The Volokh Conspiracy

Tomorrow the Supreme Court will hear oral argument in a potentially important takings case, Koontz v. St. Johns River Water Management District. In this case, a landowner is challenging the state’s refusal to grant a permit to develop wetlands unless the landowner agreed to various conditions, including the performance of off-site mitigation. When the landowner refused, the agency refused to grant the permit and the landowner sued, claiming that the conditions the government sought to impose violated the rough proportionality requirement of Nollan and Dolan. Although he prevailed in the lower courts, the Florida Supreme Court reversed, concluding that (among other things) that the rough proportionality requirement did not apply to off-site mitigation requirements or to situations where a permit is never issued. Given the issues involved, Koontz could have a major effect on environmental mitigation requirements and land-use regulation at all levels of government.

Ilya previewed Koontz and Greenwire covered the case when the Court granted cert. For more on the case, here are comments by Richard Epstein and — from a quite different perspective — Richard Frank. One thing all would agree on, however, is that this could be a very important case — easily the most important property rights case heard by the Roberts Court to date.

UPDATE: The Pacific Legal Foundation represents the landowner in this case, and there are quiet a few posts on Koontz on the PLF blog. (PLF also represented the Sacketts in Sackett v. EPA from last term.)

On the other side of the case, Doug Kendall of the Constitutional Accountability Center comments here. CAC was formerly know as Community rights Counsel, an organization that reliably opposed regulatory takings claims in federal courts.

This Thursday at 5 PM, I will be speaking on Kelo v. City of New London and post-Kelo eminent domain reform at South Texas College of Law in Houston. The talk will be held in the Emile Slohm conference roomon the 6th Floor, and is sponsored by the South Texas Federalist Society.

I will will cover both Kelo itself, and the massive political and judicial reaction it has generated. South Texas property professor Josh Blackman, who is also a prominent legal blogger, will provide commentary.

We recently filed an amicus brief urging the Supreme Court to hear Ilagan v. Ungacta, an important property rights case on the Public Use Clause of the Fifth Amendment. I wrote the brief on behalf of the National Federation of Independent Business Small Business Legal Center, twelve other organizations (including the Cato Institute, the Becket Fund for Religious Liberty, the Owners’ Counsel of America – a nationwide organization of eminent domain lawyers, and the American Forest Resource Council), and several prominent constitutional law and property scholars, including co-bloggers Randy Barnett and Todd Zywicki.

Ilagan v. Ungacta is a fairly egregious case where land was condemned for the purpose of benefiting a powerful private party, in this case the then-mayor of Agana, Guam, and his family (the new owners of the condemned property). In Kelo v. City of New London, one of the most widely opposed decisions in Supreme Court history, the Court ruled that the Public Use Clause of the Fifth Amendment allows condemnations for virtually any “public purpose,” including transferring property from one private owner to another in hopes of stimulating greater “economic development.” But the Court also noted that government may not “take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit.” Unfortunately, neither Kelo nor other Supreme Court decisions have made clear what it means for a taking to be “pretextual.”

As I explain in the brief (pp. 4-13), lower federal courts and state supreme courts have come up with at least five different approaches to deciding what counts as a pretextual taking. Some courts emphasize the motives of the condemning authority, some focus on the distribution of benefits from the taking, and some on the extent and quality of the planning process behind the taking. The Third Circuit has emphasized the presence or absence of a private beneficiary of the condemnation whose identity was known in advance. Finally, some courts – including the Guam Supreme Court in this case – define pretext so narrowly as to permit even the most egregious favoritism.

Ilagan is a great case for the Court to clarify the meaning of pretext because it includes all four possible indicators of pretext identified by various lower court decisions: dubious motives, a highly skewed distribution of benefits, lack of careful planning, and a major private beneficiary whose identity was obvious in advance of the taking.

Because the official rationale for this taking, like the one in Kelo, is the promotion of “economic development,” this case is also a good opportunity for the Court to consider overruling Kelo. As the brief outlines (pp. 21-25), the case for overruling Kelo easily qualifies under the Court’s traditional standards for overruling a constitutional decision: Among other things, the ruling was based on poor reasoning, it has been widely criticized, and its recent nature ensures that it has not yet created much in the way of reliance interests. Most strikingly, the Court should reconsider Kelo because retired Justice John Paul Stevens, the author of the Kelo majority opinion, has publicly admitted that his reasoning was based in part on what he calls an “embarrassing to admit” mistake. Here is the relevant passage from the brief:

Even Justice John Paul Stevens, author of the Court’s opinion, has admitted that its reasoning was based in part on an “embarrassing” error: the assumption that a series of late nineteenth and early twentieth century “substantive due process” Supreme Court decisions applying a highly deferential approach to state government takings were actually decided under the Takings Clause of the Fifth Amendment. John Paul Stevens, Address at University of Alabama School of Law, Albritton Lecture (Nov. 16, 2011), 14-18.... These cases were relied on by the Court as key precedents supporting the proposition that the outcome in Kelo was dictated by “more than a century” of precedent. Kelo, 545 U.S. at 483.... An “embarrassing” error in reasoning—acknowledged by the author of the Court’s opinion—provides strong justification for the Court to at least consider overruling Kelo.

I discussed Stevens’ mistake and its significance in greater detail in this article (pp. 241-44).

Justice Stevens himself continues to believe that Kelo was rightly decided, but only on the basis of the radical and historically inaccurate claim that the Public Use Clause imposes no constraints on government’s power to take property. Both Kelo itself and decades of other precedents go against that view.

I don’t claim that this error by itself proves that Kelo should be overruled. But its exposure, combined with other factors, amounts to a strong case for the Court to at least reconsider the issue.

Space policy expert Rand Simberg has an interesting article in the New Atlantis on the need for private property rights in space:

Space contains valuable resources. These provide a compelling reason for entrepreneurs, investors, and governments to pursue space exploration and settlement. Asteroids are known to be rich in valuable elements like neodymium, scandium, yttrium, iridium, platinum, and palladium, most of which are rare on Earth. Because of the high price that these minerals command, harvesting them from space could possibly justify even very costly mining expeditions....

Despite the progress in technology, and the appeal of valuable resources, space settlement has been hampered by the lack of a clearly defined legal regime for recognizing property rights in space under current U.S. and international law. There is in fact some slight internationally recognized legal precedent for retaining ownership of resources mined in space, as lunar samples returned to Earth on both U.S. and Soviet missions (the latter robotically) have been exchanged for other tokens of value. But actually owning the portion of the celestial body from which the resources are harvested — as in a traditional mining claim — is more problematic. Without legally recognized rights to buy, own, and sell titled property, it is difficult if not impossible to raise capital to develop land or extract the resources it holds. Property rights have long been considered one of the pillars of prosperity in the modern world, and their absence in space — due to the contingencies of the history of international law during the early space age — partly explains why we have not yet developed that final frontier.

I briefly advanced a similar argument in this 2007 post, where I also noted that former astronaut Buzz Aldrin, the second man to walk on the Moon, is a longtime advocate of private property in space.

Today, the Supreme Court issued a unanimous decision in Arkansas Game and Fish Commission v. United States. The case involved a claim by the Arkansas Game and Fish Commission that the federal government’s repeated deliberate flooding of its property between 1993 and 2000 constituted a taking requiring compensation under the Fifth Amendment, which mandates that the government pay “just compensation” for takings. The flooding caused extensive damage to forest land owned by the Commission.

Today’s opinion by Justice Ruth Bader Ginsburg rules that temporary flooding can qualify as a taking at least sometimes, but tells us very little about how to determine whether a given case of flooding qualifies as a taking or not:

We rule today, simply and only, that government-induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection. When regulation or temporary physical invasion by government interferes with private property, our decisions recognize, time is indeed a factor in determining the existence... of a compensable taking....

Also relevant to the takings inquiry is the degree to which the invasion is intended or is the foreseeable result of authorized government action.... So, too, are the character of the land at issue and the owner’s “reasonable investment-backed expectations” regarding the land’s use.... Severity of the interference figures in the calculus as well.

So far as it goes, I think the Court’s decision is clearly correct. For reasons I discussed here, there is no good reason to hold that temporary flooding can never count as a taking. This is especially true if the flooding was deliberate and inflicted permanent damage on the property owner’s land. Temporary physical invasions qualify as takings in many other contexts (e.g. – overflights by aircraft), and there is nothing special about flooding that should lead the Court to create a categorical exception. To the contrary, allowing the government to temporarily flood private property without paying any compensation whatsoever would severely undermine the purpose of the Just Compensation Clause, which is, as a 1960 decision puts it, to “bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”

Unfortunately, the Court gives very little guidance on how to determine whether a given case of flooding is a taking or not. The opinion lists several factors that might be relevant, but does not explain how many need to be present before a taking can be said to have occurred, or what to do if some factors cut one way and some the other. It also says nothing about how much deference, if any, is due to the government in such cases. The Court does not even address the federal government’s extremely dubious argument that damage inflicted by flooding on downstream owners is categorically excluded from qualifying as a taking, even though the justices expressed great skepticism about this claim at the oral argument. These and other issues will have to be dealt with by the lower court on remand.

I suspect that the justices bought unity at the expense of clarity here. In the meantime, it seems clear that Arkansas Game and Fish Commission is going to result in further litigation in the lower courts, as property owners and government agencies advance competing interpretations of the Court’s vague standards for determing whether a temporary flood qualifies as a taking or not.

That said, the Court did take an important step in decisively rejecting the federal government’s extreme position that temporary flooding can never be a taking. The case is therefore joins Sackett v. EPA as a rare unanimous victory for property rights in the Supreme Court.

UPDATE: In this post, I explained why the Court is applying the Just Compensation Clause to this case despite the fact that it involves the flooding of government-owned land, while the text of the Fifth Amendment specifies that it applies only to “private property.” Under longstanding current Supreme Court precedent, the Takings Clause applies to both private and state-owned land. I have some doubts about the correctness of those decisions, but the Court is unlikely to overrule them anytime soon.

UPDATE #2: Brian Hodges of the Pacific Legal Foundation comments on this post here:

Professor Ilya Somin.... praised today’s U.S. Supreme Court decision in Arkansas Game & Fish Commission v. United States as “a rare unanimous victory for property rights” and “an important step in rejecting the federal government’s extreme position that temporary flooding can never be a taking....”

Professor Somin highlights, however, a couple a paragraphs toward the end of the decision that injected unnecessary confusion into an otherwise clear opinion....

While I agree that the language is unclear, I am not so sure that the quoted passage will cause too much confusion in future litigation. The passage lists, without differentiation, various tests, developed over the years, to determine regulatory and/or physical takings. For example, the Court recites the “intent or foreseeability” and “character of the invasion” tests from Ridge Line, Inc. v. United States (2003) and Portsmouth Harbor Land & Hotel v. United States (1922)—both are tests that have never been applied to regulatory takings....

Although some may be tempted to argue that the Court created a chimera from blended regulatory and physical takings tests, the Court did not intend to do so. Instead, the Court stated that its decision was narrow, “We rule today, simply and only, that government induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection.” And elsewhere, in Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (2002), the Court advised that it is “inappropriate to treat cases involving physical takings as controlling precedents for the evaluation of a claim that there has been a ‘regulatory taking’ and vice versa.” The upshot being that the tests that control physical invasion takings still control physical takings cases, and the tests that control regulatory takings still only apply in regulatory takings cases.

I continue to believe that the opinion is clear in rejecting the government’s extreme claim that temporary flooding can never be a taking, but unclear as to the standards that determine when temporary flooding is a taking. As Hodges notes, the Court lists a grab bag of relevant factors drawn from both regulatory and physical takings cases. So it is by no mean clear which set of precedents applies here. Of course one can argue that the language listing possible relevant factors is just dictum and that the sole holding is, as the Court puts it, “only... that government induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection.” But if the list of factors is just dictum, that makes the opinion less clear, not more, as lower courts would have even less guidance on the question of how to figure out whether a given case of temporary flooding qualifies as a taking or not.

UPDATE: Robert H. Thomas of the Inverse Condemnation blog rounds up other reactions to the decision here.

A few days ago, I blogged about a Chinese homeowner who refused to give up his house to a local government that sought to force him out in order to build a road on the site. It now appears that he has agreed to sell the house for the price offered by the government, which is likely far below the true value of the property:

A five-story home that had been left as the only house in the middle of a highway was demolished Friday after becoming a worldwide sensation and the latest symbol of the frequent resistance by Chinese homeowners who are forced to make way for massive infrastructure projects. The house was demolished Saturday after the owners, a duck farmer and his wife, agreed to accept the $41,000 compensation, according to the Associated Press. The owner had previously said he had spent $95,000 to complete the house.

In China, homes left standing amid a big development are known as “nail houses” because they’re difficult to remove, points out Xinhua, noting that this one had been dubbed the toughest of all nail houses. The owner refused to move for more than a year. It’s unclear why the relocation offer was accepted now...

It is difficult to say whether the sale was truly “voluntary” or whether he yielded to pressure tactics. Regardless, the controversy over the Chinese government’s forcible displacement of millions of people for development projects – often with little or no compensation – is likely to continue.

The Washington Post reports that Congress and the president are considering abolishing the mortgage interest deduction as part of a deal to avoid the “fiscal cliff”:

Of all the deductions woven into the sprawling U.S. tax code, few have been more fiercely guarded than the enormous tax break that lets homeowners deduct the interest they pay on their mortgages.

But as Congress and the White House negotiate the first major rewrite of tax laws in decades, changing the generations-old mortgage-interest deduction — which costs the government roughly $100 billion a year — has gone from far-off possibility to part of the conversation....

Current law allows homeowners to deduct the interest paid on mortgage balances up to $1 million, including on second homes, as well as on $100,000 worth of home-equity loans. The deduction overwhelmingly benefits wealthier families, partly because they tend to have larger mortgages and pay more interest, and partly because most low- and middle-income Americans do not itemize deductions on their tax returns.

Most economists and property law scholars have long been critical of the deduction for reasons I summarized here. The deduction incentivizes overinvestment in land as opposed to other parts of the economy, and it skews people’s decisions towards homeownership and away from renting. Although homeownership has some benefits, it also has significant costs. On balance, government should be neutral between owning and renting, not try to favor one over the other.

As the Post points out, the deduction also overwhelmingly benefits the wealthy. The story quotes USC law professor Edward Kleinbard, as follows:

Edward Kleinbard, a tax expert and law professor at the University of Southern California, said the mortgage-interest deduction represents the kind of government “extravagance” that the country no longer can justify, given its fiscal troubles.

“We simply cannot afford wasteful government subsidy programs anymore, and this is one of the most important examples of that,” Kleinbard said. “It’s very much a subsidy to those Americans who need it least.”

I agree. However, as both the Post and Mark Edwards at PropertyProf Blog emphasize, the deduction still enjoys strong political support. Mortgage lenders and the real estate industry are among its powerful interest group backers, and it still enjoys considerable popularity with the general public, though many are willing to reduce it for higher-income homebuyers.

The deduction’s popularity and strong support from powerful interest groups have enabled it to survive previous attacks by would-be budget-cutters, not to mention years of criticism from scholars. It’s far from certain that its luck will run out this time. The sacred cow might yet wriggle its way off the fiscal cliff chopping block. But the severity of the fiscal crisis does make it more vulnerable than it was in the past.

In my view, the deduction should be abolished completely, not just for the wealthy. If we want to lower the tax burden for the poor or the lower-middle class, the best way to do so is to reduce their income or payroll tax rates across the board, not give them a deduction that only applies if they buy a particular product, thereby skewing their incentives.

It may be defensible to argue that abolition should be phased in gradually over a period of several years. That way, we can smooth the transition for homeowners who relied on the deduction when they took out mortgages they are currently still repaying. While the government is not legally obligated to protect such reliance interests, there may be a policy case for doing so. The word “may” is a crucial qualification here. I’m far from certain about whether and to what extent abolition should be phased in gradually as opposed to immediately. Regardless the reliance argument does not apply to new purchases that occur after the deduction has been abolished. For them, abolition can be immediate.

UPDATE: The Promethefeu blog criticizes my tentative suggestion that we do a gradual phaseout of the mortgage interest deduction for current mortgage-holders:

This is a mistake for several reasons. First, current homeowners do have a reliance interest in home-buyers benefiting from the deduction. If home-buyers can expect to get the deduction, they will be willing and able to pay more for houses. This is something that homeowners relied upon when they bought their houses. If the deduction is abolished, this could mean a significant hit to home values and whatever plans homeowners may have made relying upon that home value could be disrupted.

Second, and I think much more importantly, this would create a harmful discontinuity in the real estate market: If you currently have a mortgage, you would have an incentive to stay in your current house for longer than optimal in order to avoid giving up the deduction. Otherwise, you would have to settle for a cheaper place/dig into your capital/pay a higher mortgage.

On the first point, I agree that current homeowners may have some reliance interest in the effect of the mortgage interest deduction on the resale price of their houses. However, the reliance interest here is much smaller than that embedded in their payment plans for their current mortgage. Home prices fluctuate for a wide range of reasons, and we can reasonably expect people who purchase real estate to be aware of that. The diminution caused by eliminating the mortgage interest deduction is just one of many factors that could cause a substantial change in resale price.

The second point is valid. However, it is mitigated by the fact that I don’t propose to keep the deduction in place for current mortgages permanently. I would merely phase in its abolition over a period of a few years. That should greatly reduce the potential distortion in the real estate market.

That said, as I noted in my original post, I’m far from certain that a phased abolition of the deduction really is preferable to an immediate. It’s possible that we should slaughter the sacred cow all at once, rather than opt for a slow, lingering death.

This recent Chinese case has attracted a lot of attention in both China and the West, and is drawing comparisons to the famous US takings case of of Kelo v. City of New London. The Huffington Post describes the facts as follows:

In the middle of an eastern Chinese city’s new main road, rising incongruously from a huge circle in the freshly laid pavement, is a five-story row house with ragged edges. This is the home of the duck farmer who said “no.”

Luo Baogen and his wife are the lone holdouts from a neighborhood that was demolished to make way for the main thoroughfare heading to a newly built railway station on the outskirts of the city of Wenling in Zhejiang province.

Dramatic images of Luo’s home have circulated widely online in China this week, becoming the latest symbol of resistance in the frequent standoffs between Chinese homeowners and local officials accused of offering too little compensation to vacate neighborhoods for major redevelopment projects.

There’s even a name for the buildings that remain standing as their owners resist development. They are called “nail houses” because the homeowners refuse to be hammered down....

Xiayangzhang village chief Chen Xuecai said in a telephone interview Friday that city planners decided that Luo’s village of 1,600 had to be moved for a new business district anchored by the train station. Chen said most families agreed to government-offered compensation in 2007.

Luo, 67, and a handful of neighbors in other parts of the new district are holding out for more.

“We want a new house on a two-unit lot with simple interior decoration,” Luo told local reporters Thursday in video footage forwarded to The Associated Press.

Luo had just completed his house at a cost of about 600,000 yuan ($95,000) when the government first approached him with their standard offer of 220,000 ($35,000) to move out – which he refused, Chen said. The offer has since gone up to 260,000 yuan ($41,000).

Although in this case, and some others, Chinese authorities have hesitated to forcibly remove resisting property owners, in the past the Chinese government has forcibly displaced millions of people in order to make way for construction, often paying them little or no compensation. Some 1.25 million people were expelled from their homes in order to “beautify” Beijing in preparation for the 2008 Olympics.

Overall, the state of property rights protection in China is significantly worse than in the post-Kelo United States, though our performance is very far from ideal.

To try to get more insight into the “nail house” case, I contacted leading Taiwanese takings scholar Professor Yun-chien Chang of the Academia Sinica in Taipei. Chang has written extensively on eminent domain and property law in the United States, China, and Taiwan. He e-mailed the following (reprinted with his permission):

Under-compensation is by all evidence very common. On the other hand, nail houses like these are not unprecedented.
I am almost sure that the local government has the power to tear down the nail houses, but they also do not want to make a scene... The Shengzhen SEZ government has the power to tear down the “small title” properties, but they choose not to, for various reasons...

Perhaps, as [economist] Steven NS Cheung argued, juridical competition at the county/city level (in, e.g., attracting foreign direct investment) is throat-cutting. So local government considers it bad PR to blatantly use its eminent domain power. After all, nail house owners at some points will bow out “voluntarily.”

The Huffington Post story quoted above notes that Chinese authorities are not usually shy about using pressure tactics to facilitate “voluntary” capitulation by owners:

What is unusual in Luo’s case is that his house has been allowed to stand for so long. It is common for local authorities in China to take extreme measures, such as cutting off utilities or moving in to demolish when residents are out for the day.

That said, it seems possible that Chinese officials, like many American ones, hesitate to use blatant coercion in highly publicized cases like this one. That would make for bad PR, as Chang puts it. In run of the mill cases where displacing homeowners doesn’t attract much media scrutiny, they are often far more ruthless.

Finally, it’s worth noting that one potentially significant difference between this case and Kelo is that Luo is being displaced for the purpose of building a publicly owned road, whereas Susette Kelo was forced out to make way for a privately owned development project that never actually built anything. For reasons I discussed in this article, there is a stronger economic rationale for using eminent domain for public roads than for private development projects. But that doesn’t mean that all takings for roads are necessarily justified, and it certainly does not excuse the Chinese government’s practice of egregiously undercompensating displaced property owners.

Today is Thanksgiving, and there is much to be thankful for. Not least on the list is the institution of private property, without which the Pilgrims might not have survived, and we would not have this holiday. Economist Benjamin Powell recounts the story here:

Many people believe that after suffering through a severe winter, the Pilgrims’ food shortages were resolved the following spring when the Native Americans taught them to plant corn and a Thanksgiving celebration resulted. In fact, the pilgrims continued to face chronic food shortages for three years until the harvest of 1623. Bad weather or lack of farming knowledge did not cause the pilgrims’ shortages. Bad economic incentives did.

In 1620 Plymouth Plantation was founded with a system of communal property rights. Food and supplies were held in common and then distributed based on equality and need as determined by Plantation officials. People received the same rations whether or not they contributed to producing the food, and residents were forbidden from producing their own food. Governor William Bradford, in his 1647 history, Of Plymouth Plantation, wrote that this system was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. The problem was that young men, that were most able and fit for labour, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. Because of the poor incentives, little food was produced.

Faced with potential starvation in the spring of 1623, the colony decided to implement a new economic system. Every family was assigned a private parcel of land. They could then keep all they grew for themselves, but now they alone were responsible for feeding themselves. While not a complete private property system, the move away from communal ownership had dramatic results.

This change, Bradford wrote, had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. Giving people economic incentives changed their behavior. Once the new system of property rights was in place, the women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability.

Once the Pilgrims in the Plymouth Plantation abandoned their communal economic system and adopted one with greater individual property rights, they never again faced the starvation and food shortages of the first three years. It was only after allowing greater property rights that they could feast without worrying that famine was just around the corner.

Tom Bethell gave a more detailed account in this 1999 article.

In my 2010 Thanksgiving post on this subject, I noted that Thanksgiving is also a good time to disabuse ourselves of the longstanding myth that Native Americans had no private property rights and opposed the concept when it was supposedly first introduced by whites. In that post, I also explained why the lessons of the Pilgrims’ experience with private and communal property are in no way negated by the fact that the Plymouth Plantation was a corporation.

Happy Thanksgiving to all!!

Retired baseball All Star John Olerud has persuaded the Clyde Hill, Washington Board of Adjustment to force his neighbors to chop down two valuable trees on their property so that he will have a better view of the Seattle skyline:

Nine years after he won his third Gold Glove as a Seattle Mariners first baseman, John Olerud has won a victory in a different venue.

The Clyde Hill Board of Adjustment ruled Wednesday night that Olerud’s neighbor to the west must remove two trees because they unreasonably obstruct Olerud’s view of Lake Washington and the Seattle skyline.

The board’s 3-2 order is the first time the city has told a resident to cut down a tree under a 1991 “view obstruction and tree removal” ordinance...

An appraiser hired by John and Kelly Olerud said their $4 million home would be worth $255,000 more if the rare Chinese pine and the Colorado spruce across the street were cut down and replaced with smaller plants. The Chinese pine’s value is estimated at more than $18,000.

Removing the trees would widen the west-facing view from his family room by 65 percent, Olerud told the Board of Adjustment, giving his house the same amazing view of Seattle’s skyline that’s visible from nearby Northeast 20th Street....

“We love the trees, they are valuable and we don’t want to remove any of them,” Baker said. He said the Oleruds “have a fabulous property and, no matter how valuable it is, the ordinance doesn’t promise them an unobstructed view. It doesn’t entitle them to more than they paid for [when they bought their house, at which time the Bakers' trees were already there]....”

Removing the trees wouldn’t unreasonably decrease the Bakers’ enjoyment of their property, the board said. The view ordinance says an owner’s enjoyment of a tree must be determined “by an objective evaluation,” and “the personal attachment of a party to particular trees or landscaping shall not be compelling.....”

Under the board’s order, the Oleruds must pay the cost of removing the trees and replacing them with smaller trees or shrubs.

Some readers have asked me whether the Board’s order forcing the Bakers to destroy their trees is a taking requiring compensation under the Fifth Amendment. Under current Supreme Court precedent, probably not. Since the order doesn’t create a “physical invasion” of the property or even come close to destroying 100% of its economic value, it would likely be analyzed under the Penn Central test, which is generally very favorable to the government. In my view, current precedent is far too permissive. When government orders the destruction of valuable private property, it should be considered a taking unless the property is creating a public nuisance or some other kind of clear harm, or the property was illegal contraband at the time it was acquired. Wartime military necessity could also be an exception. But I’m not going to defend that view in detail here.

The Constitution aside, laws like the Clyde City ordinance are ill-conceived. One of the main purposes of private property is to allow owners to do as they wish with their land even if neighbors would prefer a different use. In some cases, we might want to restrict land uses if they create a large-scale harm to the neighborhood that individual neighbors cannot address on their own, due to collective action problems. But this, pretty obviously, is not such a case.

The ordinance also undermines economic efficiency. While the Oleruds value having an unobstructed view of the skyline, the Bakers just as clearly value the trees. If the Oleruds are not willing to offer the Bakers a large enough payment to persuade them to cut down the trees voluntarily, that’s a strong sign that the Bakers value the trees more than the Oleruds value the view. While the ordinance states that authorities must ignore “the personal attachment” that owners feel for their trees, that personal attachment is a part of the trees’ value just as much any “objective” assessment of their sale value on the market.

This is not a case where effective bargaining between the two sides is prevented by high transaction costs. The Oleruds and the Bakers are neighbors and can easily negotiate with each other. The Oleruds did in fact negotiate with the Bakers, but could not reach agreement. They did not offer enough money to persuade the Bakers to give up their trees. That suggests that leaving the trees alone is not only more respectful of property rights, but also promotes economic efficiency. Societal wealth is maximized when property rights are held by those who value them the most. In most cases, the best way to ensure that is to let property owners decide for themselves whether they want to sell a particular right. The Bakers are in a good position to determine whether they value the trees more than the Oleruds are willing to pay, or not. A government agency, by contrast, has no good way of determining how much subjective value the Bakers really attach to the trees, and therefore no way of knowing whether they value the right in question more than the Oleruds do.

UPDATE: The Seattle Times article linked above says that this is the first time the ordinance in question was actually used to force a homeowner to cut down their trees. It’s possible this means that neighbors usually reach agreement voluntarily, thereby ensuring that the ordinance has little effect. But it’s also possible that those who want to force their neighbors to remove trees are able to use the threat of the ordinance to get tree owners to give up their rights at prices far below their true value.

We don’t yet have the final results. But Virginia news radio station WINA 1070 is projecting that Question 1, the Virginia eminent domain reform referendum question, is going to pass by an “overwhelming” margin. For reasons I outlined here and here, this is an important improvement over the present Virginia constitution, which is one of the worst in the nation when it comes to protecting property rights. Question 1 is by no means perfect. But it’s definitely a step in the right direction.

This continues a longstanding national trend in which post-Kelo eminent domain reform referendum initiatives usually pass overwhelming, except in a few cases where they were paired with extraneous unpopular items. I discussed referendum initiatives that have passed in other states in this article.

I realize that this probably will not be the most important Virginia election result of the night. But it is significant for anyone interested in property rights issues.

UPDATE: A. Barton Hinkle of the Richmond Times-Dispatch recently posted a good column on Question 1 and its success.

UPDATE: The election returns are now available, and Question 1 got an impressive 74.7% of the vote.

In addition to the presidential and congressional elections tomorrow, there are also some important referenda initiatives on the ballot in many states. They include several on issues of special interest to me and many VC readers: property rights and the War on Drugs.

Here in Virginia, we have Question 1, which would strengthen protection for property rights against eminent domain abuse. For reasons I outlined here and here, Virginia currently has one of the nation’s worst state constitutions on property rights issues. While far from perfect, Question 1 would be a major improvement over the status quo. I hope my fellow Virginians will support it.

Six other states have marijuana legalization initiatives on the ballot, including three (Colorado, Oregon, and Washington) that would legalize marijuana entirely, and three others that would only legalize medical marijuana. As I explained here, all of these initiatives are imperfect, but still important improvements over the status quo. Polling data suggests that the Colorado and Washington initiatives have a good chance of passing, and Oregon is not completely out of the question. This is an important opportunity to roll back the War on Drugs in three major states, and I hope the voters will take it.

According to survey data, opposition to drug legalization comes disproportionately from political conservatives. I summarized the conservative case against the War on Drugs here. Conservatives and others may also want to check out the late William F. Buckley’s reasons for opposing it.

I wouldn’t take this prediction to the bank if I were a betting man. But, like co-blogger David Bernstein, I give Obama a slight edge, perhaps a 60-65 percent chance of victory. In the contest between national polls favoring Romney and battleground state polls favoring Obama, I give slightly greater credence to the latter. My main reason for doing so is that their results have been more consistently favorable to Obama than the national polls have been for Romney. In addition, there is a nontrivial chance that Obama could win the electoral college while narrowly losing the popular vote. I also give some weight to the majority view among mainstream pollsters, which seems to be that Obama is more likely to win than not. On technical questions like this, I try to give some deference to expert opinion, unless there is strong evidence of bias or ulterior motives. And I am skeptical of claims by some conservatives that the professional pollsters are in the tank for Obama.

On the other hand, it’s certainly possible that the pollsters’ likely voter models are just slightly skewed in Obama’s favor. In a very close election like this one, even a 1-2 point skew could lead to an incorrect prediction as to the outcome. Dan McLaughlin of Red State makes an interesting case for that view in a series of posts (see here and here). Notice that McLaughlin is not claiming that Nate Silver and other analysts who predict an Obama victory are a bunch of idiots whose models are radically deficient, or a bunch of shills for the Democrats. Rather, he seems to be saying that Silver has a pretty good model that is slightly off – enough to make a wrong prediction in a close election. Silver perhaps has a similar take on McLaughlin’s prediction.

Turning to the other races, I predict that the Republicans will retain control of the House with a majority fairly close to the one they have now. My guess is that they will probably fall just short of taking control of the Senate, with perhaps a total of 48-49 seats. But there are enough close races that I could easily be wrong on this one. The more you believe that state polls are understating Republican turnout, the more you should expect that the GOP might take more close Senate races than most pollsters expect.

I also expect that Virginia Question 1 will pass by a comfortable margin, as has every other post-Kelo property rights reform referendum, except for a few that were tied to unpopular measures such as abolishing rent control.

With the exception of the predictions on the House and Question 1, I am far from confident about any of these calls. The election is so close that both the popular vote margin and that in key battleground states is within the margin of error of most polls. The same goes for a number of the close Senate races. That magnifies the potential impact of even small methodological errors by pollsters.

UPDATE: Some commenters correctly point out that the RCP average of national polls has Obama and Romney effectively tied (an 0.1 point differential). That strengthens the case for Obama. The most recent two polls (one by Rassmussen and one by the Washington Post and ABC) include one that is tied (Rassmussen) and one that gives Romney a 1 point lead (WP-ABC). But for reasons Ted Frank outlines, a tie does give an implicit edge to a challenger because undecideds are more likely to oppose the incumbent, despite recent efforts to overturn that conventional wisdom. Given the most recent national polls, it may be that 60-65 for Obama should really be a little higher, such as 65-70. But I still see the national polls as very slightly favoring Romney, though certainly less so than a week or two ago.

Radley Balko has an interesting column noting the troubling implications of some of the arguments being made in the drug-sniffing dog cases currently before the Supreme Court. He points out that these dogs’ drug alerts are often unreliable because, in many cases, dogs seek to please their handlers rather than search out the truth. Thus, they often alert when they sense that the handler wants them to do so (e.g. – if he has a hunch). This leads to a very high rate of false positives in tests:

[T]he majority of the [Supreme Court] justices assumed that the nose of a dog is infallible — that an alert from a dog indicated the presence of whatever the dog was trained to find, and nothing else. An alert, then, was enough to establish probable cause for a more thorough search by law enforcement personnel.

That assumption was wrong at the time, and it has been repeatedly proven wrong since...
Consider another study conducted by Lisa Lit, a neurologist and former dog handler at the University of California-Davis. Lit brought 18 dog/handler teams currently operating in law enforcement agencies to an empty church. Each team conducted eight searches, each lasting about five minutes. If they were accurate, none of the dog/handler teams should have alerted in any of the searches. There were no drugs or explosives anywhere in the church.

But Lit had set some traps. The handlers were told that each search could have as many as three “target scents” — drugs for the drug dog teams, or explosives for the explosive dog teams. The handlers were told that in some cases hot packages were indicated by a piece of red paper. These red paper packages were designed to trick the handlers. Lit also set a trap for the dogs: Some of the packages contained unwrapped sausages.

The results were striking. The dogs falsely alerted in 123 of the 144 total searches. Because some dogs falsely alerted more than once in the same search, the total number of false alerts was 225. The dogs correctly completed the search without an alert just 21 times, for a success rate of 14.5 percent.

But here’s the more interesting part: The dogs were about twice as likely to falsely alert at the packages designed to trick their handlers than they were at the packages stuffed with sausages.

Why did so many fail? It wasn’t the dogs’ fault. A dog’s nose more than lives up to the hype. It is the finely tuned instrument you’ve always heard it to be. The problem is that for thousands of years, we’ve bred into dogs a more lovable trait: a constant, tail-wagging, cheek-licking desire to please us.

We’ve primarily bred dogs for protection and for companionship. The dogs that exhibited those qualities would get bred again, strengthening the traits from generation to generation. Over time, the dogs that were best at those two tasks were those that could read our body language, and react accordingly. This is why my dog barks when there’s a stranger at the door, but will curl up into a date’s lap within a few minutes of having met her. She’s picking up on my cues.

If a drug dog isn’t trained to account for this, it’s likely only confirming its handler’s biases and suspicions....

Balko also points out that police departments often have perverse incentives to use poorly trained dogs, because doing so makes it easier to get search warrants and seize property for asset forfeitures. I discussed the latter problem in this post. Finally, he notes that the conjunction of several individually plausible potential Supreme Court decisions could have very troubling effects in combination:

It might make sense to rule that a drug dog’s sniff is not a search under the Fourth Amendment, because a sniff is relatively unintrusive. There may be nothing unreasonable about ruling that a drug dog’s alert is enough to establish probable cause. After all, we all know that dogs have a finely honed sense of smell. And finally, it might make sense to rule that it is unreasonable to require prosecutors and police departments to provide a particular dog/handler team’s field history, because doing so would place an undue burden on law enforcement agencies.

Taken in isolation, you could make a good argument that these are all perfectly reasonable rulings. But put them together. By this time next year, we could be facing this terrifying reality: Police could take a dog/handler team into an apartment complex or to a row of townhouses and have them sniff dozens, even hundreds of residences. That team may have a history in which less than half the dog’s alerts lead to any actual recovery of narcotics. No matter. The police could then make note of all the doors at which the dog alerted, and all of those residences could look forward to middle-of-the-night visits from the local SWAT team.

This Thursday at 6:30 PM, I will be speaking on property rights and eminent domain reform in Virginia at the Old Dominion Boat Club in Alexandria. I will be joined by Virginia Attorney General Ken Cuccinelli, or perhaps it is more correct to say that I will be joining the AG. The event is open to the public.

I expect that much of the discussion will focus on Question 1, the eminent domain reform constitutional amendment that Virginians will vote on this November. Although Question 1 is far from perfect, I believe it is an improvement over Virginia’s present constitution. I defended Question 1 here and here.