Limiting the Collective Right to Exclude

For decades, society’s disparate interests and priorities have stymied attempts to resolve issues of housing affordability and equity. Zoning law and servitude law, both of which have been robustly empowered by decades of jurisprudence, effectively grant communities the legal right and ability to exclude various sorts of residences from their wealthiest neighborhoods. Exclusion by housing type results in exclusion of categories of people, namely, renters, the relatively poor, and racial minorities. Although our society’s housing woes may indeed be intractable if we continue to treat a group’s right to exclude with the level of deference that such exclusionary efforts currently enjoy, this treatment is unjustifiable. Courts should acknowledge and consider the broad public and private costs that are created by a group’s unfettered right to exclude. A more balanced approach would weigh individual autonomy to control property and various public harms resulting from community exclusions against legitimate community needs to exclude certain residents and uses. Judicial limits of the collective right to exclude may enable real progress toward fair and affordable housing to be achieved at last

Sovereign Debt and the Three and a Half Minute Transaction: What Sticky Boilerplate Reveals about Contract Law and Practice

The Three and a Half Minute Transaction: Boilerplate and the Limits of Contractual Design, by Mitu Gulati and Robert E. Scott, is a cautionary tale about modern legal practice where the protagonist is the standard sovereign debt contract. The book discloses an undeniable flaw in sovereign bond boilerplate (the widely used pari passu clause) that, in spite of expensive, sophisticated lawyering, perpetuates a risky disconnect between party intent and contract terms. The fact that boilerplate terms persist even in elite sovereign-lending practices suggests that the problem of over-reliance on standard form language is ubiquitous.When contract terms diverge from client risk management and intent, lawyers have neither provided clients proper representation nor justified their fees. Situated in the context of sovereign debt failures and a profession at the crossroads, the authors\u27 engaging book sounds a well-researched wake-up call to the law. This review explains the context of their study and then builds upon their findings. This review explores two questions suggested but not addressed in The Three and a Half Minute Transaction, namely: What does boilerplate stickiness reveal about the continuing validity of certain contract law doctrines, and what does it suggest for the evolving role of the modern transactional attorney? The conclusion on both accounts is that transactional law practice requires a systemic overhaul, re-focusing lawyerly attention from bulk production of contracts to innovations in contract research and design

Sustainable Affordable Housing

Sustainable real estate development is an essential component of intergenerational justice, in part because the real estate sector creates more than 20% of the world’s carbon emissions. Governments, recognizing that environmentally sustainable real estate development involves higher upfront costs, have encouraged green building by offering publicly funded incentives such as tax credits, grants, reduced approval fees, and streamlined permitting. Using market measurement innovations such as the Dow Jones Sustainability Index, investors can promote environmentally sustainable development by prioritizing real estate developers that embrace environmentally conscious practices. Even though real estate in general still underperforms in many other sectors in terms of its environmental sustainability, trends are encouraging. Commercial real estate has embraced green building as a concept, and the World Economic Forum predicts that approximately 55% of all new commercial properties in 2020 will be “built green.” The affordable housing sector, however, needs more than marginal governmental carrots and sticks to be able to implement sustainability practices. Environmental sustainability will elude affordable housing as long as it remains in its current, financially unsustainable state. Government housing assistance programs are unpredictable, underfunded, and may to some extent perpetuate rather than solve the problem of housing need. The nation’s supply of affordable housing is rapidly declining in quality as well as quantity, and rising housing costs and stagnant incomes mean that an ever-increasing number of lower-income households must devote an unsustainably high percentage of their income toward housing costs. Our affordable housing system cannot go green until the system stops operating in the red. Properly conceived, affordable sustainability of housing and sustainable affordability of housing are mutually enforcing concepts. Successful housing laws and policy must therefore find a way to achieve both

Lessons in Price Stability from the U.S. Real Estate Market Collapse

The U.S. residential housing market collapse illustrates the consequences of ignoring risk while funding mortgage borrowing. Collateral over-valuation was a foundational piece of the crisis. Over the past few decades, secondary markets, securitization, policy and psychology increased the flow of funds into real estate. At the same time, financial market segmentation divorced risk from reward. Increased mortgage capital availability, unmitigated by proper risk allocation, led to real estate price inflation. Social trends and government policies exacerbated both the mortgage capital over-supply and the risk-valuation disconnect. The Dodd-Frank Act inadequately addresses the underlying asset valuation problem. Federal regulation may support market stability systemically, but micro-level oversight and private rights of action more efficiently and effectively secure responsible mortgage pricing