rejected Colorado's argument that the 'presumption of innocence applies only at criminal trials,' explaining that the government 'may not presume a person, adjudged guilty of no crime, nonetheless guilty enough for monetary exactions.' Unfortunately, civil forfeiture laws turn the presumption of innocence on its head. Using civil forfeiture, law enforcement seizes billions of dollars in ca[...]

Maine Lawmaker Targets Foragers on Private Property

Sat, 08 Apr 2017 08:00:00 -0400

When I was a young kid, and I'd hop my neighbor's fence to pluck a handful of Concord grapes that grew on a vine in their yard, I knew three things to be true. First, the grapes tasted fantastic. They were much more plump and earthy than what passes for grapes at the grocery—and their seeds made for the perfect projectile to spit at friends. Second, I wasn't doing any harm at all to the neighbor's grapevine by picking a few ripe grapes. Third, I was trespassing—and in a manner that differed markedly from the occasional going to retrieve a foul ball sort of trespass. I was trespassing and—because I never asked my neighbor's permission, at least until I was older—I was also stealing their grapes. I don't think I was a particularly perceptive child, but what a kid who spat grape seeds at his friends knew in the early 1980s still seems like a pretty good rule. Taking food from other people's property—just like taking their lawn gnome, ladder, or chainsaw—is theft. As I later learned, the right to exclude others from one's property is a fundamental feature of property ownership and a central concept within property law. You'd think the law would embrace this common-sense thinking. But it doesn't always. And the issue isn't as cut-and-dried as my 7-year-old mind made it out to be, as a current controversy makes clear. In Maine, a proposed law would require foragers—those looking to harvest blueberries, mushrooms, and other wild foods—to obtain permission from the property owner before collecting the food. The bill, An Act To Prohibit Foraging on Private Land without Permission, would amend an existing law that serves primarily to prohibit people from going onto private property to chop down and transport Christmas trees. Under the proposed law, three convictions in a 10-year period would brand the violator a felon. One camp—the one that proposed the bill—echoes my own younger beliefs about foraging on private property. "This, to me, is a no-brainer," State Sen. Thomas Saviello told the Bangor Daily News. "If you own the land, it's not my right to go onto your property and take something that belongs to you." State Sen. Saviello proposed the bill after a pair of constituents complained to him that they'd gone to harvest wild foods on their property but found they'd been beaten to the punch. Opponents of the bill argue the rules are overreaching, and would put an end to a Maine way of life. In 2013, when Maine lawmakers floated a similar bill to require hunters and foragers to obtain permission to hunt and forage on private land, the outrage was palpable. "All of the untouched, seemingly forgotten woods of Maine will instantly become off limits until all private landowners are identified, contacted, and hassled for their permission on a slip of paper," wrote Sam Hill, in an op-ed. "Seeking unposted land will no longer be enough for the law-abiding hunter; the local sportsman will have to do pre-season office work, collecting and consolidating the dozens of documents he will have to have in his possession in order to avoid becoming a criminal in the upcoming season. Does this sound like Maine?" Hill argues instead for continuing the status quo: giving property owners the option to post conspicuous signs on their property boundaries warning that they do not permit foraging or hunting. Posting allows people to "easily access unposted private property with the informal permission of the landowner. Among the beneficiaries of this tradition—not always adhered to in other parts of the country—are snowmobilers, hunters, canoers, fishermen, cross-country skiers and hikers." Posting places an affirmative burden on landowners to exclude hunters and foragers from their land, rather than on the latter. Ultimately, the question Maine seeks to answer is who should bear the burden. Notably, while I could find no similar survey of state foraging laws, just 22 states require hunters to ob[...]

The Other Side of Legalized Theft

Wed, 05 Apr 2017 00:01:00 -0400

During a meeting with county sheriffs in February, Donald Trump was puzzled by criticism of civil asset forfeiture, which all the cops in the room viewed as an indispensable and unobjectionable law enforcement tool. "Do you even understand the other side of it?" the president asked. "No," one sheriff said, and that was that. Trump might get a more helpful answer if he asked Rep. Jim Sensenbrenner (R-Wis.), who last week reintroduced a bill aimed at curtailing civil forfeiture abuses. As Sensenbrenner observed, "These abuses threaten citizens' Constitutional rights, put unnecessary burdens on innocent Americans, and weaken our faith in law enforcement." Civil forfeiture lets the government confiscate property allegedly linked to crime without bringing charges against the owner. Since law enforcement agencies receive most or all of the proceeds from the forfeitures they initiate, they have a strong financial incentive to loot first and ask questions never, which explains why those sheriffs were not eager to enlighten the president about the downside of such legalized theft. A new report from the Justice Department's Office of the Inspector General (OIG) highlights the potential for abuse. Between fiscal years 2007 and 2016, the OIG found, the Drug Enforcement Administration (DEA) took $4.2 billion in cash, more than 80 percent of it through administrative forfeitures, meaning there was no judicial oversight because the owners did not challenge the seizures in court. Although the DEA would argue that the lack of challenges proves the owners were guilty, that is not true. The process for recovering seized property is daunting, complicated, time-consuming, and expensive, often costing more than the property is worth. Consider Charles Clarke, a college student who in 2014 lost $11,000 in savings to cops at the Cincinnati/Northern Kentucky International Airport who said his suitcase smelled of marijuana. No contraband was found, and as is typical in such cases the allegations in the federal seizure affidavit were absurdly vague, merely asserting that the money had something to do with illegal drugs. Clarke, who admitted smoking marijuana but denied selling it, ultimately got his money back with interest. But it took two years, and it was possible only because the Institute for Justice represented him for free. Sensenbrenner's bill—which has 15 cosponsors, including House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and six other Republicans—would help forfeiture victims like Clarke by allowing them to recover attorney's fees after a settlement and providing legal representation for those who cannot afford it. Instead of requiring owners to prove their innocence (as the law currently demands), the bill would require the government to disprove it (as in a criminal trial). The bill also would increase the burden of proof in forfeiture trials from "preponderance of the evidence" to "clear and convincing evidence." Although civil forfeiture's defenders argue that it helps destroy drug trafficking organizations, the OIG found that the Justice Department "does not measure how its asset seizure and forfeiture activities advance criminal investigations." Looking at a sample of 100 cases where the DEA seized cash unaccompanied by drugs without a warrant, the OIG found that only 44 led to arrests, advanced existing criminal investigations, or prompted new investigations. "Without fully evaluating the relationship between seizures and law enforcement efforts," the OIG warns, "the Department cannot effectively assess whether asset forfeiture is being appropriately used, and it risks creating the impression that its law enforcement officers prioritize generating forfeiture revenue over dismantling criminal organizations." The report notes that the Justice Department's incuriosity about the circumstances and consequences of forfeitures also means it has little sense of "t[...]

North Dakota Senate Says It’s Fine for Police to Seize Property Without a Conviction

Tue, 04 Apr 2017 13:10:00 -0400

Two states in the upper Midwest this week considered making changes to state laws allowing police to seize property from innocent people suspected of committing a crime. Only one succeeded in protecting property rights. State lawmakers in North Dakota killed a proposal that would have required law enforcement to get a criminal conviction before seizing property though civil asset forfeiture proceedings. Meanwhile, in neighboring Minnesota, a state that already requires a criminal conviction before asset forfeiture can occur, state lawmakers passed and Gov. Mark Dayton signed a bill to strengthen that 2014 law by making it harder for cops to seize jointly owned property after a DUI conviction. Both bills demonstrate the ongoing fight between law enforcement special interests, which argue civil forfeiture is necessary to stop criminal behavior (and often benefit from the process by using seized assets to pad their department budgets), and reformers who see forfeiture as a fundamentally un-just process that victimizes innocent property owners. In North Dakota, it seems the police have the upper hand. According to the Institute for Justice, a libertarian law firm, North Dakota has some of the worst asset forfeiture laws in the country, and that won't be changing after the state Senate unanimously voted down a bill to require a criminal conviction before prosecutors could seize property or money involved in the crime. The bill had passed the state House in February with a 50-42 vote despite opposition from law enforcement groups. In addition to requiring a conviction before state and local police could engage in forfeiture, the bill would have prohibited police departments from passing forfeiture cases off to federal law enforcement authorities, a practice known as "equitable sharing" that is sometimes used to get around state-level restrictions on forfeiture. Unlike North Dakota, Minnesota has some of the nation's best asset forfeiture laws. A 2014 law made Minnesota the second state in the nation to require a criminal conviction before forfeiture could occur, and Gov. Mark Dayton added to those protections for property owners this week by signing a bill to prohibit the forfeiture of jointly owned property, like cars, in the aftermath of a DUI arrest, Minnesota Public Radio reports. The bill was prompted, in part, by a lawsuit challenging the seizure of a car by police in Isanti County, Minnesota. The car was jointly owned by a husband and wife, but was seized by police following the wife's 2006 arrest for DUI. The husband, David Laase, argued that he was innocent and that he should not lose possession of the car because of his wife's crime. The state Supreme Court ultimately upheld the forfeiture. "This reform will open the courthouse doors to wives, parents and other innocent owner claimants and overturn a troubling ruling by the Minnesota Supreme Court," said Lee McGrath, managing attorney of the Institute for Justice's Minnesota office, in a statement. With the new reforms signed into law this week, Minnesota continues to be a national leader in restricting the abusive practice of asset forfeiture. On the western banks of the Red River, though, property rights remain significantly less secure.[...]

Corporate Farming Laws a Bad Deal for Farmers

Sat, 01 Apr 2017 08:00:00 -0400

Ever since the awful Supreme Court decision in Wickard v. Filburn—a 1942 case in which the Court upheld a New Deal USDA program that prohibited farmers from growing more wheat than the USDA said they could, even if the purportedly excess portion did not enter the stream of commerce—the question of just how much the federal government could meddle in farming (and other non-commerce commerce) has been an open one. But if the federal government can clamp down on what and how much farmers can farm, state governments are also in on the act, determining even who may farm, and to whom farmers may sell their farms. The issue is corporate farming: farms owned not by Old MacDonald but instead by a company. Critics paint corporate farms as bigger, sometimes foreign-owned, insular, pollution machines. "Large chunks of our food are controlled by foreign, multinational corporations who don't have the best interests in mind of U.S. families or family farmers," said Tim Gibbons of the Missouri Rural Crisis Center, in comments to the St. Louis Post-Dispatch in 2015. Supporters, not surprisingly, argue against such characterizations. Corporate farms buck the pastoral image of the American small family farm—even if most Americans who actually visited the average small family farm in this country would find it larger and far more modern and dependent on technology than they'd expect. Several states—nine at last check—simply don't permit or severely restrict corporate ownership of U.S. farms and farmland. (These laws are invariably referred to as "corporate farming" or "anti-corporate farming" laws.) One such state is Kansas, where a farmer was banned under state law from selling his farm to a Colorado company. He and the Colorado company recently sued to overturn the law. The Kansas law, reports Courthouse News Service, "require[es] farm corporations be made up entirely of Kansas residents." The plaintiffs argue that the Kansas law is unconstitutional because it impermissibly discriminates against out-of-staters who want to engage in farming in Kansas, and because it prohibits the sale of farmland only for the purpose of continued farming (but not, say, for the purpose of erecting condominiums). In the lawsuit, the plaintiffs allege among other things that the Kansas law "provides strong incentives to remove Kansas agricultural land from agriculture[.]" Again—more condos. As I noted, other states have similar laws on the books. Missouri, for example, limits foreign ownership of farms to just one percent. That's actually an increase from an earlier law, which banned the practice. A 2004 report detailed how Minnesota prohibits farm ownership in most cases by those who aren't American citizens. Other states are slightly less restrictive. Corporate farming rates in Iowa—where corporate farm ownership is limited by law to companies with no more than 25 shareholders—have risen slowly—by just 11 percent from 2007 to 2012—the Des Moines Register reported in 2014. Only one of about every 12 farms in Iowa was, at the time, a corporate farm, according to the report. Some suggest corporate farming laws may slowly be on their way out. That would be a welcome development. Selling to an interested buyer—corporate or not—is a right all farmers should have. But it also shouldn't be the only way farmers can profit from their land. As I describe in my recent book, Biting the Hands that Feed Us—and as others have also described—increasingly strict regulations threaten many small family farms. Big corporations are far better situated to comply with the stricter regulations—and to buy out the small farmer for whom regulatory compliance is a financial impossibility. "For farmers and ranchers, the freedom to operate is [as] important" as a writer's freedom of speech, wrote Beef magazine's Amanda Radke last year. "In the[...]

Georgia Legislature Weakens Eminent Domain Protections

Fri, 31 Mar 2017 14:32:00 -0400

Lawmakers in Georgia voted Thursday to weaken the state's protections against eminent domain, partially undoing reforms passed in the wake of the Kelo ruling and once again allowing governments in the state to seize private property for economic development purposes. The bill cleared both the state House and state Senate on Thursday, the final day of the legislative session in Georgia. Gov. Nathan Deal has not indicated whether he will sign it. The Atlanta Journal-Constitution reports that the bill had "powerful backers" who helped speed it through the state legislature, including local governments who want to use eminent domain to tackle supposedly "blighted" properties and the private developers who stand to gain from making it easier for those governments to do so. "It's good for government, but it's bad for citizens in my judgment. End of story," Charles Ruffin, an Atlanta-based attorney with experience in property law, told the Journal-Constitution. In the 2005 Kelo v. New London case, the Supreme Court said the seizure of private property counted as a legitimate "public purpose" under the Fifth Amendment if the seizure was part of a redevelopment scheme intended to benefit the community and increase the tax base. In the wake of that ruling, many states approved limitations on how eminent domain could be used. Georgia's reforms were some of the best in the country. Passed in 2006, the law tightened the definition of "blight"—importantly, it said property could not be deemed "blighted" for purely aesthetic reasons—and prevented the state from taking property for economic development reasons. Georgia voters later approved an amendment to the state constitution requiring a public vote by elected officials before eminent domain could be used. The bill passed Thursday would reverse the prohibition on seizing property for economic development purposes and would shorten the amount of time a government must hold the property before selling it to private developers. If the bill gets a signature from Deal, governments in Georgia would have to hold seized property for only five years instead of 20 years, as is currently required. That length of time serves as a deterrent to keep governments from trying to "flip" property to private developers using eminent domain, said Benita Dodd, vice president of the Georgia Public Policy Foundation, a free market think tank. It's meant to stop governments from seizing private land for a supposedly "public use" like a road or pipeline project, only to turn around a few years later and sell the land to private developers. "We can only hope that he would side with property owners and not with the governments," Dodd told Reason. Eminent domain remains a hot-button issue in Georgia, more than a decade after the post-Kelo reforms were enacted. A proposed pipeline through the eastern part of the state has been held up because eminent domain requests have been blocked by a state judge. Meanwhile, the Institute for Justice is involved in a case in Elberton, Georgia, where local officials are trying to use eminent domain to bulldoze an office building so a hotel can expand.[...]

Why Several Western States Are Watching This Important Property Rights Case

Mon, 20 Mar 2017 08:31:00 -0400

A dispute between a Wisconsin family and their local government could set an important precedent for how the federal government must compensate states when taking land. The case, Murr v. Wisconsin, goes before the U.S. Supreme Court on Monday for oral arguments. The Murr family owns two adjacent plots of land along the banks of the St. Croix River in western Wisconsin, and wants to sell one of the parcels (with an estimated value of $400,000, the family claims) to pay for maintenance on the recreational cabin that sits on the other parcel. The county government, acting under the terms of a 1975 state law, prohibited the family from selling the second parcel and declared the two parcels are effectively a single parcel—a regulatory ruling that the Murr family claims has reduced the value of their land by as much as 90 percent. (For more on the details and background of the case, check out my previous reporting here.) The whole thing seems very narrow and technical—it's almost so provincial that it makes you wonder why the Supreme Court is involved at all—but the key detail is not the fight over whether the Murr's own one 2.5 acre parcel of land or two 1.25 acre parcels of land. No, the real question here is whether the state government has to compensate them for the loss of value. Usually, this is fairly clear cut. The U.S. Constitution says governments must compensate property owners when land is taken for public purposes. In this case, though, the land wasn't necessarily taken, but rather the use of the land was significantly restricted by state regulations regarding where structures can be built relative to waterways, and by the separate decision to merge the two parcels into one without the Murr's consent. The case before the Supreme Court will deal mostly with the question of whether the simple fact of having two adjacent parcels owned by the same person can allow the government to reduce the value of those parcels without having to pay compensation—something the government would not be able to do if the two parcels had different owners. "However you come down on the question of whether there is a taking in [the Murr's] case or not, the answer shouldn't depend on the fact that the owners of one lot also happen to own the lot next door," said Ilya Somin, a professor of law at George Mason University, during a forum on the Murr case hosted Friday by the Cato Institute, a libertarian think tank. Somin has called the case "by far the most important property rights case to come before the Supreme Court this term, and probably the most important in at least two or three years, if not longer." It's the question of compensation that has attracted the interest of several states that are not directly involved in the dispute. Eight western states, led by Nevada, filed amicus briefs with the Supreme Court in support of the Murr's claim. If the state can combine the Murr's parcels of land and not have to compensate the family for the lost value, those states argue, then similar reasoning could leave states vulnerable to large-scale uncompensated encroachment by the federal government. "If regulators do not have to pay compensation to affected property owners in cases where the latter happen to possess contiguous lots, they will often have little incentive to fully consider the costs and benefits of proposed regulations, and prioritize those with the greatest likely beneficial impact," they argue. "Aggregating contiguous parcels under common ownership into a single super-parcel will undermine traditional notions of property rights, have deleterious economic consequences, and encourage the undisciplined regulation of individuals' and states' property." The states are not concerned with whether Wisconsin should have to compensate the Murr family for the red[...]

Supreme Court Will Examine Whether a Wisconsin Family Needs Government Permission to Sell Their Land

Wed, 01 Mar 2017 14:14:00 -0500

After a decade of legal wrangling over the fate of their half-century old cabin, the Murr family will take their property rights dispute from the backwoods of western Wisconsin to the marble halls of the U.S. Supreme Court. And what began as a regulatory battle over less than three acres of land has morphed into a legal case attracting interest from eight other states. The Supreme Court next month will hear oral arguments for Murr V. Wisconsin, a case that originated all the way back in 2004, when Donna Murr and her siblings tried to sell a parcel of land along the St. Croix River that the family has owned since the 1960s. They couldn't do that, they were told by St. Croix County and the state Department of Natural Resources, because the parcel was not large enough to comply with regulations regarding the distance between waterways and buildings. There's nothing built on the 1.25 acre parcel the Murrs were trying to sell, but the family own a cabin that sits on an adjacent 1.25 acre piece of land. They couldn't sell the vacant parcel without tearing down the cabin on the other parcel, they were told. Even though the two pieces of land are separate—Donna Murr says the family has paid taxes on them, separately, since buying the neighboring, vacant parcel in the 1960s as an investment—the county and state say they can combine the parcels for regulatory purposes because they have a common owner, thanks to a state law passed in 1975. "We aren't going to be allowed to sell the second parcel, unless we tore down the cabin next door. We were stunned," Murr said Tuesday on a conference call with reporters. "We couldn't believe that the government would happily take our property tax dollars for fifty years, and then deny us the basic property rights here." Since they can't sell the vacant parcel or build anything on it, its value as an investment has diminished by as much as 90 percent. Donna Murr said the property was appraised for $400,000 before the Murrs tried to sell it, but when the family asked the county to buy it from them (since no one else was allowed), they were offered a mere $40,000. Murr told the Eau Claire Leader-Telegram last year that the family has paid more than $78,000 in taxes on the property since purchasing it. Some investment. The Pacific Legal Foundation, a California-based libertarian law firm, is representing the Murr family in the case. Attorneys for PLF say they hope to strike a blow against an all-too-common problem across the country: that regulators must provide just compensation when prohibiting private property owners for using their property as they want. The Fifth Amendment requires government to compensate land owners when property is taken for a public purpose. If the Supreme Court sides with the Murr family, the case could serve to extend that principle to situations where property, for all intents and purposes, has been seized by regulators who are prohibiting the use or sale of land. "This case has broad implications, because the Murrs are far from alone in confronting this issue," says John Groen, an attorney for PLF. "The problem of bureaucrats and courts defining the parcel as a whole to include adjoining lots in common ownership presents itself throughout the country." In briefs filed with the Supreme Court in advance of oral arguments, St. Croix County defends its decision to merge the two parcels of land for regulatory purposes. The existing cabin (and any future construction on the adjacent parcel) violates rules passed in the 1975 banning construction near the river. "By allowing an additional residence that failed to meet minimum standards in an area already threatened by overcrowded development…the county's ability to prevent harmful soil erosion, avoid contamination of surface [...]

Trump, Navigable Waters, and the EPA's WOTUS Regulations

Tue, 28 Feb 2017 15:30:00 -0500

In 2015, the Environmental Protection Agency issued a new Clean Water Rule, a.k.a. Waters of the U.S. (WOTUS) rules defining the jurisdiction of the agency over rivers, lakes, creeks, estuaries, ponds, swamps, prairie potholes, irrigation ditches, and intermittent rivulets. The new rules were based on the EPA's interpretation of the provisions of the 1972 Clean Water Act that mandated that the agency devise "comprehensive progams for water pollution control" aimed at "preventing, reducing, or eliminating the pollution of the navigable waters and ground waters and improving the sanitary condition of surface and underground waters." The agency reasoned that it had authority to regulate non-navigable upstream water sources like farm ponds and intermittent streams since they could carry pollution down to navigable waters like lakes and rivers. These new rules brought nearly half of Alaska and a total area in the lower 48 states equivalent to the size of California under the Clean Water Act's jurisdiction. The upshot is that under the new more extensive regulations, ranchers, farmers, and property developers had to seek permission from the U.S. Army of Corps of Engineers to make changes that might affect minor sources of water on their land. Obtaining permits could take years and cost thousands of dollars. At least 32 states have sued to prevent the new regulations from taking effect, and the Sixth Federal Appeals Circuit Court stayed the new rules in October, 2016. At the Conservative Political Action Conference meeting last week, new EPA Administrator Scott Pruitt declared that the Obama administration's WOTUS regulation had "made puddles and dry creek beds across this country subject to the jurisdiction of Washington DC. That's going to change." The new executive order that President Trump is expected to sign today directs that EPA to reopen the rulemaking process to repeal and revise the WOTUS rules. The agency is explicitly told to use the standards set out in former Supreme Court Justice Antonin Scalia's plurality opinion in the 2006 Rapanos vs. United States case. In his opinion, Scalia declared: In sum, on its only plausible interpretation, the phrase "the waters of the United States" includes only those relatively permanent, standing or continuously flowing bodies of water "forming geographic features" that are described in ordinary parlance as "streams[,] … oceans, rivers, [and] lakes." See Webster's Second 2882. The phrase does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall. The Corps' expansive interpretation of the "the waters of the United States" is thus not "based on a permissible construction of the statute." Of course, various activist groups are alarmed at the potential rollback of EPA authority. For example, Trout Unlimited issued a statement: Gravity works cheap, and it never takes a day off. The Administration cannot stop water flowing downhill—and we all live downstream. To be effective, the Clean Water Act must be able to control pollution at its source, upstream in the headwaters and wetlands that flow downstream through communities to our major lakes, rivers, and bays. ... If Justice Scalia's direction is followed, 60 percent of U.S. streams and 20 million acres of wetlands would lose protection of the Clean Water Act; an unmitigated disaster for fish and wildlife, hunting and fishing, and clean water. In favor of Trump's new executive order American Farm Bureau Federation President Zippy Duvall declared: President Trump's executive order to ditch the Waters of the U.S. rule is a welcome relief to farmers and ranchers across the country today. The flawed WOTUS rule has proven to b[...]

The Man vs. the Pipeline

Wed, 22 Feb 2017 11:15:00 -0500

(image) If you're a fan of the Ornery Holdout Battling Eminent Domain genre of newspaper writing, you should read Anya Litvak's profile of David Rheinlander in the Pittsburgh Post-Gazette. Here's the lede:

If David Rheinlander believes that his 5.5 acres, which include woods and a modular home, are worth $10 million, then who exactly is the Rover Pipeline or the federal government, for that matter, to say otherwise?

"If they don't like it, go around me," Mr. Rheinlander said less than a week after Energy Transfer Partners, the Texas-based firm developing a massive natural gas pipeline, asked a federal court to condemn a 150-foot-wide line across his Washington County [Pennsylvania] land so it can cut down his trees as soon as possible.

Litvak goes on to describe Rheinlander's early encounters with the company's land agents ("Even during those amicable conversations, the phrase eminent domain was a frequent garnish, he recalled") and the ensuing arguments over safety, property rights, and where the best route for the pipeline would be. My knee-jerk sympathies, as always, are with the holdout. The company claims that it faces "billions of dollars of lost revenue" without the property, which to me suggests they should pay Rheinlander more than the $3,500 they're offering, but I guess they think they've found a legal workaround.

The story also gives us a glimpse of a bigger issue, a dark side of the fracking boom:

The number of eminent domain pipeline cases has risen in proportion to the pace at which pipelines are being built to accommodate the shale gas boom—which is to say, it has ballooned...

Read the whole thing here.

This Indiana Town Wants to Fine a Community Out of Existence on Behalf of Private Developers

Mon, 13 Feb 2017 12:45:00 -0500

Members of a small, low-income community in Indiana are discovering that state-level protections that make it hard for cities to seize their property may not be enough. When city leaders decide to get into bed with private developers, there are all sorts of ways for cronyism to threaten the property rights of owners. When we imagine how a city or town seizes private property from citizens in order to hand it over to developers for special projects, we often think about eminent domain. Governments can force citizens to sell them their property (often for much less than it's worth on the market). While eminent domain was supposed to be used solely for public works projects (roads, schools, et cetera), the infamous Kelo v. City of New London Supreme Court decision set a legal precedent allowing governments to use it to hand over property to private developers for big projects. Some states that objected to that decision passed new laws to restrict how eminent domain may be used within their borders. Indiana was one of them. So property rights-minded citizens might be surprised to hear that the mayor and city officials of Charlestown, Indiana, a rural community with a population of less than 8,000, are trying to arrange to hand over hundreds of homes to a private developer. He's not using eminent domain to do so. Instead, the city stands accused of deliberately finding excuses to burden the community's residents with thousands of dollars of fines that will be waived if they sell their properties to the private developer. The property-rights-defending lawyers of the Institute for Justice (you may recall their efforts to stop abuse of civil asset forfeiture) are stepping in to represent several property owners in this community and are seeking an injunction to stop the city from trying to use code violation citations to essentially force property transfers. Within Charlestown is a low-income neighborhood named Pleasant Ridge, full of working-class folks and retirees. According to the Institute for Justice, Mayor Bob Hall decided in 2014 that he wanted to get rid of the houses there and replace it with a more upscale planned community with fancier homes and retail options. But he needed to get rid of the houses (and the people within them) first. Starting in 2016, residents and property owners of Pleasant Ridge discovered Charlestown had a nasty tool to try to get rid of them. City officials started looking for any excuse to cite property owners for code violations. When you're looking at low-income neighborhoods full of working people and retirees, there are likely to be plenty. The Institute for Justice described how it played out: Beginning in the summer of 2016, the city unleashed a torrent of code enforcement targeted specifically at the Pleasant Ridge neighborhood. City officials began performing exterior inspections of properties in Pleasant Ridge and mailing citations to the owners. So far, this campaign has primarily targeted landlords who own multiple rental properties, rather than smaller landlords and owner-occupied houses. The citations state that the owner accrues penalties of $50 per violation, per day. Multiple citations are issued per property, which means that a single property will begin accumulating hundreds of dollars in fines each day. The fines can be for things as minor as a torn screen, weeds taller than eight inches or chipped paint. In many cases, the fines begin the day the citation was issued, not the day the owner received it. So owners can easily be on the hook for thousands of dollars in fines before they even receive notice, and the fines continue to accrue until the owner is able to repair the property. The city knows[...]