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Tag: Property rights

  • Peru’s Marxist president changes his mind, doesn’t make Hernando de Soto prime minister

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    Marxist Peruvian President José María Balcázar announced Monday that free market economist Hernando de Soto would serve as Peru’s next prime minister. What was expected to be a rare display of camaraderie between Marxists and free marketers in Peru has since turned sour. On Tuesday, de Soto was blindsided by the surprise appointment of Finance Minister Denisse Miralles as prime minister. De Soto blamed Cerronistas, an extreme faction within the Marxist-Leninist Perú Libre party, for conspiring against him. 

    Miralles’ appointment is the first major mistake of Balcázar, who Congress elected last week to replace the scandal-ridden former President José Jerí, who was ousted over “undisclosed meetings with a Chinese businessman,” reports Reuters. Even though Balcázar will only serve as the interim president until a new one assumes the office in July, foregoing de Soto’s economic expertise is a missed opportunity for the South American nation, a conclusion Balcázar himself acknowledged earlier this week. 

    On Monday, Balcázar told Peruvian news outlet Exitosa that the country must turn to de Soto “to guarantee [Peru’s] economic model and ensure that the new president of the republic…has clear guiding principles and no economic shocks.” 

    A native of Arequipa, Peru, de Soto founded the Institute for Liberty and Democracy (ILD) in 1980 to study the relationship between property rights and poverty. At the time of the ILD’s founding, Peru was one of the least economically free countries in the world, scoring 3.66 out of 10 (placing it at 102 out of 110 countries) on the Fraser Institute’s economic freedom index. It had a measly GDP per capita of about $3,800 (in constant 2010 U.S. dollars).

    De Soto explored the connection between Peru’s lack of economic freedom and its poverty in The Other Path (1986). In the October 1989 issue of Reason, de Soto condemned Latin American Marxists for treating “the poor as an oppressed proletariat with no interest in entrepreneurship and free markets” and explained the relationship between the country’s regulatory bloat and economic underdevelopment.

    De Soto blamed the 27,000 rules created per year—only 1 percent of which were actual laws passed by the Peruvian Congress—for driving Peruvians into the black market, thwarting capital accumulation, investment, and growth by imposing unjustifiable burdens to entering the formal economy. (As an example, de Soto’s team compared the difficulty of registering a small garment shop with the government in Peru to doing the same in New York City. What took the ILD team four hours in the U.S. took them 289 days in the outskirts of Lima.)

    Responding to the regulatory strangulation identified by de Soto’s research, the Peruvian Congress passed the Administrative Simplification Law in June 1989, which “oblige[d] the State to remove…unnecessary obstacles and costs for society,” according to Andina, Peru’s state-owned news agency.

    But not everyone appreciated de Soto’s work. The Shining Path, a Maoist terrorist group, bombed the ILD’s offices in April 1991 and stormed them in July, resulting in a skirmish with security guards that killed three and wounded at least 20.

    Still, de Soto continued advocating for private property rights for Peru’s most vulnerable, which earned him the Cato Institute’s 2004 Milton Friedman Prize for Advancing Liberty and created lasting impacts for the country.

    The World Bank credits the ILD for “conceiving, promoting, and implementing all aspects” of the Registro Predial, an inexpensive property registration system that “registered some 300,000 titles from 1991 to the end of 1995 in urban Lima.” Inspired by this success, the Law to Promote Access to Formal Property was passed in March 1996, establishing the Comisión de Formalización de la Propiedad Informal, “with the principal mandate to formalize existing property in poor urban settlements.” It was a stunning success: “By December 2001 nearly 1.2 million of the country’s previously unregistered residents became nationally registered property owners,” according to Erica Field, a professor of economics at Duke, increasing labor force hours and reducing distortions in labor allocation.

    By 2023, Peru’s economic freedom score had doubled, and its real GDP per capita had increased by 73 percent.

    Despite Peru’s political turmoil—cycling through five presidents in as many years—Bloomberg reports that the country’s economy, “one of Latin America’s most resilient…with growth that outpaces its peers, low inflation and a stable currency,” remains unfazed. On Monday, Balcázar cited de Soto’s technical expertise, ability to build consensus, and international contacts as reasons for his appointment. At the end of the day, these words proved to be meaningless, and it was Miralles, an economic engineer specializing in public-private partnerships, who has led the finance ministry since October, who was sworn in as prime minister. 

    After his surprise replacement, de Soto told reporters on Wednesday night that he conditioned his acceptance of his appointment on bringing about real institutional changes rather than being used as a mere figurehead. To do so, de Soto told Balcázar he must be allowed to replace the Cabinet of Ministers with people uninvolved in Balcázar’s government, including independent advisers from the U.S., Europe, and Asia. De Soto said Balcázar stipulated to this plan and agreed to his list of cabinet members after a three-hour-long breakfast. 

    In a statement released by Blacázar around midnight, the president said “it was not possible to reach the necessary consensus…due to the brief and transitional nature of the constitutionally granted mandate.” De Soto, however, has a different explanation; he told reporters that Cerronistas, the farthest-left faction of Perú Libre, did not want to see him and Central Reserve Bank Chairman Julio Velarde continue the trend of turning Peru into a market economy.

    Perhaps Miralles’ replacement of de Soto can be explained by her less stringent fiscal policy. 

    Miralles told Bloomberg in a late January interview that Peru should soften its 2026 fiscal target, 1.8 percent of gross domestic product (GDP), after achieving its 2025 target of 2.2 percent—the first time in three years it did so. While the Peruvian economy is expected to grow by 3 percent in 2026, Miralles defended her support of increased deficit spending by optimistically projecting 5 percent growth. On Tuesday, Miralles did an about-face, saying “the government’s policy direction will remain firm and unchanged” and that her council “will act with clear signals of stability, fiscal responsibility, and respect for the rules that build confidence,” according to Andina.

    Hopefully, Miralles will be actually committed to fiscal responsibility and policies that foster real economic growth. De Soto, however, believes that the replacement of him and his cabinet is further evidence of the “Venezuelization” of Peru.

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    Jack Nicastro

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  • Does Light Consist of “Object[s]”?

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    In HAC v. ER, decided in August by the Michigan Court of Appeals (Judges Sima Patel, Michael Riordan, and Brock Swartzle), petitioner had tried to get personal protection orders against his neighbors; the trial court rejected petitioner’s claims, and the court of appeals affirmed.

    Under the relevant Michigan law, such orders are generally issued when there’s a finding of “stalking,” which is defined as “continuing harassment,” which in turn covers certain kinds of “continuing unconsented contact.” Unconsented conduct is defined to include, among other things, “Placing an object on, or delivering an object to, property owned, leased, or occupied by that individual.”

    Petitioner alleged various incidents of alleged harassment; the court mostly concluded that he hadn’t introduced enough evidence supporting each, but the analysis as to one category of incidents struck me as more legally interesting:

    [T]he petition against ER [also] alleged that respondents “installed powerful spot lights that are aimed [at] [petitioner’s] house,” causing petitioner to “[b]lack out my windows so [he] can [s]leep.” In his petition against AR, petitioner alleged that the spot lights “are aimed at [his] house.” Petitioner testified that the exterior flood lights have shined on his home for the past five or six months before he filed the petitions. Specifically, the flood lights shine toward the windows of his home during the nighttime, or “[a]ll night, from dark.” On at least one occasion, petitioner texted respondents to cease shining the lights toward his home. On another occasion, petitioner asked them in-person to “direct [the lights] away from [his] house.”

    At an unknown time and date, a “zoning officer” visited petitioner’s house after petitioner complained that respondents were violating the lighting ordinance. Petitioner stated that the lights were still shining on his home as of the night of February 22, 2024. Several photographs were admitted into evidence, which showed the lights at respondents’ house, how the lights shine on petitioner’s home, and poster board and cardboard covering petitioner’s windows….

    [P]etitioner contends that the light from respondents’ flood lights “consist[s] of ‘packets of energy’ which, while different in kind than a physical object, is no less an ‘object’ than any other object.” However, except for providing one dictionary definition of “light,” petitioner offers no other authority or rationale in support of this argument, so we consider it abandoned. In any event, we agree with the trial court that such allegations, if true, might constitute some type of “ordinance violations” but do not necessarily rise to the level of requiring a PPO….

    The key here, I think, isn’t that light isn’t an object as a matter of physics; rather, it’s not an object as a matter of law.

    Say petitioner was upset at his neighbors barbecuing meat, and even claims that they are deliberately doing it to upset him. Smells certainly do stem from objects in the physical sense: If I smell something, it’s because molecules from that thing reach the inside of my nose. Molecules from the barbecue therefore end up on the neighbor’s property, and the barbecuers surely know that this will happen (and might even intend it).

    But that doesn’t count as trespass, and it wouldn’t count for purposes of the protective order, either. On the other hand, if a tree on my land­—a macroscopic feature rather than a microscopic one­—grows over my neighbor’s property, that is a trespass. The law draws a distinction here on the basis of practical and intuitive distinctions, not based on scientific ones.

    If the smell unreasonably interferes with my neighbor’s use or enjoyment of his property, it can be a nuisance­—barbecuing probably won’t be seen as unreasonable interference, though running a pig farm might­—lighting that unreasonably interferes with a neighbor’s use or enjoyment of his property can be a nuisance as well. But nuisance a separate tort, which requires a showing of unreasonable interference rather than mere physical presence. And, unlike placing an object on a neighbor’s property, it probably wouldn’t count as “continuing unconsented contact” for purposes of the statute.

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    Eugene Volokh

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  • Brickbat: Land Acknowledgement

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    A homeowner in British Columbia, Canada, who found what might be Indigenous human remains on their land, now faces huge legal, archaeological, and monitoring costs—well over $100,000 ($73,000 U.S.) and counting. Under Canadian provincial law, private landowners must pay to protect and investigate heritage sites with no government help or compensation. The Tk’emlúps te Secwépemc nation is not only claiming the property as a heritage site but also a surrounding buffer zone that affects other properties. Meanwhile, it isn’t even clear the remains are Indigenous: One archaeological firm said the bones could have been brought to the site by a previous owner as part of a sand fill deposit.

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    Charles Oliver

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  • Mamdani’s promise of the ‘warmth of collectivism’ is a lie. Just ask all the failed communes.

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    “Replace the frigidity of rugged individualism with the warmth of collectivism!” says my new socialist mayor, Zohran Mamdani.

    Sounds so nice.

    No more greedy capitalists hoarding wealth. People share. It’s the socialist dream.

    What will replace capitalism and individualism? One model is the commune—that socialist system where people share, rather than greedily chasing money.

    In my new video, TikTokers claim capitalism is “ending.” They sing about the beauty of communes. One asks, desperately, “Where is my commune?!”

    Good question. They’re hard to find because they keep failing.

    One of the most famous was founded in 1825 in New Harmony, Indiana. Private property was banned and residents shared everything.

    The result?

    After just two years, most residents left.

    Today, New Harmony is a tourist attraction, meant to “inspire progressive thought,” says the assistant director of the expensively renovated site. “It just has some magic here.”

    But New Harmony’s magic only exists today because a nepo baby poured her rich father’s money into it. Robert Blaffer started Humble Oil, which became ExxonMobil. After his death, his daughter spent millions of her father’s dollars turning the failed commune into an expensive museum.

    The “magic” tourists experience in New Harmony comes from capitalism, the only system that creates lasting wealth.

    The “warmth of collectivism” fails again and again.

    It’s failing now in Cuba, North Korea, Nicaragua, and Venezuela.

    It was tried and abandoned in the Soviet Union, Mongolia, Afghanistan, Ethiopia, Angola, Mozambique, Benin, the Congo, Somalia, Grenada, and Cambodia.

    Even China and Vietnam’s leaders, to allow their countries to prosper, felt they had to give up pure socialism and allow private property and capitalism.

    But my new mayor still wants to give “the warm of collectivism” a shot.

    If he were my age, he would have been a hippie. Hippie communes were popular then.

    One in Tennessee called The Farm forbade members to have their own money or property. Everyone shared everything.

    “Mothers would nurse each other’s babies—other parents would take care of you,” said a former member.

    “If you want to become a member of the community,” warned The Farm’s lawyer, “you got to put everything you have in the pot. We’re doing this for a lifetime!”

    But they couldn’t do it for a lifetime. They couldn’t even keep it for a dozen years.

    There just wasn’t enough money, says the commune’s bookkeeper: “Everybody was saying…there’s not enough food, not enough vegetables, not enough diapers, shoes. All things the children needed.”

    Only when the commune allowed members to own things, and keep profit from their labor, was The Farm able to survive.

    Residents now say, “We’re not socialists anymore. We have our own money.”

    New York’s Oneida Community was founded as a free-love, socialist commune, where “every man in the community was essentially married to every woman and all the property was shared.”

    But Oneida survives today only because they dropped socialism and became capitalists, selling expensive Oneida silverware.

    Likewise, an Iowa commune, Amana Colonies, survives because they abandoned socialism to sell appliances.

    Some Americans (falsely) think Israeli communes, Kibbutzim, succeeded. But they mostly failed, despite getting heavy taxpayer subsidies. Why?

    Yaron Brook of the Ayn Rand Institute explains, “People envied one another…and treated one another really, really bad. It’s obvious why. Some people worked hard. Others didn’t. Yet they had exactly the same.”

    The surviving few Kibbutzim are capitalist. Members own property and earn their own money.

    The “warmth of collectivism” doesn’t last.

    But socialists never admit that their communes fail.

    “Because to them it’s a moral ideal,” says Brook. “Moral striving for the good, even though it’s a complete disaster and a complete failure everywhere and anywhere it is tried.”

    No matter what my new mayor and other “progressives” say, the only thing that works—the only thing that really makes life better for people—is private ownership and capitalism.

    COPYRIGHT 2026 BY JFS PRODUCTIONS INC.

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    John Stossel

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  • Barring Institutional Investors From Buying Homes Won’t Make Housing More Affordable – and Would Likely Make Things Worse

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    Model houses
    Andrii Yalanskyi/Dreamstime.com

     

    Donald Trump announced today he plans to ban the purchase of single-family homes by large institutional investors. As with many Trump actions, this is not something the president actually has the authority to do. Real estate transactions and property ownership are generally subject to state, not federal authority. And any federal intervention – if constitutional at all – must at least be authorized by Congress.

    In addition, barring large investors from the market is unlikely to mitigate the housing crisis, and could easily make things worse. There is no truth to claims that large investors are somehow monopolizing the market and thereby increasing prices. Large institutional investors (those who own 100 or more homes) own only about 3% of single-family homes nationwide. That’s nowhere near enough to attain any kind of monopoly power, even if we assume (implausibly) that the large investors are colluding with each other. The fact that large investors account for a higher percentage of recent sales doesn’t change that reality.  Even if they were to increase their share of the housing stock several-fold, that still wouldn’t be nearly enough to create any kind of monopoly.

    For more on the reasons why large investors are not the cause of high housing prices, see my Cato Institute colleague Norbert Michel’s 2021 testimony before the House of Representatives, on this subject.

    Barring institutional investors may well actually making the housing situation worse, at the margin. Large investors may often be better-positioned to refurbish and modernize homes than small investors or individual homeowners. The big ones can more easily exploit economies of scale. In addition, where allowed to do so, large investors may be more likely to convert single-family structures to multifamily housing. Increasing the stock of the latter is essential for reducing prices and increasing housing for the working and lower-middle classes – the people most severely impacted by housing shortages.

    Large investors are easy to demonize. It is true, as Trump says, that “People live in homes, not corporations.” Left-wing critics large investors say similar things. But, obviously, corporations don’t buy houses in order to live in them themselves, or to keep them empty. They buy them to make money. And the way to do that is to rent them out or resell to willing buyers after increasing their value. Either way, people in need of housing benefit.

    Big investors don’t create those benefits out of altruism. They do it to make a profit.  But, to paraphrase Adam Smith’s famous statement about butchers, brewers and bakers: “It is not from the benevolence of the builder, the developer, and the investor, that we expect our housing, but from their regard to their own interest.”

    Instead of attacking large investors and promoting other snake oil policies like rent control, tariffs, and deportations, politicians would do better to target the real cause of housing shortages: exclusionary zoning and other regulatory barriers that make it difficult or impossible to build new housing in response to demand, throughout much of the country. For an overview of these issues, see my recent Washington Examiner article on “Foot Voting, Housing, and Affordability.”

    I covered some of this ground in much greater detail in a 2024 Texas Law Review article, “The Constitutional Case Against Exclusionary Zoning” (coauthored with Josh Braver).

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    Ilya Somin

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  • Covid Beach Closures, the Takings Clause, and the Police Power Exception

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    Falcon1708/Dreamstime.com

     

    Co-blogger Jonathan Adler recently posted about Alford v. Walton County, an important new 11th Circuit ruling holding that a local ordinance barring property owners from accessing their beachfront property during the Covid pandemic violated the Takings Clause of the Fifth Amendment.

    I think the court was right to conclude there was a taking here, and that the County is therefore required to pay compensation, as required by the Takings Clause. But the court elided the difficult issue of the “police power” exception to takings liability.

    The relevant ordinance completely barred property owners from accessing or using their beach front property for several weeks during the early part of the Covid pandemic, in March-April 2020. As the court explained, this is an obvious severe restriction on property rights, and therefore part of the right to “private property” protected by the Takings Clause.

    Unlike Jonathan Adler, I think the court was also right to conclude this is a “physical taking” that qualifies as a “per se” (automatic) violation of the Takings Clause, as opposed to a mere restriction on “use” subject to the Penn Central balancing test (a vague standard that usually ends up favoring the government). As the court put it, “Ordinance 2020-09 prohibited the Landowners from physically accessing their beachfront property under any circumstances. That is different from a restriction on how the Landowners could use property they otherwise physically possessed.”

    But the court avoided what, to my mind, is the most difficult issue posed by this case: the question of the applicability of the “police power” exception to takings liability. For decades, the Supreme Court and various lower courts have held that government actions that would otherwise qualify as takings are exempt from liability if enacted under the police power, which gives government the authority to protect health and safety.

    Covid-era restrictions arguably fall within the exception, because they were meant to constrain the spread of a deadly contagious disease, one that ended up killing some 1 million Americans. During the pandemic, a number of state courts upheld Covid shutdown orders against takings challenges based on the police power rationale. I wrote about one such case here.

    However, it is far from clear how great a threat to health or safety there must be before the police power exception kicks in. If forestalling even a small risk qualifies, then virtually any restriction on private property rights is exempted from takings liability. After all, just about any use of property poses at least some small risk of spreading disease or causing injury.

    In my recent article, “The Constitutional Case Against Exclusionary Zoning” (coauthored with Josh Braver), we argue the police power exception only applies in cases where the government policy in question is preventing a particularly severe danger. For reasons outlined in the article (pp. 25-31), that approach is consistent with original meaning, and with relevant Supreme Court precedent.

    By that standard, the Walton County beach restriction and similar measures in other jurisdictions do not qualify for the police power exception. It quickly became clear that outdoor transmission of Covid does not pose much risk. Moreover, it was particularly absurd to ban even the owners from using their own property. If one of them was infected, they could much more likely spread the infection to each other while at home indoors, where the law did not prevent them from interacting with each other.

    Thus, I think the court ultimately got this case right. But they should have addressed the police power exception and how it might or might not apply here. The court rightly noted that “there is no COVID exception to the Takings Clause” and that “the government must respect constitutional rights during public emergencies, lest the tools of our security become the means of our undoing.” I agree completely! There must be strong judicial review of government invocations of emergency powers. But, though there is no “Covid exception” or “emergency exception” to the Takings Clause, there is a police power exception. And courts should deal with it, when it is potentially relevant.

    The Supreme Court, in recent years, has shown little interest in clarifying the scope of the police power exception. But it has – rightly – decided a number of cases strengthening protection for property rights under the Takings Clause generally. This makes it more likely that Takings Clause protections will run into the police power exception, as there are fewer situations where restrictions on property rights avoid takings liability for other reasons.

    Thus, the Supreme Court may well have to clarify the police power exception sooner or later. Unless and until they do so, lower courts will continue to struggle with this doctrine.

     

     

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    Ilya Somin

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  • New Jersey town tentatively agrees to not seize 175-year-old family farm

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    The township of Cranbury, New Jersey, will not take Andy Henry’s 175-year-old family farm for an affordable housing development after all.

    According to a tentative agreement made public yesterday, the township has agreed to halt its eminent domain proceedings against Henry’s farm while it awaits a state regulatory change that will open up an alternative site for affordable housing development.

    While no formal agreement to stop the seizure has been reached yet, Cranbury Mayor Lisa Knierim said in a statement yesterday that the state’s impending rule change (expected to be formalized by the end of the year) “creates a meaningful opportunity” to find another location for affordable housing that will let Henry keep his farm.

    “This is something that we hope will work out favorably for all the parties involved. It’s been a long way of getting here, and we’re not done yet, but this is very encouraging,” Henry tells Reason. “[I’m] definitely optimistic. More than if I’d talked to you a week ago.”

    The eminent domain saga surrounding Henry’s farm began back in April, when the town informed Henry that it planned to seize his farm, which he co-owns with is brother, and convert it into a 130-unit affordable housing site.

    Cranbury has insisted since the beginning that the seizure was a necessary means of meeting its obligations under New Jersey’s fair share housing law. That law gives localities affordable housing quotas and then requires them to update their planning laws to meet those quotas.

    From the get-go, Cranbury’s attempted seizure was hotly controversial.

    Henry’s property is the only operative farm in what is now Cranbury’s booming warehouse district. For years, he’d been turning down multiple, multi-million dollar offers from warehouse developers looking to redevelop his land into a logistics center as well.

    His deep sentimental attachment to the property, which has been in his family since before the Civil War, made him unwilling to forfeit it to the township either.

    “They saw this little patch of green out there and said, ‘oh, we’ll just snatch that up.’ It’s very disappointing to me,” Henry says.

    While New Jersey state law requires towns to plan for affordable housing, it does not require them to actually build that housing themselves, nor to seize property to facilitate affordable housing development.

    Instead, they must show that they’ve amended their laws to create a “realistic opportunity” for enough affordable housing development.

    Tim Duggan, Henry’s attorney, told Reason back in June that the town could have satisfied that requirement through a number of other means, including upzoning other locations in town to allow for denser housing.

    Fair housing advocates also weighed in against the seizure of Henry’s farm. The purpose of New Jersey’s fair share housing laws is not only to encourage affordable housing but to ensure that housing isn’t all dumped in unsuitable locations.

    The Fair Share Housing Center, a non-profit that works to enforce New Jersey housing law, argued in an administrative complaint that even if Cranbury could voluntarily purchase Henry’s farm, they would still be proposing to place affordable housing in a warehouse district far from jobs, amenities, and services.

    Despite these objections, the town insisted that the seizure of the farm was the only way it could comply with state law. In June, it submitted a housing element to the state that called for using eminent domain to take Henry’s property.

    Henry promptly countersued to block the seizure. A number of other groups, including the Fair Share Housing Center, also asked the state regulators to reject Cranbury’s housing element.

    While this legal process was unfolding, Cranbury’s seizure efforts also attracted wide-ranging political opposition. New Jersey Gov. Phil Murphy weighed in against the seizure, as did Republicans in the state Legislature.

    U.S. Secretary of Agriculture Brooke Rollins publicly opposed the taking of Henry’s farm as well, and even appears to have donated to a GoFundMe in support of Henry’s case.

    This pressure eventually proved enough to get Knierim to back down. In September, she authored a letter to town residents saying that an alternative site to Henry’s farm had been identified.

    In order to make the site viable for affordable housing development, said the mayor, the state’s housing finance agency needed to amend a rule forbidding affordable housing tax credits from being used to finance projects within 250 feet of existing warehouses.

    Absent that rule change, Henry’s farm was still at risk.

    According to statements from both the mayor and Murphy issued yesterday, the state has started the process of amending its 250-foot warehouse rule. The rule making is anticipated to be finished by the end of the year, said Murphy.

    Once that’s complete, and the town’s housing element is amended to reflect the change, Henry’s farm will finally be safe from eminent domain.

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    Christian Britschgi

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  • Abolish the FCC

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    FCC

    The Trump Administration Federal Communications Commission’s (FCC) recent efforts to intimidate broadcasters into taking anti-Trump comedians off the air are blatant violations of the First Amendment. They also lend weight to longstanding libertarian arguments for abolishing the FCC.

    FCC Chair Brendan Carr threatened to pull ABC’s broadcast license unless it stopped broadcasting comedian Jimmy Kimmel’s show (which ABC quickly did). Earlier, the FCC similarly threatened CBS, which then canceled Stephen Colbert’s show (Colbert is another anti-Trump comedian). Trump now threatens to use similar tactics against other broadcasters who air shows that attack him.

    Robert Corn-Revere, electronic media expert with FIRE, has a helpful analysis of the reasons why such attentions are unconstitutional. As he notes, just last year, in NRA v. Vullo, the Supreme Court unanimously reiterated the principle that “the First Amendment prohibits government officials from relying on the threat of invoking legal sanctions and other means of coercion . . . to achieve the suppression of disfavored speech.”[quotations omitted]. In Vullo, the Supreme Court struck New York officials efforts to coerce the NRA into curbing its pro-gun rights speech, at the behest of liberal Democratic Gov. Andrew Cuomo. That reasoning applies to Trump and Carr, as well. If anything, their unconstitutional motives are even more blatant than Cuomo’s were.

    If the Trump FCC targets more broadcasters, hopefully they will sue and win. But there is a deeper problem here: an agency that has broad power to grand or deny licenses to broadcasters is an inherent danger to freedom of speech. That’s especially true officials hides their unconstitutional motives more carefully hidden than Trump and Carr have done.

    This is not a new problem. Only a few years after the establishment of the FCC in 1934, Franklin D. Roosevelt used the agency to target conservative broadcasters opposed to the New Deal. Later John F. Kennedy and Lyndon Johnson used the “Fairness Doctrine” – developed by the FCC as part of its regulatory authority – to target critics of their policies. The Fairness Doctrine continued to be used as a tool to restrict speech until the Reagan FCC got rid of it in 1987.

    Until now, recent presidents have not used the FCC as abusively as FDR, JFK, and LBJ did.  But the danger remained, and Trump is now exploiting it. Even if open attempts at censorship are struck down the courts, the FCC can still intimidate broadcasters by using its powers to deny and grant licenses, restrict mergers, and the like, citing seemingly neutral pretexts. Fear of such action may be why ABC and CBS have – so far – chosen not to go to court.

    In his classic 1959 article, “The Federal Communications Commission,” the great libertarian economist Ronald Coase warned of this danger, and advocated the abolition of the FCC (Coase later won the Nobel Prize in Economics in part for this work):

    The situation in the American broadcasting industry is not essentially different in character from that which would be found if a commission appointed by the federal government had the task of selecting those who were to be allowed to publish newspapers and periodicals in each city, town, and village of the United States. A proposal to do this would, of course, be rejected out of hand as inconsistent with the doctrine of freedom of the press. But the broadcasting industry is a source of news and opinion of comparable importance with newspapers or books and, in fact, nowadays is commonly included with the press, so far as the doctrine of freedom of the press is concerned.

    If newspapers and magazines had to be licensed by the government before being allowed to publish, there would be obvious opportunities for favoritism and abuse. The exact same danger exists with broadcast licensing.

    The standard rationale for broadcast licensing by the state is that broadcast frequencies are scarce resources that government must protect from “interference.” If two networks try to broadcast on the same frequency, chaos might ensue and neither would be effectively transmitted. But the same is true of traditional media. Printing presses, ink, and other production supplies are also valuable scarce goods. Two newspapers cannot use the same printing press at the same time, or print their publications on the same pieces of paper. Yet rightly rely on markets and private property rights, not government licensing and central planning, to allocate these resources.

    As Coase explained, the same system of property rights can work with broadcast frequencies. Let private broadcasters own individual frequencies, and let free exchange and market competition decide who uses which one.

    This solution is even better with the rise of cable television and then internet broadcasting. No longer is it plausible to argue that a fully private system would be dominated by just a handful of major networks, as was perhaps true in the pre-cable age. Owners of individual broadcast networks, radio stations, and websites can decide what viewpoints they want to platform. Market forces will incentivize new entrants to promote viewpoints that incumbents neglect, but audiences might like to see. We have seen how right-wing networks like Fox and Newsmax arose to challenge more liberal traditional media. More recently, there is no shortage of websites (including social media sites) espousing a range of different ideologies. Elon Musk’s generally right-wing Twitter/X site, for example, contrasts with more left-wing Bluesky (among others). I am one of many users who have accounts on both.

    I oppose Musk’s politics and disapprove of  many of his policies for managing X. I don’t always love everything that goes on at Bluesky either. But I support both sites’ rights to manage the speech on their property without government interference.

    This market system isn’t perfect. I myself have long argued that consumers do a poor job of acquiring and processing political information, in part because they have bad incentives. That applies to our consumption of both traditional broadcast media, and more recent internet and social media products. But market competition and private property are far preferable to allowing the FCC to decided who gets a license, and to intimidate critics of the incumbent president into submission or self-censorship.

    Elsewhere, I have assessed a number of possible approaches to dealing with the problems of misinformation and political ignorance. There is no easy answer, though some options are potentially promising. Letting the FCC intimidate and coerce broadcasters isn’t one of them. It’s long past time to recognize that Ronald Coase was right, and the FCC should be abolished.

     

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    Ilya Somin

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  • New Jersey Town Drops Plan to Condemn a Church to Build a Park and Pickleball Courts

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    Christ Episcopal Church, Toms River, NJ.

     

    I have previously written about how the town of Toms River, New Jersey, planned to use eminent domain to condemn the Christ Episcopal Church and build and park and pickleball courts on the spot. The plan seems to have been motivated by a desire to prevent the church from building a homeless shelter on part of its property. In late July, the mayor postponed a scheduled vote on the plan, after it met with widespread opposition, and leading public interest firms specializing in property rights issues (such as the Institute for Justice and the Pacific Legal Foundation) offered to represent the Church in potential legal challenges to the taking. The Becket Fund for Religious Liberty offered to help bring a case under the RLUIPA statute.  I outlined some possible grounds for such a challenge here.

    Last week, the mayor announced that the plan is being abandoned completely:

    His announcement came during the New Jersey town’s council meeting’s public comment time when a speaker asked him to stop the seizure. He responded that a poll he commissioned showed that “it’s pretty clear that the public does not support the eminent domain. We thought the church would be a willing seller and we’re not moving forward with the eminent domain of the church.”

    He said the poll, which he noted had an error rate of plus or minus five, showed that “somewhere in the neighborhood” 60% of the town opposed his plan. (Rodrick had told Episcopal News Service in May that, if the plan had to be put to a vote, he expected 85% of township voters would support it.)

    Following the mayor’s reversal, the council entered an executive session to seek legal advice on whether it could decide to let the proposed ordinance die, as action on it had not been advertised as legally required. Despite some conflicting opinions from township attorneys, council members unanimously passed a resolution saying they would no longer try to acquire Christ Church’s property by eminent domain….

    The resolution apparently leaves open the possibility that a new resolution could be brought on the other five lots Rodrick also wants to take for parkland along the Toms River. Those lots are not adjacent to the church.

    I think this happy outcome is a small, but notable example of how litigation can be combined with political action to strengthen protection for property rights and religious freedom. I am not sure whether the public opposition or the threat of a lawsuit was more important in forcing the local government to reconsider. But probably it was some combination of both. Seizing a church because it wanted to help the homeless doesn’t look good; and if you are a local government trying to get away with a dubious use of eminent domain, IJ and PLF are probably the people you least want to see arrayed against you in court! I commend them for their outreach here.

    I have long argued that a dual strategy combining litigation and political action is the right approach to strengthening protection for constitutional property rights, and many other important rights, as well. This incident doesn’t, by itself, prove me right. But it’s a case in point.

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    Ilya Somin

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  • Compensation for legal fees is a critical protection against civil forfeiture abuses

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    On a Friday in March 2021, Brian Moore, an aspiring rap artist, was about to catch a flight from Atlanta to Los Angeles, where he planned to produce a video that he hoped would promote his musical career. To pay for the video, he was carrying $8,500 in cash, money he had inherited from his late grandfather.

    Federal drug agents put an end to Moore’s plan by taking his money, which they vaguely alleged was connected in some way to illegal drug activity. What happened next illustrates the importance of legal safeguards against the dangers posed by civil forfeiture, a system of legalized larceny that authorizes law enforcement agencies to pad their budgets by seizing supposedly crime-tainted assets without filing criminal charges, let alone obtaining a conviction.

    While profit-motivated law enforcement agencies tend to portray it as inherently suspicious, there is nothing illegal about traveling with large sums of cash. And although the government claimed a drug-detecting dog “alerted” to Moore’s money, that is less incriminating than it sounds, since research has found that most U.S. currency contains traces of cocaine.

    The government’s evidence was so weak that it decided to drop the case after Moore challenged the seizure in federal court. Moore got his money back, but he was still out thousands of dollars in legal fees until last week, when the U.S. Court of Appeals for the 11th Circuit ruled that he was entitled to compensation for those expenses.

    Unlike criminal defendants, civil forfeiture targets have no right to court-appointed counsel, which helps explain why they usually give up without a fight. According to one estimate, more than nine out of 10 federal civil forfeiture cases are resolved without judicial involvement.

    Challenging a forfeiture is a complicated and daunting process that is very difficult to navigate without a lawyer. But the cost of hiring one typically exceeds the value of the seized property, meaning forfeiture targets can lose even when they win.

    Congress tried to address that problem by passing the Civil Asset Forfeiture Reform Act (CAFRA), a 2000 law that says “the United States shall be liable for reasonable attorney fees” whenever a property owner “substantially prevails” in a federal forfeiture case. But when Moore got his money back and sought $15,000 to pay his lawyers, U.S. District Judge Thomas W. Thrash Jr. ruled that he was not entitled to compensation under CAFRA because he had not met that standard.

    Under Moore’s contingency fee agreement with his lawyers, that decision left him on the hook for one-third of the money he had recovered. But with pro bono help from the Institute for Justice, Moore appealed Thrash’s ruling, and a three-judge 11th Circuit panel unanimously concluded that the judge had misapplied CAFRA.

    The government’s prospects of winning at trial were so iffy that the Justice Department asked Thrash to dismiss the case with prejudice, precluding any future attempt to confiscate his money. According to the 11th Circuit, that judicially endorsed outcome was enough to conclude that Moore had “substantially prevail[ed].”

    “We’re pleased to see Brian made whole after years of litigation, but his case highlights the abusive civil forfeiture tactics used by the federal government, which will litigate a case against a property owner for years and then voluntarily dismiss the case on the eve of the government’s defeat,” says Institute for Justice Senior Attorney Dan Alban. “Without the ability to recover their attorneys’ fees after victory, most property owners cannot afford to defend their property from forfeiture”—a reality that motivated the “critical protections for property rights” that Congress approved in 2000.

    “It’s a huge relief to have the court agree that I should get all my money back,” Moore says. “Even though the government couldn’t say what I did wrong and dropped the case, I was going to lose thousands of dollars. I hope that my victory can pave the way for others to get justice without paying a price.”

    © Copyright 2025 by Creators Syndicate Inc.

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    Jacob Sullum

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  • Photo: A tiny monument to eminent domain resistance in New York City

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    This is part of Reason‘s 2025 summer travel issue. Click here to read the rest of the issue.

    The Hess Triangle is the result of an eminent domain fight that began in 1910, when New York City seized and demolished a Greenwich Village apartment building owned by the Hess family. The city had forgotten this roughly 25-inch plot on the edge of the property—until 1921, when officials demanded that the Hess estate pay back taxes on the land. The Hess family refused to give the plot to the city, and in 1922 it instead installed a sidewalk mosaic reading “Property of the Hess estate which has never been dedicated for public purposes.”

    This article originally appeared in print under the headline “The Hess Triangle.”

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    Emma Camp

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  • Harris and Trump Offer Terrible Housing Policy

    Harris and Trump Offer Terrible Housing Policy

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    Kamala Harris and Donald Trump. (NA)

     

    The housing crisis is one of the most important policy issues facing the nation. Housing shortages increase living costs for large numbers of people, and also prevent millions from moving to places where they would have better job and educational opportunities, thereby slowing economic growth and innovation. Both Kamala Harris and Donald Trump have taken positions on housing issues. But their ideas are mostly ones that would cause more harm than good. Sadly, neither candidate proposes any meaningful steps to break down the biggest barrier to housing construction in most of the US: exclusionary zoning rules that make it difficult or impossible to build new housing in response to demand.

    Harris is the one that has offered more in the way of detailed proposals. She proposes giving $25,000 tax credits to first-time homebuyers and tax incentives for developers selling homes to first-time buyers. She also advocates restricting the use of algorithms to set rental prices, and  capping rent increases and cracking down on “corporate” landlords. The rent control idea may be a reference to the Biden Administration’s recent plan to cap rent increases at 5% per year, though it is not clear if Harris endorses it. Harris also promises to build 3 million new homes by 2029, but is extremely vague on how exactly she plans to do it.

    These policy ideas range from mediocre to awful. A $25,000 subsidy for first-time homebuyers is unlikely to do much to ease housing shortages. The fundamental problem is one of regulatory restrictions on supply. In that environment, subsidizing demand will simply bid up prices. Moreover, the people who most suffer from housing shortages are mostly renters, not would-be homeowners. This subsidy plan does nothing for them. Much the same goes for the plan to provide tax incentives for developers. This won’t do much for supply so long as developers are barred from building much in the way of new housing in many places, especially multi-family housing.

    If zoning and other regulatory restrictions do get lifted, Harris’s tax credit incentives would be unnecessary. And, indeed, there would be no good reason to have the tax code favor housing purchases over other types of consumption.

    Rent control is a terrible idea that is actually likely to exacerbate shortages. This is an Economics 101 point broadly accepted by economists across the political spectrum. Don’t take my word for it. Take that of prominent progressive ecoonomists, such as Paul Krugman, and Jason Furman, former chair of Barack Obama’s Council of Economic Advisers, who points out that “[r]ent control has been about as disgraced as any economic policy in the tool kit.”

    Finally, there is no good reason to think that corporate landlords are any worse than other types of landlords, or that algorithmic pricing is somehow making the housing crisis worse. To the contrary, corporate landlords are usually as good or better than their “mom and pop” counterparts. Take it from a longtime renter with experience living under both types of landlords; the corporate ones usually maintain their properties better, and have better customer service. And algorithms can help owners identify situations where they can increase profit by lowering prices, as well as increasing them.

    Harris is right to want to build 3 million new homes. Indeed, it would be great to build more than that. But, so far, she hasn’t proposed much in the way of effective methods of doing it. Unless and until she does so, her aspiration for 3 million new homes is not much more viable than my desire to add 3 million unicorns to the nation’s stock of magical animals.

    At times she has made noises about cutting back red tape. I assume, also, that she supports President Biden’s plan to make “underutilized” federal land available for housing construction. The latter is a good idea, but it’s far from clear exactly which land will be opened up and on what terms.

    Trump’s housing agenda is less detailed than Harris’s, but could well be even worse. The housing chapter of the Heritage Foundation’s controversial Project 2025 emphasizes that “a conservative Administration should oppose any efforts to weaken single-family zoning.” Single-family zoning, of course, is the most restrictive type of exclusionary zoning blocking new housing construction in many parts of the country. Donald Trump has disavowed Project 2025, and claims he “knows nothing about it.” But the author of the housing chapter is Ben Carson, Trump’s former secretary of Housing and Urban Development. During the 2020 election, Carson and Trump coauthored a Wall Street Journal op ed attacking efforts to curb exclusionary single-family zoning. He recently reaffirmed that position, promising to block “low-income developments” in suburban areas. On housing, at least, Project 2025 seems to reflect Trump’s thinking, and that of the kinds of people likely to influence housing policy in a second Trump administration. The Trump worldview is one of NIMBYism (“not in my backyard”).

    Trump’s immigration policies—a centerpiece of his agenda, if anything is—would also have negative effects on housing. Evidence shows that mass deportations of undocumented immigrants reduce the availability of housing and increase the cost, because undocumented immigrants are an important part of the construction work force (an effect that outweighs the potential price-increasing effect caused by immigration increasing the number of people who need housing). Trump and his allies also plan massive reductions in most types of legal immigration. Slashing work visas is also likely to negatively affect housing construction (as well as damage the economy in other ways).

    If there is a saving grace to the Harris and Trump housing policies, it’s that most of them cannot be implemented without new legislation, which will be extremely hard to push through a closely divided Congress. That’s true of the Harris’s rent control policies, and her plans to subsidize home purchases, and crack down on “corporate” landlords. Likewise, a Trump administration would probably need new legislation for any major effort to protect single-family zoning against state-level reform efforts.

    But Trump’s immigration policies are an exception. The executive could ramp up deportation and slash legal immigration without new legislation. Indeed, the Trump administration did in fact massively cut legal immigration during Trump’s previous term in office. Deportation efforts could be partially stymied by state and local government resistance (as also happened during Trump’s first term). But Trump could partly offset that by trying to use the military, as he and his allies plan to do (whether legal challenges to such efforts would block them is debatable). At the very least, ramping up federal deportation efforts would drive undocumented immigrants further underground, and reduce their ability to work on construction, where laborers are relatively out in the open and more vulnerable to detection than in some other jobs.

    In sum, Harris and Trump are offering mostly terrible housing policies. Their main virtue is the difficulty of implementing them.

    There are, in fact, steps the federal government can take to ease housing shortages. Most restrictions on new housing are enacted by state and local governments, which limits the potential of federal intervention. But Congress could enact legislation requiring state and local governments that receive federal economic development grants to enact “YIMBY” legislation loosening zoning rules. Perhaps a stronger version of the YIMBY Act proposed by Republican Senator Todd Young and Democratic Rep. Derek Kilmer (their version could be a useful start, but does not have enough teeth). Those who object to such legislation on grounds of protecting local autonomy should recall that YIMBYism is actually the ultimate localism.

    The federal Justice Department could also support litigation aimed at persuading courts to rule that exclusionary zoning violates the Takings Clause (which it does!). Such litigation could do much to break down barriers to new housing construction. Federal government support wouldn’t guarantee victory. But it could help by giving the argument instant additional credibility with judges.

    Finally, the feds could help pursuing the opposite of Trump’s immigration policies, and instead make legal migration easier. That would increase the construction workforce, and make housing construction cheaper and faster.

    Sadly, neither major-party candidate is proposing to do any of these things. Instead, they mostly sell claptrap that is likely to make the housing crisis even worse.

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    Ilya Somin

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  • New NBER Study Finds Covid Eviction Moratoria Increased Racial Discrimination

    New NBER Study Finds Covid Eviction Moratoria Increased Racial Discrimination

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    A new National Bureau of Economic Research study by economists

    We provide evidence of intensified discriminatory behavior by landlords in the rental housing market during the eviction moratoria instituted during the COVID-19 pandemic. Using data collected from an experiment that involved more than 25,000 inquiries of landlords in the 50 largest cities in the United States in the spring and summer of 2020, our analysis shows that the implementation of an eviction moratorium significantly disadvantaged African Americans in the housing search process. A housing search model explains this result, showing that discrimination is worsened when landlords cannot evict tenants for the duration of the eviction moratorium.

    The authors are likely to revise the study before final publication. But their results should not be surprising. Eviction moratoria make it difficult or impossible for landlords to evict tenants who default on the rent. That, in turn, leads property owners to be more wary of renting to people who are disproportionately likely to default, such as poor people. If blacks are, on average, poorer than whites or more likely to default for other reasons, landlords will be more reluctant to rent to them at a time when they cannot resort to eviction to deal with default. And studies do in fact suggest black tenants are, on average, poorer than white ones, and more likely to carry rental debt.

    The NBER result is also consistent with previous studies showing that eviction moratoria and other policies that make it harder to evict delinquent tenants increase the cost and reduce the availability of housing. They are also likely to screen potential tenants more carefully, keeping out those who seem unusually likely to end up in default. Thus, while eviction moratoria and other similar policies benefit current tenants, they reduce the availability of housing to future ones—including current tenants wishing to move to a different location.

    This, doesn’t necessarily prove that eviction moratoria are unjustified. If, for example, Covid-era moratoria saved many lives, the resulting  reduction in the availability of housing might have been worth it. But there is no good evidence that any such thing happened.

    Similarly, eviction moratoria enacted during economic downturns might still be worth it if they save large numbers of people from poverty and homelessness. But, once again, available evidence doesn’t support that theory. When the Supreme Court abruptly terminated the federal Covid eviction moratorium in August 2021 (ruling that the CDC lacked the authority to enact it), the eviction “tsunami” predicted by defenders of the policy failed to materialize.

    There is much that can be done to increase the availability of housing to low-income and minority tenants. Most importantly, it can reduce or eliminate exclusionary zoning, which has  a long history of blocking housing construction in ways that disproportionately harm those very groups.

    If government wants to provide low-income tenants with extra support during a recession or a pandemic in order to prevent eviction, it can give them temporary rent subsidies.  That can help tenants make ends meet without incentivizing landlords to exit the market, raise rents, or discriminate low-income and minority tenants. But we should avoid policies—like eviction moratoria—that tend to harm many of the very people they seek to help.

    The legal and policy questions here are distinct. I have argued that the federal CDC eviction moratorium was beyond the agency’s power, and that eviction moratoria also violate the Takings Clause of the Fifth Amendment, and similar provisions of state constitutions. But even those who differ with me on these legal questions should consider whether eviction moratoria really are a good strategy for helping poor tenants.

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    Ilya Somin

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  • The darkside of housing bipartisanship

    The darkside of housing bipartisanship

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    Happy Tuesday and welcome to yet another edition of Rent Free. This week’s stories include:

    • Texas Gov. Greg Abbott bizarrely cites TikTok falsehoods while calling for a crackdown on investor-owned housing.
    • Austin, Texas, builds a lot of homes and sees home prices drop. Scientists are baffled.
    • Sacramento, California, experiments with leasing public land to the homeless.

    But first, our lead story about the darker side of housing bipartisanship. As most of the coverage of the 2024 YIMBYtown conference detailed, housing is one of those issues where Republicans and Democrats—while generally more polarized than ever—can still work across the aisle to pass zoning reform.

    The flip side of this dynamic is that Republicans and Democrats work against their own co-partisans to undermine zoning reform. For an example of this, witness what happened in Arizona yesterday.

    In Arizona, Starter Homes Are Finished

    Gov. Katie Hobbs, a Democrat, has earned herself a place in housing history/infamy by vetoing H.B. 2570, aka the Arizona Starter Homes Act, on Monday. Hers is the first gubernatorial veto of a major YIMBY bill.

    The bill aimed to make smaller, owner-occupied housing easier to build by limiting local governments’ abilities to ban smaller homes, require new housing to sit on larger lots, enforce purely aesthetic design requirements, force new housing to be covered by homeowners’ associations (HOAs), or mandate community amenities that would require an HOA to manage.

    H.B. 2570’s deregulatory means in the service of more traditionally liberal ends of housing affordability produced unusually bipartisan votes in the Arizona House and Senate, with Republicans and Democrats pretty evenly represented in both the ‘yes’ and ‘no’ columns.

    “We had very progressives like myself partnering with very strong conservatives, who saw this as a proper rights issue, whereas people like myself look at it as a basic equal opportunity issue,” Rep. Analise Ortiz (D–Glendale) told Reason last week.

    A majority of legislators from her own party voting in favor of the Starter Homes Act wasn’t enough to bring Hobbs around.

    “This is unprecedented legislation that would put Arizonans at the center of a housing reform experiment with unclear outcomes,” said the governor in a veto statement. “This expansive bill is a step too far and I know we can strike a better balance.”

    Hobbs’ veto statement cited only the opposition of the U.S. Department of Defense—which complained the bill didn’t exempt areas around military bases—and firefighters, who said limitations on local setbacks regulations and required amenities like swimming pools could increase fire hazards. (The Starter Homes Act bill expressly protects local health and safety regulations.)

    Conspicuously, the governor did not mention the primary organized opposition to the Starter Homes Act: Arizona’s cities.

    As Reason reported last week, Arizona’s influential League of Cities and Towns—a publicly funded association of municipalities that lobbies the state legislature—was dead set against the bill from the beginning. The league had refused to negotiate on it or propose amendments.

    After the bill passed, Hobbs told reporters that she was undecided on the bill and that she would have preferred housing bills that also have the support of local governments.

    In Arizona, Democrats have long been the party of local control.

    As the usual minority party in control of the state’s largest city governments, Arizona Democrats have been constantly fending off Republican efforts to preempt local, liberal regulations and taxes. Of all the elements of local control, cities are the most jealous guardians of their land-use powers.

    The rising salience of housing has upset this dynamic somewhat. Among the champions of H.B. 2570 were a number of progressive Democrat lawmakers. They’re now complaining about the influence cities are wielding in the legislature.

    “Cities and their lobbyists cannot continue to be the only barrier to statewide zoning reform solely to retain power and uphold policy decisions that have been historically detrimental to so many, especially communities like mine,” said Sen. Anna Hernandez (D–Phoenix).

    An irony of the bipartisan nature of housing politics is that it might be too bipartisan. Conservative Republicans and progressive Democrats both support zoning reform. In the Legislature, they can form alliances to get bills passed. But come election day, they’re still going to vote like conservative Republicans and progressive Democrats.

    If Hobbs’ calculation is that she can upset YIMBY Democrats while still keeping their votes, she might not be wrong.

    As one former Arizona Democrat lawmaker and YIMBY activist told The Atlantic‘s Jerusalem Demsas for a recent article, “If [Hobbs] ended up being the biggest NIMBY in our state, I’d still vote for her reelection because zoning, even though I’m one of the biggest zoning-reform advocates in the state…still doesn’t rise high enough for me to flip my vote.”

    In her veto letter, Hobbs tries to have it both ways on housing. She says she’s “supportive” of the Legislature’s ongoing “efforts” to find a compromise on other housing bills that would liberalize accessory dwelling unit laws, all for residential redevelopment of commercial properties, and the like. She also says that “the status quo is not acceptable.”

    Nevertheless, her veto preserves a status quo that increasing numbers of Republicans and Democrats find untenable.

    Texas Gov. Greg Abbott’s TikTok Housing Politics 

    When a politician says they love free markets, you always know a “but” is coming.

    Such was the case with Texas’ Republican Gov. Greg Abbott, who said on X that he “strongly supports free markets. But this corporate large-scale buying of residential homes seems to be distorting the market and making it harder for the average Texan to purchase a home.”

    Abbott was quote tweeting a profanity-laced TikTok video in which a woman claims that “private equity firms purchased 44 percent of single-family homes in America.”

    “This must be added to the legislative agenda to protect Texas families,” said Abbott. No one said politics in the 21st Century would be uninteresting.

    Cracking down on corporate home ownership has to date been mostly a cause of left-wing politicians, and heterodox right-wingers like U.S. Sen. J.D. Vance (R–Ohio). They blame institutional investors for driving up the prices of single-family homes that could have been purchased by individual families who, the story goes, are now stuck perpetually in the renting market.

    In fact, the woman in the TikTok video didn’t quite have all her facts straight.

    Writing over at Housing Wire, Logan Moshtashami cites data from Freddie Mac showing that large corporate purchasers who bought 100 or more homes in the last year make up about 2.5 percent of home sales. In the second quarter of 2023, very large landlords owning over 1,000 homes purchased just .4 percent of single-family homes.

    Investor-purchased homes have made up between 20 and 30 percent of home sales going back to the start of the century, but the vast majority of these investors are mom-and-pop landlords who own under 10 properties.

    This is a far cry from BlackRock buying up all the homes. While a growing (apparently bipartisan) collection of politicians likes to complain about this phenomenon, it’s not necessarily a bad thing.

    Renters who either don’t qualify for financing or who aren’t looking to buy can still have access to single-family housing by renting it from an investor-owner. Research shows that restrictions on investor-owned housing result in lower-income renters being excluded from single-family neighborhoods.

    One way to boost homeownership would be to legalize the production of smaller starter homes. A bill that would have done just that happened to pass in Arizona. We know how that turned out.

    In Austin, Proof of YIMBY Concept

    A wave of in-migration to booming Austin, Texas, saw home prices, rents, and incomes increase. This has been followed by a rash of new home and apartment construction, which is now pulling housing prices back down.

    Overall, rents are down 7 percent this year, according to Apartment List data culled by The Wall Street Journal. The Journal gives this all a somewhat negative framing, describing a “glut” of luxury apartments and single-family homes selling at a loss.

    It’s also yet more proof that the basic supply and demand story continues to be true, even for housing. Despite some important zoning reforms, Austin is far from a YIMBY paradise. Nevertheless, development is a lot less restricted there than in other high-cost “superstar” cities.

    As a result, new construction in the city is able to partially accommodate new demand and moderate price spikes.

    The Texas-sized edition of Rent Free earlier this month covered some of the ways that the city and the state could liberalize development even more to boost construction and bring prices down.

    In Sacramento, the Socialist Version of Homeless Homesteading

    Sacramento, California, is trying out a novel approach to the city’s homelessness crisis: leasing public land to an officially sanctioned homeless encampment. CalMatters reports:

    When Sacramento changed its plan to demolish a homeless encampment on a vacant lot on Colfax Street, instead offering the homeless occupants a lease, activists and camp residents celebrated it as a win.

    The first-of-its-kind deal, which allows the camp to remain in place and govern itself without city interference, was held up as a model Sacramento could replicate at future sites.

    It’s produced mixed results. Those who didn’t like the encampment’s presence haven’t been mollified. Many of the encampment residents complain of a lack of city-provided services.

    Homeless advocates still argue the city lease allows people with nowhere else to go some level of stability and sanctuary, and makes it easier for homeless service providers to maintain contact with the people they’re trying to help.

    The experiment appears to be the socialist version of the “homeless homesteading” I proposed last year. The idea was to give the homeless title to public land they already occupy. Once they owned the land, the homeless could go about improving homes on-site. If their presence continued to produce nuisances, nearby property owners could purchase the land from them. Encampment residents could use the proceeds of the sale to buy more traditional housing.

    It’s an “off the wall” idea, to be sure. By only leasing the land to the homeless, Sacramento is short-circuiting the Coasian bargaining that promised the biggest benefits of homeless homesteading.

    Quick Links

    • Vancouver, Canada, is taking land rights for indigenous communities seriously. But now that the area’s First Nations use their land rights to build housing, the neighbors are having second thoughts.
    • Speaking of starter homes in Arizona, the city of Mesa’s zoning board voted to recommend denying a 26-unit townhome project in response to complaints from homeowners near the project site.
    • The New Republic published a takedown of the YIMBY case that building more housing reduces housing prices which ends up conceding the core YIMBY premise that building more housing reduces housing prices.
    • New York Senate Democrats continue to push for a radical “Good Cause Eviction” bill. See Reason‘s past coverage of the bill here.
    • Milwaukee, Wisconsin, presses ahead with zoning reforms that would loosen density restrictions across the city.
    • The housing production power combo appears to be Democrat-run cities in Republican-run states, where everyone is at least minimally interested in growth.

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    Christian Britschgi

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  • Cross-Ideological YIMBY Coalition Defies Increasing Polarization – So Far

    Cross-Ideological YIMBY Coalition Defies Increasing Polarization – So Far

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    (NA)

    The New York Times and Atlantic writer Jerusalem Demsas both recently published articles on how the YIMBY (“Yes in my backyard) movement has cut across ideological and partisan lines in an era where such divisions have engulfed most other policy issues. The Times headline calls it “The Surprising Left-Right Alliance That Wants More Apartments in Suburbs”:

    For years, the Yimbytown conference was an ideologically safe space where liberal young professionals could talk to other liberal young professionals about the particular problems of cities with a lot of liberal young professionals: not enough bike lanes and transit, too many restrictive zoning laws….

    But the vibes and crowd were surprisingly different at this year’s meeting, which was held at the University of Texas at Austin in February. In addition to vegan lunches and name tags with preferred pronouns, the conference included — even celebrated — a group that had until recently been unwelcome: red-state Republicans.

    The first day featured a speech on changing zoning laws by Greg Gianforte, the Republican governor of Montana, who last year signed a housing package that YIMBYs now refer to as “the Montana Miracle….”

    Day 2 kicked off with a panel on solutions to Texas’s rising housing costs. One of the speakers was a Republican legislator in Texas who, in addition to being an advocate for loosening land-use regulations, has pushed for a near-total ban on abortions.

    Anyone who missed these discussions might have instead gone to the panel on bipartisanship where Republican housing reformers from Arizona and Montana talked with a Democratic state senator from Vermont. Or noticed the list of sponsors that, in addition to foundations like Open Philanthropy and Arnold Ventures, included conservative and libertarian organizations like the Mercatus Center, the American Enterprise Institute and the Pacific Legal Foundation.

    Demsas makes similar points:

    Over the past four years, as the affordability crisis has worsened, the YIMBYs have gained ground. In conservative Montana, an anti-California message spurred lawmakers into passing pro-development bills; in Washington State, ambitious proposals were passed in the name of affordability and racial equity. But members face pressure on both sides to abandon ship. How long can they hold on?

    One reason the YIMBY movement has remained bipartisan is that it’s decentralized. But the gang gets together periodically for a national conference amusingly called “YIMBYtown”—the rare place where you might find socialists, centrist economists, and Trump-supporting elected officials all in the same room, working toward the same goal.

    I have been writing about cross-ideological agreement on this issue for years. Housing deregulation is a cause that unites a wide range of economists and land-use experts across the political spectrum. Thus, I—a libertarian property rights scholar—end up in the same boat with liberals like Richard Kahlenberg and Paul Krugman, and conservatives at the National Review.

    Prominent political advocates of zoning reform include Virginia Republican Governor Glenn Youngkin and Colorado Democratic Governor Jared Polis. Gov. Polis captured the broad appeal of housing deregulation well, when he said recently that “[i]t’s a solution to housing costs that embraces our individual property rights….  The fact that it’s meeting a real need that people from the left to right, the center, no matter where they are politically, want to do something about high housing costs is really what makes it even more salient.”

    In a forthcoming Texas Law Review article, Josh Braver and I explain why the constitutional case against exclusionary zoning can also cut across ideological lines. I’m a libertarian originalist; Braver is a progressive living constitutionalist. But we both agree that exclusionary zoning violates the Takings Clause of the Fifth Amendment.

    Of course,  the opposing side in this debate—the NIMBY (“Not in My Backyard”) forces—also cuts across ideological lines. It includes left-wingers suspicious of capitalism and development, and right-wingers—including Donald Trump—who play on fears that deregulation will lead more poor people and minorities to move to white suburban neighborhoods. There are also many NIMBYs who believe—contrary to basic economics—that allowing developers build more housing will actually drive up costs rather than increase them. Others who fear that it will reduce property values and change the “character” of their neighborhoods. For some progressive homeowners in the latter camp, narrow self-interest trumps ideology. In reality, many existing homeowners have much to gain from housing deregulation, especially if they have children. But many either don’t know that, are highly risk-averse, or both.

    If I had to speculate on what really unites YIMBYs across the political spectrum, and divides them from their opponents, I would suggest that one big factor is that YIMBYs generally understand Economics 101 and apply it to housing issues. They know that increasing supply by allowing more construction reduces costs, and thereby also increases the availability of homes—especially to the poor and disadvantaged. NIMBYs, by contrast, tend to ignore or deny this.

    More generally, YIMBYs are less likely than NIMBYs to see the economy as a zero-sum game where some people can only gain at the expense of others. Thus, they recognize that letting developers build more housing and letting more people “move to opportunity” benefits not only the developers and migrants themselves, but also the rest of society, which has much to gain from the resulting boost to productivity and innovation. Zero-sum thinking is at the root of many political divides, and likely plays a significant role here, as well.

    I don’t claim zero-sum thinking and economic ignorance are the only factors at work. As I’ve emphasized before, you can be a highly knowledgeable, logically consistent NIMBY if you are highly risk-averse and elevate preservation of the current “character” of your neighborhood over such concerns as protecting property rights, creating opportunity for the poor, and increasing growth and innovation. But NIMBYism would be a far less powerful political force if it were limited to people who think that way.

    You can also reach NIMBY conclusions if you endorse complex “market failure” theories, which essentially hold that Econ 101 doesn’t apply to housing. But then you would need to confront overwhelming evidence indicating that areas with little or no zoning (most notably Houston) have far more affordable housing, even in periods when demand goes up, because many people want to move there. Although we don’t have systematic data on this point, I suspect that only a small fraction of NIMBYs have actually carefully considered complex market failure theories.

    For the moment, YIMBYism remains a valuable cross-ideological coalition, one that has managed to score some important successes, despite also suffering some setbacks. Whether it can continue to defy the forces of polarization remains to be seen.

     

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    Ilya Somin

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  • New Article on “The Constitutional Case Against Exclusionary Zoning”

    New Article on “The Constitutional Case Against Exclusionary Zoning”

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    (Illustration: Sibani Das/iStock)

    My new article, “The Constitutional Case Against Exclusionary Zoning” (coauthored with Josh Braver of the University of Wisconsin) is now available for free download on SSRN. It is also under submission to law reviews. The problem it addresses is, in my view, the most important constitutional property rights issue of our time, and one of the most significant constitutional issues of any kind, given the enormous harm zoning restrictions inflict. That’s an admission against interest, as I have spent much of my career writing about public use and eminent domain.

    Here is the abstract:

    We argue that exclusionary zoning—the imposition of restrictions on the amount and types of housing that property owners are allowed to build— is unconstitutional because it violates the Takings Clause of the Fifth Amendment. Exclusionary zoning has emerged as a major political and legal issue. A broad cross-ideological array of economists and land-use scholars have concluded that it is responsible for massive housing shortages in many parts of the United States, thereby cutting off millions of people – particularly the poor and minorities—from economic and social opportunities. In the process, it also stymies economic growth and innovation, making the nation as a whole poorer.

    Exclusionary zoning is permitted under Euclid v. Ambler Realty, the 1926 Supreme Court decision holding that exclusionary zoning is largely exempt from constitutional challenge under the Due Process Clause of the Fourteenth Amendment, and by extension also the Takings Clause. Despite the wave of academic and public concern about the issue, so far, no modern in-depth scholarly analysis has advocated overturning or severely limiting Euclid. Nor has any scholar argued that exclusionary zoning should be invalidated under the Takings Clause, more generally.

    We contend Euclid should be reversed or strictly limited, and that exclusionary zoning restrictions should generally be considered takings requiring compensation. This conclusion follows from both originalism and a variety of leading living constitution theories. Under originalism, the key insight is that property rights protected by the Takings Clause include not only the right to exclude, but also the right to use property. Exclusionary zoning violates this right because it severely limits what owners can build on their land. Exclusionary zoning is also unconstitutional from the standpoint of a variety of progressive living constitution theories of interpretation, including Ronald Dworkin’s “moral reading,” representation-reinforcement theory, and the emerging “anti-oligarchy” constitutional theory. The article also considers different strategies for overruling or limiting Euclid, and potential synergies between constitutional litigation and political reform of zoning.

    The paper is an example of cross-ideological collaboration. Josh Braver is a progressive and a living constitutionalist. I am a libertarian, generally sympathetic to originalism. We started discussing the issue of zoning after taking opposite sides of a debate over judicial review at the University of Wisconsin, sponsored by the Wisconsin chapters of the American Constitution Society and the Federalist Society. Although we differ on many other issues, we found that we agree on this one!

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    Ilya Somin

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  • Argentina, Once One of the Richest Countries, Is Now One of the Poorest. Javier Milei Could Help Fix That.

    Argentina, Once One of the Richest Countries, Is Now One of the Poorest. Javier Milei Could Help Fix That.

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    Argentina actually elected a libertarian president.

    Javier Milei campaigned with a chainsaw, promising to cut the size of government.

    Argentina’s leftists had so clogged the country’s economic arteries with regulations that what once was one of the world’s richest countries is now one of the poorest.

    Inflation is more than 200 percent.

    People save their whole lives—and then find their savings worth nearly nothing.

    They got so fed up they did something never done before in modern history: They elected a full-throated libertarian.

    Milei understands that government can’t create wealth.

    He surprised diplomats at the World Economic Forum this month by saying, “The state is the problem!”

    He spoke up for capitalism: “Do not be intimidated by the political caste or by parasites who live off the state…. If you make money, it’s because you offer a better product at a better price, thereby contributing to general well-being. Do not surrender to the advance of the state. The state is not the solution.”

    Go, Milei! I wish current American politicians talked that way.

    In the West, young people turn socialist. In Argentina, they live under socialist policies. They voted for Milei.

    Sixty-nine percent of voters under 25 voted for him. That helped him win by a whopping 3 million votes.

    He won promising to reverse “decades of decadence.” He told the Economic Forum, “If measures are adopted that hinder the free functioning of markets, competition, price systems, trade, and ownership of private property, the only possible fate is poverty.”

    Right.

    Poor countries demonstrate that again and again.

    The media say Milei will never pass his reforms, and leftists may yet stop him.

    But already, “He was able to repeal rent controls, price controls,” says economist Daniel Di Martino in my new video. He points out that Milei already “eliminated all restrictions on exports and imports, all with one sign of a pen.”

    “He can just do that without Congress?” I ask.

    “The president of Argentina has a lot more power than the president of the United States.”

    Milei also loosened rules limiting where airlines can fly.

    “Now [some] air fares are cheaper than bus fares!” says Di Martino.

    He scrapped laws that say, “Buy in Argentina.” I point out that America has “Buy America” rules.

    “It only makes poor people poorer because it increases costs!” Di Martino replies, “Why shouldn’t Argentinians be able to buy Brazilian pencils or Chilean grapes?”

    “To support Argentina,” I push back.

    “Guess what?” Says Di Martino, “Not every country is able to produce everything at the lowest cost. Imagine if you had to produce bananas in America.”

    Argentina’s leftist governments tried to control pretty much everything.

    “The regulations were such that everything not explicitly legal was illegal,” laughs Di Martino. “Now…everything not illegal is legal.”

    One government agency Milei demoted was a “Department for Women, Gender and Diversity.” DiMartino says that reminds him of Venezuela’s Vice Ministry for Supreme Social Happiness. “These agencies exist just so government officials can hire their cronies.”

    Cutting government jobs and subsidies for interest groups is risky for vote-seeking politicians. There are often riots in countries when politicians cut subsidies. Sometimes politicians get voted out. Or jailed.

    “What’s incredible about Milei,” notes Di Martino, “is that he was able to win on the promise of cutting subsidies.”

    That is remarkable. Why would Argentinians vote for cuts?

    “Argentinians are fed up with the status quo,” replies Di Martino.

    Milei is an economist. He named his dogs after Milton Friedman, Murray Rothbard, and Robert Lucas, all libertarian economists.

    I point out that most Americans don’t know who those men were.

    “The fact that he’s naming his dogs after these famous economists,” replies Di Martino, “shows that he’s really a nerd. It’s a good thing to have an economics nerd president of a country.”

    “What can Americans learn from Argentina?”

    “Keep America prosperous. So we never are in the spot of Argentina in the first place. That requires free markets.”

    Yes.

    Actually, free markets plus rule of law. When people have those things, prosperity happens.

    It’s good that once again, a country may try it.

    COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

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    John Stossel

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  • Video of Federalist Society “Seat at the Sitting” Panel on Upcoming Supreme Court Cases

    Video of Federalist Society “Seat at the Sitting” Panel on Upcoming Supreme Court Cases

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    Earlier today, the Federalist Society held a “Seat at the Sitting” online forum covering several cases the Supreme Court is about to hear. I participated, discussing two important takings cases: Devillier v. Texas (in which I have submitted an amicus brief) and Sheetz v. County of El Dorado. A full list of the participants and the cases covered is available here.

    The panel featured several perspectives you might not expect at a Fed Soc event. Prof. Christopher Walker (U of Michigan) argued that the Supreme Court should decline to abolish Chevron deference to administrative agencies in Loper Bright Enterprises v. Raimondo. Mark Rienzi (Becket Fund for Religious Liberty) argued the government should not get deference in a case challenging the placement on the “No Fly List” of a Muslim suspected of ties to a radical mosque. And Grover Joseph Rees, III, former General Counsel of the U.S. Immigration and Naturalization Service in a GOP administration, argued the pro-immigration side likely deserves to prevail in Campos-Chaves v. Garland,  case addressing the question of whether migrants received adequate notice of deportation proceedings.

    I have embedded the video below. My presentation begins around 55:20:

     

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    Ilya Somin

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  • Justice O’Connor’s parting dissents highlighted the twin perils of local tyranny and federal overreach

    Justice O’Connor’s parting dissents highlighted the twin perils of local tyranny and federal overreach

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    The month before Justice Sandra Day O’Connor announced her retirement in 2005, she dissented from Supreme Court decisions in two cases that illustrated the twin perils of local tyranny and federal overreach. O’Connor, who was appointed to the Court by Ronald Reagan in 1981 and died last Friday at 93, eloquently explained why property rights are especially important for people with little political influence and how state autonomy allows policy experiments that promote progressive as well as conservative goals.

    In Kelo v. New London, nine owners of homes in that Connecticut city challenged the use of eminent domain to take their property in the name of economic development. The five-justice majority agreed with the city that transferring property from one private owner to another can qualify as “public use” under the Fifth Amendment’s Takings Clause when it is expected to create jobs and boost tax revenue.

    O’Connor’s dissent began with a 1798 quote from Justice Samuel Chase, who cited “a law that takes property from A. and gives it to B.” as an example of legislation that is “contrary to the great first principles of the social compact.” Because the majority “abandons this long-held, basic limitation on government power,” O’Connor warned, “all private property is now vulnerable to being taken and transferred to another private owner” who plans to “use it in a way that the legislature deems more beneficial to the public.”

    As a result, “the specter of condemnation hangs over all property,” O’Connor wrote. “Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.” She added that “the beneficiaries are likely to be those citizens with disproportionate influence and power in the political process.”

    While Kelo involved a constitutional limit on local power, Gonzales v. Raich involved a fundamental constraint on the federal government: It cannot exceed the powers specifically enumerated in the Constitution. Two Californians, Angel Raich and Diane Monson, argued that Congress had done that by purporting to criminalize their medical use of homegrown marijuana, which was allowed by state law but forbidden by the federal Controlled Substances Act.

    Although Raich and Monson’s conduct was neither interstate nor commercial, the six justices in the majority nevertheless held that it could be reached under the power to regulate interstate commerce. “If the Court always defers to Congress as it does today,” O’Connor wrote in her dissent, “little may be left to the notion of enumerated powers.”

    That principle, O’Connor noted, is crucial to protecting “historic spheres of state sovereignty from excessive federal encroachment” and preserving “the distribution of power fundamental to our federalist system of government.” That system, she emphasized, “promotes innovation” by allowing states to experiment with new policies that might prove worthy of emulation.

    Although O’Connor was on the losing side in both of those cases, her positions were partly vindicated by subsequent political developments. The Kelo decision inspired many states to enact laws aimed at discouraging eminent domain abuse, and California’s experiment in marijuana reform has spread to three dozen states, most of which allow recreational as well as medical use.

    Since 2014, congressional spending riders have barred the Justice Department from interfering with the implementation of state medical marijuana laws. And in practice, the department, under both Democratic and Republican administrations, also has tolerated state-licensed businesses that serve recreational consumers.

    Still, the conflict between state and federal law at the center of Raich persists two decades later, continuing to handicap marijuana businesses by subjecting them to punitive taxation and limiting their access to financial services. And as George Mason law professor Ilya Somin notes, “Many states still have few constraints on eminent domain abuse.”

    Respect for federalism and property rights, in short, remains largely aspirational. But O’Connor’s parting dissents at least pointed us in the right direction by explaining why these putatively conservative principles deserve a defense across the political spectrum.

    © Copyright 2023 by Creators Syndicate Inc.

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    Jacob Sullum

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  • The Best of Reason: The Endangered Species Act at 50

    The Best of Reason: The Endangered Species Act at 50

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    This week’s featured article is “The Endangered Species Act at 50” by Tate Watkins.

    This audio was generated using AI trained on the voice of Katherine Mangu-Ward.

    Music credits: “Deep in Thought” by CTRL and “Sunsettling” by Man with Roses

    The post <I>The Best of Reason</I>: The Endangered Species Act at 50 appeared first on Reason.com.

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    Tate Watkins

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