What do you think?
Rate this book
Regulatory Takings: Law, Economics, and Politics
Are rent controls and zoning regulations unconstitutional? Should the Supreme Court strike down the Endangered Species Act when its administration interferes with the use of private property? These questions are currently debated under the doctrine of regulatory takings, and William Fischel’s book offers a new perspective on the issue.
Regulatory Takings argues that the issue is not so much about the details of property law as it is about the fairness of politics. The book employs jurisprudential theories, economic analysis, historical investigation, and political science to show why local land use regulations, such as zoning and rent control, deserve a higher degree of judicial scrutiny than national regulations. Unlike other books on this topic, Regulatory Takings goes beyond case law to buttress its arguments. Its reality checks range from reviews of statistical evidence to local inquiries about famous takings cases such as Pennsylvania Coal v. Mahon and Lucas v. South Carolina Coastal Commission . The gap between legal theory and on-the-ground practice is one reason that Fischel investigates alternative means of protecting property rights.
Local governments are often deterred from unfairly regulating portable assets by their owners’ threat of “exit” from the jurisdiction. State and federal government regulations are disciplined by property-owner coalitions whose “voice” is clearly audible in the statehouses and in Congress.
Constitutional courts need to preserve their resources for use in areas in which politics is loaded against the property owner. Regulatory Takings advances an economic standard to decide when a local regulation crosses the border from legitimate police power to a taking that requires just compensation for owners who are adversely affected.
Regulatory Takings argues that the issue is not so much about the details of property law as it is about the fairness of politics. The book employs jurisprudential theories, economic analysis, historical investigation, and political science to show why local land use regulations, such as zoning and rent control, deserve a higher degree of judicial scrutiny than national regulations. Unlike other books on this topic, Regulatory Takings goes beyond case law to buttress its arguments. Its reality checks range from reviews of statistical evidence to local inquiries about famous takings cases such as Pennsylvania Coal v. Mahon and Lucas v. South Carolina Coastal Commission . The gap between legal theory and on-the-ground practice is one reason that Fischel investigates alternative means of protecting property rights.
Local governments are often deterred from unfairly regulating portable assets by their owners’ threat of “exit” from the jurisdiction. State and federal government regulations are disciplined by property-owner coalitions whose “voice” is clearly audible in the statehouses and in Congress.
Constitutional courts need to preserve their resources for use in areas in which politics is loaded against the property owner. Regulatory Takings advances an economic standard to decide when a local regulation crosses the border from legitimate police power to a taking that requires just compensation for owners who are adversely affected.
432 pages, Hardcover
First published June 23, 1998
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 of 1 review
July 4, 2010
Another fantastic book by William Fischel. Like "The Homevoter Hypothesis," this book culls insights from sociology, law, economics, history, and political science to create a truly interdisciplinary view of its topic, in this case the debate over "regulatory takings," those government economic regulations that are imposing enough to be considered a "taking" of private property under the 5th and 14th Amendments to the US Constitution. Since this area of law is famously confused, Fischel tries to find some simple rules whereby judges can decide which takings cases should be subject to strict judicial scrutiny.
His main thesis is that, despite many economic efficiency arguments, state and especially national regulations should be LESS subject to judicial review than local regulations, since at higher levels competing interest groups are well-organized enough to counteract the "majoritarian factions" that would try to appropriate private property for their own ends, just as James Madison suggested way back in 1787 (he also goes into detail on James Madison's attempts to disguise his fear of majorities under the guise of a concern about "factions" in his famous Federalist number 10). Fischel's main concern is that local governments can nullify the rights of powerless small property-holders. He does note, however, that for most property-holders, local government isn't necessarily a problem, since unlike in the national situation, most labor and capital can "exit" from local government jurisdictions simply by moving, and that limits local governments' ability to over-regulate them. Landowners and owners of large fixed-capital plants, though, are supremely subject to local majorities that can take their property for their own ends without fear of exit or reprisal, and therefore judges should keep a very close eye on local regulations that impinge upon these groups. Fischel cites what he calls "Kozinski's Paradox" to illustrate his point.
Alex Kozinksi was a California district judge who, in Hall v. Santa Barbara (1986), overturned Santa Barbara's rent control regulation for mobile homes precisely BECAUSE it was more efficient than other forms of rent control and regulation. In his opinion, Kozinski stated that of course the most "efficient" regulation was one that merely transferred property from one group to another (which entailed little "deadweight loss" on any economic producers). Yet the very existence of inefficiencies in most regulatory cases showed that there was a negotiating process whereby property holders had a voice in politics to prevent a total taking. In the mobile homes cases, however, California jurisdictions like Santa Barbara imposed very strict rent control and anti-eviction laws on mobile park owners, which made the "renters" of mobile home land de facto owners of their plots, with rights to hold and transfer them to others. Consequently, the value of their coaches (which effectively meant the value of the park owners' land) went way up. This was a fairly efficient, but fundamentally unfair, transfer of wealth from park owners (an unloved local minority) to renters (who had a large voice in Santa Barbara politics through their Golden State Mobilehome Owners League (GSMOL)), and thus Kozinski struck the law down as a unconstitutional taking (Kozinski was overruled, however, by California's supremely anti-landowner supreme court, which Fischel examines in some detail). In Fischel's mind this case, like the extreme downzonings which entirely take away the property rights of owners of undeveloped land, is precisely what judges should look out for.
He goes into so much more, from the rise and fall of benefit-offset rules in eminent domain cases to John Hart Ely's "political process" theories of judicial review to the actual irrelevance of "Dillon's Rule" for local governments. Perhaps most interesting, however, is his look in Chapter 1 into the background of the Pennsylvania Coal v. Mahon (1922) case, where the Supreme Court (in an Oliver Wendell Holmes' opinion) for the first time elaborated its theory of "regulatory takings." Fischel doesn't just read about the case, he travels to Scranton to see the land at issue, he talks to local engineers about subsidence and coal mining, he even visits the son of the author of the Pennsylvania act in question, and these efforts generate real insights. By actually describing his work, instead of just his results, Fischel is able to demonstrate the real drama and excitement of intellectual discovery, and the value of old-fashioned grunt-work and shoe-leather for discovering answers to even fairly esoteric questions. For instance, to examine the case of Lucas v. South Carolina Coastal Commission (1992), Fischel actually visits the home site that the Commission forbid Lucas from developing and discovers two houses there. It turns out that once the state settled the case and bought the parcels from Lucas, they decided to develop them to "recoup" their losses from all the litigation. He shows that when governments actually have to pay the costs of arbitrary anti-development regulations, they often have second thoughts.
Overall this is a great book for anyone interested in local government, law, and how politics really works in America.
His main thesis is that, despite many economic efficiency arguments, state and especially national regulations should be LESS subject to judicial review than local regulations, since at higher levels competing interest groups are well-organized enough to counteract the "majoritarian factions" that would try to appropriate private property for their own ends, just as James Madison suggested way back in 1787 (he also goes into detail on James Madison's attempts to disguise his fear of majorities under the guise of a concern about "factions" in his famous Federalist number 10). Fischel's main concern is that local governments can nullify the rights of powerless small property-holders. He does note, however, that for most property-holders, local government isn't necessarily a problem, since unlike in the national situation, most labor and capital can "exit" from local government jurisdictions simply by moving, and that limits local governments' ability to over-regulate them. Landowners and owners of large fixed-capital plants, though, are supremely subject to local majorities that can take their property for their own ends without fear of exit or reprisal, and therefore judges should keep a very close eye on local regulations that impinge upon these groups. Fischel cites what he calls "Kozinski's Paradox" to illustrate his point.
Alex Kozinksi was a California district judge who, in Hall v. Santa Barbara (1986), overturned Santa Barbara's rent control regulation for mobile homes precisely BECAUSE it was more efficient than other forms of rent control and regulation. In his opinion, Kozinski stated that of course the most "efficient" regulation was one that merely transferred property from one group to another (which entailed little "deadweight loss" on any economic producers). Yet the very existence of inefficiencies in most regulatory cases showed that there was a negotiating process whereby property holders had a voice in politics to prevent a total taking. In the mobile homes cases, however, California jurisdictions like Santa Barbara imposed very strict rent control and anti-eviction laws on mobile park owners, which made the "renters" of mobile home land de facto owners of their plots, with rights to hold and transfer them to others. Consequently, the value of their coaches (which effectively meant the value of the park owners' land) went way up. This was a fairly efficient, but fundamentally unfair, transfer of wealth from park owners (an unloved local minority) to renters (who had a large voice in Santa Barbara politics through their Golden State Mobilehome Owners League (GSMOL)), and thus Kozinski struck the law down as a unconstitutional taking (Kozinski was overruled, however, by California's supremely anti-landowner supreme court, which Fischel examines in some detail). In Fischel's mind this case, like the extreme downzonings which entirely take away the property rights of owners of undeveloped land, is precisely what judges should look out for.
He goes into so much more, from the rise and fall of benefit-offset rules in eminent domain cases to John Hart Ely's "political process" theories of judicial review to the actual irrelevance of "Dillon's Rule" for local governments. Perhaps most interesting, however, is his look in Chapter 1 into the background of the Pennsylvania Coal v. Mahon (1922) case, where the Supreme Court (in an Oliver Wendell Holmes' opinion) for the first time elaborated its theory of "regulatory takings." Fischel doesn't just read about the case, he travels to Scranton to see the land at issue, he talks to local engineers about subsidence and coal mining, he even visits the son of the author of the Pennsylvania act in question, and these efforts generate real insights. By actually describing his work, instead of just his results, Fischel is able to demonstrate the real drama and excitement of intellectual discovery, and the value of old-fashioned grunt-work and shoe-leather for discovering answers to even fairly esoteric questions. For instance, to examine the case of Lucas v. South Carolina Coastal Commission (1992), Fischel actually visits the home site that the Commission forbid Lucas from developing and discovers two houses there. It turns out that once the state settled the case and bought the parcels from Lucas, they decided to develop them to "recoup" their losses from all the litigation. He shows that when governments actually have to pay the costs of arbitrary anti-development regulations, they often have second thoughts.
Overall this is a great book for anyone interested in local government, law, and how politics really works in America.
Displaying 1 of 1 review