Volume 10: Where Theory Meets Practice

September 30–October 1, 2021

Board of Advisors and Journal Staff
Table of Contents
Seventeenth Annual Brigham-Kanner Prize Presentation Dinner Award Recipient Speech

Henry E. Smith

Each year, the Brigham-Kanner Prize is awarded to someone who has made significant contributions to our understanding of property. Prior recipients have included the nation’s leading property scholars, a Supreme Court justice, a leading practitioner, and a Peruvian economist. This year’s recipient, Henry Smith, is one of the deepest thinkers we have recognized. By that, I am referring to Henry’s ability to innovate, introducing new methods and ideas about property that have led to the emergence of a theory of property focusing on its architecture.

Whether it is his work on the relevance of an old doctrine, his explanation of the interface between contracts and property, his insights into a well-managed semi-commons, or his work on two strategies for delineating the nature and scope of property rights, Henry continues to push the boundaries of property theory in ways that reveal its complexity. Very few scholars can take a seemingly obsolete doctrine, like numerus clausus, and give it modern relevance. Very few can bring property from what critics predicted was its demise, its disintegration, to its re-emergence as a powerful system. His analysis is complex. Reading his work is not a leisurely walk in the park. But, the lessons learned are so invigorating that the careful reader will inevitably have an “aha” moment. Henry’s numerous publications include books on property, on patent, on the economics of property law, and on linguistics. He has also published many articles in the top journals, including Yale, Harvard, Columbia, Michigan, Chicago, William and Mary, and the Brigham-Kanner Property Rights Journal. A member of the American Law Institute, Henry is the Reporter for the Fourth Restatement of Property—a monumental task. Professor Smith received his AB in German studies from Harvard, an AM in German and a PhD in linguistics from Stanford, and a JD from Yale.

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Property Beyond Flatland

Henry E. Smith

Although the world of property is wonderfully complex, property theory invites diverse perspectives, and the word “property” itself is elusively protean, there is one respect in which the field of property is neither complex, nor diverse, nor protean. Property suffers from a bad case of “dichotom-itis,” and like private law generally, it is stuck in what, to borrow a term, I will call “Flatland.”1 In this Essay I want to help us escape from Flatland.

To do so, our field needs to incorporate modern notions of complex systems much more thoroughly than it now does. One theme I see in property theory and increasingly in property practice is an exces-sive reductionism. Let me emphasize the “excessive”: the problem is not reductionism per see. As limited beings, we are not capable of dealing with all of life’s complexity all of the time. And yet too much reductionism or reductionism of the wrong kind can be seriously limiting.

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Can an Apartment Building Be a Nuisance? An Essay For Henry Smith

Robert C. Ellickson

In 1926, Justice Sutherland asserted in Village of Euclid v. Ambler Realty Co. that, in a single-family neighborhood, “apartment houses . . . come very near to being nuisances.” The legal issue remains alive. In 2014, a jury in Houston, Texas, awarded damages to homeowners challenging a proposed high-rise condominium tower near Rice University. The issue serves to illuminate the views of Henry Smith, the much-deserved recipient of the Brigham-Kanner Property Rights Prize. In his writings, Henry has addressed many topics, nuisance law among them.

As it happens, my first major article also dealt with nuisance law. There I compared that body of precedent to other systems of land use control, especially municipal zoning. The zoning ordinances of the 1920s, in my view, addressed a genuine problem. A landowner’s decision on the use of urban land typically affects the value of adja-cent properties. Although private bargaining may internalize some of these externalities, in many cases it will fail to do so. Zoning regulations, if wisely crafted, therefore can raise aggregate property values. A zoning government, however, also can inflict damage on the urban landscape. By the 1930s, local governments increasingly had begun to use zoning as an exclusionary device. Exclusionary zoning segregates urban neighborhoods by social class, and raises the cost of housing. Economists assert that municipal zoning, as actually practiced today in the United States, massively damages the national economy. This Essay reveals my disagreement with Henry about how the Texas courts should have decided the recent Houston nuisance case. My pessimism about how local governments actually zone cities may underlie our disagreement.

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Modularity, Modernist Property, and the Modern Architecture of Property

Carol M. Rose

Henry Smith’s theory of property revolves around the human need for informational shortcuts in dealing with the claims of others. Property law treats property as things, or as he often says, modules—objects whose boundaries people may see and understand as belonging to themselves or others, without having to know the details of their interior interrelationships. Such “things” are protected by exclusion rules with some more fine-tuned governance rules for bound-ary issues.

Smith’s theory is a welcome relief from the unproductive theory of property as “bundles of sticks,” but it does raise some questions. Some are these: can property “modules” really be combined like LEGOs, or are some combinations messier, as in unsuccessful corporate take-overs? What, actually, is a “thing”—is it something natural, or is it (also) something like a farm or a condominium, an artifact of property law itself? How stable are the relationships between exclusion rules and governance rules? Can the information-economizing theory of property take more lessons from law and economics? Finally, aside from economizing on information, should a theory of property also leverage other purposes of property, such as the enhancement of effort and wealth, autonomy, and democratic self-government?

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Shelter, Mobility, and the Voucher Program

Ezra Rosser

What is to be done about the poor and about poor neighborhoods? When it comes to housing policy, the current hope is that the Housing Choice Voucher Program (formerly the Section 8 Voucher Program) can provide an—or ambitiously—the answer to this perennial societal question. By piggybacking on the private rental market, the voucher program supposedly has numerous advantages over traditional, project-based, public housing. Not only is it less costly to house poor people in privately owned units compared to the cost of con-structing and maintaining public housing, but the voucher program also offers the possibility of deconcentrating the poor. Because vouchers can theoretically be placed anywhere, the poor can use them to move out of impoverished areas and into higher opportunity neighborhoods. At least in theory, vouchers thus offer a two-for-one punch: a more efficient way of providing housing support and a way to offer families a chance at economic mobility. A new book by Professor Eva Rosen offers a more nuanced appraisal of the ability of vouchers and voucher holders to live up to the multiple expectations placed upon them. The Voucher Promise: “Section 8” and the Fate of an American Neighborhood pulls back the curtain on the voucher program, letting readers into the lives of poor families and landlords whose lives are shaped by the program. “Section 8” remains the popular name for the program in much the same way that people still refer to “food stamps” instead of the Supplemental Nutrition Assistance Program. As Rosen shows, even though the voucher program may fail to deliver on all of the mobility expectations associated with it, vouchers considerably improve the lives of recipients. Even as the stature of economic mobility within poverty law solidifies and the consequent need to include mobility appraisal in the evaluation of anti-poverty programs evolves, scholars and policymakers should not lose sight of welfare gains associated with programs, even if the same programs cannot support the weight of mobility-tied expectations.

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Property Rights and the Modern Resurgence of Rent Control

James Burling

In a 1990 survey of professional economists, 93% agreed with the statement that “a ceiling on rents reduces the quantity and quality of housing availability.” In a more recent survey of 41 economists, only 2% agreed with the statement: “Local ordinances that limit rent increases for some rental housing units, such as in New York and San Francisco, have had a positive impact over the past three decades on the amount and quality of broadly affordable rental housing in cities that have used them.” And yet, in a 2018 survey of Californians asked to identify why housing in California is unaffordable, 28%—more than any other answer—responded that it was the lack of rent control. It is not hard to understand why. Renters naturally think their rents are too high when they are too high. And in a world where nuance is often overshadowed by one-dimensional populist answers to complex questions, rent control is an obvious answer to high rents.

But just as civilian casualties can be collateral damage of wartime bombing, so too the loss of housing stock can be a casualty of rent control. Indeed, as economist Assar Lindbeck drolly noted, “In many cases rent control appears to be the most efficient technique so far known for destroying cities—except for bombing.” Not only can rent control take away the incentives for developers to build new apartments that might be subject to rent control, if the rent control is draconian enough it can destroy the ability of landlords to maintain their apartments, leading to decay, abandonment, and eventual destruction. In a 1981 book by the Fraser Institute, there is a series of 15 black and white photographs of post-apocalyptic urban landscapes with the caption: Bomb Damage or Rent Control? One must go to the index for the answer because it is otherwise impossible to tell. Comparing a block in the South Bronx to one in Nagasaki or Hiroshima may seem fatuous, but photographs (at least back then) don’t lie: rent control can be terribly destructive.

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Solving for Homelessness

Wendy L. Kellington

Homeless people and homeless encampments are everywhere. The housed look on in horror at the depressing symbols of homelessness—tents on sidewalks, people in wheelchairs talking to no one in particular, the filthy plastic bucket in lieu of a toilet behind a wind-blown decayed tarp; the person who simply relieves themselves on a side-walk; the person on the street corner screaming epithets at unseen enemies; feral children wandering about like zombies. No one deems the state of affairs tolerable; yet homelessness stubbornly persists de-spite billions of dollars and countless person-hours devoted to its end.

The premise of this Paper is twofold, that: (1) homelessness must end, and (2) it is a problem too big for the existing patchwork of state and local initiatives to solve. Rather, the federal government must step up to establish a coherent policy paradigm and associated pro-gramming that solves it. 

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Hurdles to Just Compensation

Jeremy P. Hopkins

Some of the worst atrocities in world history have come when the masses, or at least a controlling faction, are blinded by what they perceive to be the greater good. “Experience should teach us to be most on our guard to protect liberty when the government’s purposes are beneficent.” Far too often, the pursuit of the perceived collective good stamps out the fundamental rights of the individuals standing in its path. The rights of the individual become disposable. This phenomenon is all too real for property owners in the path of eminent domain.

While the Constitution memorializes the fundamental right to private property, and specifically just compensation, the collective pursuit of public projects has trampled the rights of individual property owners. It is for this reason alone that Americans now live under a Constitution that guarantees just compensation but laws that guarantee otherwise. 

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Implied Preemption in the Regulation of Land

David L. Callies
Ellen R. Ashford

The subject of preemption by one unit of government over another is a fundamental issue precedent to the exercise of regulatory authority by state and local government. While preemption—in particular state and local preemption by the federal government—has been the subject of considerable discussion in the literature, there has not been much recent discussion of preemption in the context of real property. The subject is treated more or less the same by most courts, whether the case involves federal preemption of state (and occasionally local) government law, or whether it involves state preemption of local government law. The only critical difference—and it is critical—with respect to federal preemption is the need to carefully evaluate and analyze the federal government’s authority to exercise the allegedly preemptive statutory or regulatory authority in the first place, since the federal government is one of enumerated powers with virtually no independent regulatory authority beyond that conveyed by an admittedly generous interpretation of the U.S. Constitution’s Commerce Clause. The 11th Amendment also forbids the federal government from commanding states to regulate its citizens under the so-called anticommandeering doctrine. Both of these principles are fully and clearly discussed and articulated in Murphy v. National Collegiate Athletic Association. Since states have all the powers not granted to the federal government, reserved specifically to the states by the 10th Amendment, the only needful fundamental preliminary investigation with respect to state preemption of local government authority is the extent of limitations in the relevant state constitution, since state constitutions are limits, not grants, on otherwise plenary authority to regulate and govern.

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"All Temperate and Civilized Governments"; A Brief History of Just Compensation in the Nineteenth Century

James W. Ely Jr.

In 1816, Chancellor James Kent of New York, in the landmark case of Gardner v. Trustees of Village of Newburgh, insisted that to sustain the exercise of the power of eminent domain “a fair compensation must, in all cases, be previously made to the individuals affected.” This limitation on legislative authority, the eminent jurist explained, “is adopted by all temperate and civilized governments from a deep and universal sense of its justice.” Hence, compensation was required for diversion of a water stream from the claimant’s land, although at that date the New York Constitution contained no such express mandate. As we shall see, other courts in the nineteenth century echoed Kent’s views. Taking Kent’s confident assertion as a starting point, these remarks explore the origins of the just compensation norm, the rationale behind the compensation requirement, and early attempts to define the contours of such compensation.

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"Equitable Compensation" as "Just Compensation" for Takings

Brian Angelo Lee

The Fifth Amendment’s requirement that the government pay “just compensation” to owners of taken property is typically assumed to mean “full” compensation, equivalent to the taken property’s fair market value. In this symposium contribution to the Brigham-Kanner Property Rights Journal, I explore an often overlooked alternative understanding of “just compensation” for takings, one freed from automatic equation with full, fair-market-value compensation. Rooted in traditional equity, this “equitable compensation” alternative has significant historical roots, starting with the Fifth Amendment’s drafters’ striking choice not to follow the Northwest Ordinance of 1787’s requirement of “full” compensation, and running through a line of cases and commentary that has emphasized takings compensation’s equitable nature. I argue that recognizing takings compensation’s equitable dimension—particularly equity’s attention to reciprocal obligations—can help takings law more naturally respond to thorny difficulties caused by specific rigidities in takings doctrine, rigidities that create challenges when takings doctrine is forced to address situations that differ from core cases of eminent domain. Attending to the relative weights of parties’ reciprocal duties, and equitably adjusting compensation in response, can help resolve such cases more plausibly, including takings for private projects with public benefits (as in Kelo v. New London) and regulatory takings. 

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A Practitioner's Perspective on How Best to Avoid the Risk of Unjust Compensation

Andrew Prince Brigham
Lindsey Brigham Knott

The article below was written following the 17th Annual Brigham-Kanner Property Rights Conference, held virtually over a Zoom conference by host William & Mary Law School, on October 2, 2020. Four panelists presented on the subject “The Risk of Unjust Compensation”: Professor James W. Ely Jr., Professor Brian Angelo Lee, Andrew Prince Brigham, Esq., and Jonathan D. Brightbill, Esq.

The purpose of this Article is to bring the multifaceted insights of the academy, the condemnee, and the condemnor into focus on a theme raised in all four of the panel’s presentations: the significance attached to the measure of compensation when property is taken under the eminent domain power. This, the second of constitutional protections, is seldom commented upon and is more typically assumed to somehow materialize of its own accord when private property is taken by a public or quasi-public condemning authority.

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Support Grounded in Litigation Experience for Using the Fair Market Value Measure of Just Compensation in Cases Involving the United States

Jonathan Brightbill
Peter McVeigh

The Environment and Natural Resources Division of the U.S. Department of Justice (“ENRD”) files condemnation actions on behalf of the United States. It also defends the United States in inverse con-demnation cases. The United States Constitution requires the United States to pay “just compensation” when it acquires (or “takes”) real property from its owners. The United States has this obligation, both when exercising the prospective power of eminent domain and when a “taking” is adjudicated to have occurred by an inverse condemnation.

Under Supreme Court precedent, the measure of just compensation is the “fair market value” of the taken property on the date of the taking. “Fair market value” means the amount that a willing buyer would have paid on the date of taking to purchase the property from a willing seller on the open market. In its litigation, ENRD’s attorneys are committed to seeing the United States meet its constitutional obligation to pay just compensation. The Division’s experience is that the fair market value is the most objective of possible measures of just compensation for a number of reasons. Other possible measures would be more difficult, time-consuming, and expensive to apply. Subjective measures are more susceptible to manipulation and can result in excessive, and thus unjust, compensation. While ENRD is often successful in defeating such claims, even litigation under the well-established fair market value measure can result in excessive theories and claims of compensation. Some are discussed further below. Departure from the venerable fair market value stan-dard is likely to increase the risk of overcompensation and may result in less overall social welfare.

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