Archive for October, 2009

Norwood, Ohio, Redevelopment Project Down the Tubes

Saturday, October 31st, 2009

         Remember City of Norwood v. Horney, 853 N.E.2d 1115 (Ohio 2006)? Of course you do. That was the case in which the Ohio Supreme Court held that inasmuch as under the U.S. Supreme Court’s Kelo holding it was free to fashion state right-to-take criteria in ways that are more protective of citizens’ rights than under the U.S. Constititution as interpreted by the U.S. Supreme Court, it would refuse to follow Kelo and would deny the City of Norwood the right to take Horney’s home for a new $125 million mall. Eventually, Horney settled with the redevelopers who paid him $1.25 million for his home (ten times more than what was originally offered). You can read all about it in Gregory Korte, Last Rookwood House Tumbles, Cincinnati.com, October 30, 2009.

           That was in 2008. So what has been happening in Norwood, as far as this redevelopment project is concerned, since then? We’re glad you asked. The answer is: nothing. The Cincinnati Enquirer on-line service reports that the Horney home has been torn down along with a couple of others that still remained on the project site, but nothing has been built in their stead.

          The would-be redevelopers are quoted as saying that they remain interested in developing the site when the economy rebounds. Which once again goes to prove our point that there is nothing “public” about the use of eminent domain for redevelopment projects that simpy tear down existing neighborhoods and replace them with commercial enterprises like malls, office buildings, car dealership and gambling casinos. Like all other business ventures, these developments carry a risk of failure when the econony tanks (or for other reasons) and therefore public funds should not be placed at risk  in this fashion. If the would-be redevelopment project is such a good deal financially, let the redevelopers risk their own money in pursuing it, and not put public funds at risk. 

In Detroit, You Can’t Give ‘Em Away

Monday, October 26th, 2009

         We blogged about the decline and fall of Detroit on October 1st ( http://gideonstrumpet.info/?p=305 ), and now there is a follow-up. Forex News ( www.xe.com/news/2009/10/25/757525.htm?c=1&t=100 ) reports that Wayne County, where Detroit is located, has put up for auction some 9000 Detroit homes that have been abandoned by their owners, and seized by the county for taxes. But though prices may have been at rock-bottom it was no fire sale:

“After five hours of calling out a drumbeat of ‘no bid’ for properties listed in an auction book as thick as a city phone directory, the energy of the county auctioneer began to flag.” * * * “On the auction block in Detroit: almost 9,000 homes and lots in various states of abandonment and decay from the owner-occupied to the burned-out shell claimed by squatters. * * * Taken together, the properties seized by tax collectors for arrears and put up for sale last week represented an area that the Detroit Free Press estimated was the size of Boston, Massachusetts.”

          And that, folks, is the condition of the city that pioneered urban redevelopment, and that pushed it to its all-time lows when it infamously condemned the unblighted, middle class Poletown neighborhood in order to raze it and turn over its site for a song to General Motors for a new Cadillac plant, which didn’t work out either.

          On a closely related subject, check out Dan Barry, Amid Ruin, Seeing Hope In a Garden, N.Y. Times, October 19, 2009, at p. A12, describing a similar disaster in Flint, Michigan, whose population has declined from 200,000 in 1960, to 110,000 today, and where the upbeat story the N.Y. Times could muster is that some of the remaining Flint residents are growing vegetables on lots where homes once stood.

Follow up. Also see Lisa Gribbs, Is This a $6,900 Bargain, Money, Nov. 2009, at p. 98, for a discussion of Detroit’s four-figure foreclosed or abandoned “bargains.”

Second follow up. The Wall Street Journal reports that there is a bright spot of sorts in Detroit. While everything there is tanking, local casinos aren’t doing too badly. Revenue is off only 2% from a year ago (as compared to 14% in Atlantic City and Las Vegas). A.D. Pruitt and Sharon Terlep, Detroit Casinos Fare Surprisingly Well In Tough Times, Wall Street Journal, October 30, 2009, at p. B1.

Third follow up. Check out Bob Herberts’ column in the New York Times, of November 21, 2009, at p. A17, lamenting the decline of Detroit, and predictably calling for a “revitalized industrial policy.” Not a word about the last few decades’ land use policies and their role in the emptying out of American cities. That column is the subject of a major NY Times Opinion blog. Go to www.nytimes.com/opinion/ 

Stadiums Again — The “Exceptional” Environmental Free Lunch

Thursday, October 22nd, 2009

          As is made painfully (and expensively) clear to anyone trying to build a major project in California, there has to be compliance with environmental regulations. It’s the law, folks, and it takes precedence over human needs. So what if the Central Valley farmers (and their increasingly-unemployed farm workers) have to take it in the chops for the sake of environmental benefits to some dorky little fish in the Sacramento Delta? See The Economist, October 28, 2009  http://www.economist.com/displayStory.cfm?story_id=14699639  So what if we have to tear down perfectly functional hydroelectric dams producing clean energy? It’s all a worthwhile sacrifice for the Environment, don’t you know. So say our betters. Like when you make an omelette you gotta crack eggs.

         But now it appears that all that pain that is so nobly inflicted in the cause of protection of the Environment can be forgone when a local billionaire wants to build a new NFL Stadium. As we had occasion to blog recently ( http://gideonstrumpet.info/?p=303 ) a new NFL stadium  is planned for the Los Angeles area, in City of Industry. This is such a wonderful thing, we are told by our betters, that environmental laws have to be set aside to facilitate its speedy construction. In his recent column in the Los Angeles Times, Tim  Rutten waxes orgasmic about the virtues of the project and the thousands of union jobs it will provide. See One-of-a-Kind NFL Stadium, L.A. Times, October 21, 2009. http://www.latimes.com/entertainment/la-columnist-rutten,0,3798015.columnist

         Upon being informed of the need to get on with the program stadium-wise, the California legislature all but clicked its heels, shouted “Jawohl!” to our Governator, and passed the legislation in question, exempting that stadium from environmental laws. Mr. Rutten thinks that doing so is wonderful. He says that disregarding environmental laws in this case will advance both the letter and spirit of environmental regulation. Say what?! Your faithful servant did a double take on this one. Disregarding environmental laws complies with and advances their letter? Did Rutten really say that? Yes indeed; we didn’t make it up. It’s all there in living black-and-white in Mr. Rutten’s column. Actually, if you think about it, there is precedent for this sort of reasoning. It was revealed to us during the Vietnam war when it famously became necessary to destroy a village in order to save it. Same here. Environmental laws had to be disregarded in order to comply with them. 

          Of course, all these legislative deeds of derring do give rise to a sticky wicket. As a society, if you’ll pardon our use of that tiresome cliche, we are committed to equality of treatment. If this particular project gets an exemption from environmental laws, don’t we have to extend similar treatment to other projects laying a similarly arguable claim to being ”exceptional”? Good question. The L.A. Times provides no answer to it, except for Mr. Rutten’s confident assertion that this stadium’s exceptionalism simply has to be rewarded by granting its sponsors the privilege of disregarding environmental laws. Just what makes it so exceptional remains unclear. You will just have to take it on faith — it is sufficient that it says so in the Los Angeles Times, so it must be so. 

         The legislators swear that this will be the onliest time for suspending the environmental laws, and all but shout “Never again!” We have no basis for questioning the sincerity of their intentions, but don’t they have to comply with the concept of equal protection of the laws? You know, like it says over the entrance to the U.S. Supreme Court — “Equal Justice Under Law.” If California environmental laws can be suspended ad hoc for the benefit of a billionaire developer of a football stadium, then why not  for the benefit of others with a similar or even superior claim of doing good? Like competing stadiums maybe? Or the construction of a badly needed, non-profit hospital? Would the latter be able to lay claim to the same ”exceptionalism,” or would those life-saving sons of Aesculapius have to knuckle down and comply with expensive and time-consuming environmental laws?

          So stay tuned and see how it all turns out. Being of a cynical bent when it comes to major public project financial projections, we entertain some doubts as to whether in the end this stadium will actually be cost-free to the taxpayers, as Mr. Rutten assured us in an earlier Los Angeles Times column. Possibly, the Easter Bunny will pay for all the infrastructure needed for that stadium. But we tend to doubt it.

Follow up. Don’t miss the two op-eds in today’s Los Angeles Times. In one, Alan Lowenthal, a memeber of the state Senate Environmental Quality Committee, laments the disregard of environmental laws in the cause of building this “unique” stadium. http://www.latimes.com/news/opinion/commentary/la-oe-lowenthal29-2009oct29,0,5183306.story  He points out with unassailable merit that “There was absolutely nothing unique about this project, other than the fact that it was championed by an influential developer and backed by powerful labor unions.”

         In the second one, Dave Zirin, points out that there is no team that has committed to use this stadium, so it’s a hoped-for case of if-you-build-it-they’ll-come. If There Is No Team, It’s Bonkers to Build a Stadium, L.A. Times, Oct. 29, 2009, at p. A31 –   see  http://www.latimes.com/news/opinion/commentary/la-oe-zirin29-2009oct29,0,5453451.story . Maybe and maybe not. Zirin’s other astute point is that if this stadium is actually built, several other football teams in other locations, will be in a position to put pressure on their local governments and demand more financial goodies from them, threatening to pick up their marbles and move to the — ta, da! — City of Industry.

Tomorrow – Big Day, or Same Old, Same Old?

Tuesday, October 13th, 2009

         Tomorrow, October 14, 2009, is when the New York Court of Appeals will hear oral arguments in Goldstein v. New York Urban Development Corp., which is the state court version of Goldstein v. Pataki (the federal case that unsuccessfully challenged the condemnation of land for the infamous Atlantic Yards redevelopment project in Brooklyn). For a summary of the issues, see our fellow blogger’s assessment at  www.inversecondemnation.com

         This is supposed to be a big deal — a chance for New York’s highest court to reform the unspeakable state of New York’s right-to-take law, under which anything and everything for which the city wants to take private property is judicially rubber-stamped as a “public use.” Possibly, the New York Court of Appeals may come to its senses, or regain its moral compass and hold that whatever Bruce Ratner’s Atlantic Yards mega-development may be, isn’t a public use. But we aren’t holding our breath. We hope to be pleasantly surprised, but we don’t expect much from the judiciary that in the past deemed the best land in Manhattan, located on Central Park South, to be “blighted” because Robert Moses wanted it for some fershluggener project of his. Still, hope springs eternal, and like Charlie Brown who every year hopes that Lucy will hold the football for him, and that he will be able to kick it, and not wind up on his little keester when she snatches the ball away at the last moment, your faithful servant is willing to be pleasantly surprised, though he isn’t counting on it.

         Procedural note: Along with many other weird attributes of the New York court system, they have a weird nomenclature. The Court of Appeals is that state’s highest court, what everybody else, except for Maryland, would call the Supreme Court. What New Yorkers call the Supreme Court is a trial court — the lowest court of general jurisdiction — what in other places would be called the Superior Court or the Circuit Court. And what about New York’s intermediate appellate court? We’re glad you asked. It’s called the Appellate Division of the Supreme Court. Go figure. 

         So we look forward to tomorrow’s judicial festivities in New York with the same eager anticipation that one might muster for the next performance at the Circus Maximus, where the Christians got a better break from the lions than condemnees get from New York judges. At least those lions left the Christians alone when they were full, but in New York the local machers’ appetite for other people’s property is insatiable.

         So stay tuned.

Update. For the latest related development, a new lawsuit challenging New York MTA’s sale of its land to Bruce Ratner, see the New York Times article by Charles V. Bagli, entitled Suit Challenges Sale of Land to Atlantic Yards Developer, October 13, 2009.  See, http://cityroom.blogs.nytimes.com/2009/10/13/suit-challenges-sale-of-land-to-atlantic-yards-developer/

Dams — Another View

Monday, October 12th, 2009

         Even as we here in the good ol’ U S of A are beginning to tear down hydroelectric dams, others are building them to address energy problems. Today’s Wall Street Journal (October 12, 2009, at p. A8) carries an advertisement by the government of Georgia (the country, not Jimmy Carter’s home base), bragging that the world’s second greatest reserves of hydroelectric energy are in the Caucasian mountains and that 80% of them remain untapped. Georgia, it says, is an exporter of electrical energy, and it is a country “where getting a construction license takes just three months.”

Supreme Court Follies – Oral Arguments

Sunday, October 11th, 2009

Los Angeles Daily Journal

 PERSPECTIVES •October 9, 2009, p. 6 

JUDICIARY

 Oral Arguments, or Theatrical Performances?

By Gideon Kanner  

There are things in life that people just don’t like to mess with, like the human vermiform appendix, for example. It performs no significant physiological function, and is said to be a vestigial organ that has lost its original function. Still, no one wants to undergo an appendectomy just to get rid of it. It’s sort of like that with oral argument in the appellate courts these days.

Maybe in the past, when courts were “cold,” when judges did not read the briefs before taking the bench, oral advocacy may have been decisive. Now, with “hot” judges, who have read the briefs and are prepped by clerk-written pre-argument bench memos, it’s another story. Oral arguments may be interesting and at times informative, but as experienced participants in the process agree, they do not affect the outcome of cases, though they may affect a court’s reasoning. The incidence of cases in which an appellate court changes the intended outcome after hearing oral arguments, is measured in events per lifetime. In my own case, after spending some 40 years or so as an appellate lawyer, I can think of only one, maybe two, cases in which the outcome was determined in oral argument.

Nonetheless, as all newspaper readers know, oral arguments before the U.S. Supreme Court are treated as a big deal, and the “First Monday in October” can at times assume some of the attributes of a Circus Maximus. Case in point: Justice Sonia Sotomayor’s recent maiden voyage – you should pardon the expression – as participant in oral arguments before the U.S. Supreme Court. According to the Los Angeles Times (David G. Savage, Sotomayor Takes Vocal Role on Her First Day, Oct. 6, 2009), in the course of one hour, she asked 36 questions of the hapless lawyers trying to argue their case. And that wasn’t all. Justice Antonin Scalia, no slouch in the question-asking department himself, asked 30 questions during the same time. Which, with all due respect to their Lordships, is a case of overdosing on questions. Big time.

After reading this bit of news, I scurried to my calculator, which revealed that if you take the total number of minutes in an hour and divide it by the number of questions asked during that time, that comes to a question every 54 seconds. This assumes that none of the other justices asked any questions. Not even Justice Ruth Bader Ginsburg or Justice Stephen G. Breyer. Though, as the late Frederick Bernays Wiener counseled in his treatise, “Rejoice when they ask questions. At least it shows that you haven’t rendered them comatose,” this is way too much of a good thing. Not exactly an atmosphere that is conducive to a lawyer’s structuring and presenting a coherent, organized oral argument.

Having labored in the appellate vineyards for some 40 years and having thus acquired the requisite experience (along with the inevitable professional scar tissue) I submit that what went on here, whatever it was, was not an appellate oral argument, but more of a theatrical performance for the benefit of the press.

You could say that, in spite of its growing prominence in the news, oral argument before the U.S. Supreme Court is losing its appeal. Why? Because there, as in other appellate courts, cases are decided on the briefs, not on the basis of lawyers’ forensic performances. No matter how smart they may be, the Justices are incapable of reducing the complexities of a case worthy of Supreme Court review to a few questions, and in the end they have to base their decision on the contents of the briefs and their clerks’ memos.

Nor are the lawyers capable of providing proper answers in a matter of seconds. The issues before the High Court are often sophisticated, and do not lend themselves to being dealt with by ad hoc responses to whatever may have popped into their Lordships’ minds during oral argument. Add to that the fact that the Justices can be something less than models of politesse when it comes to interrupting, not just the lawyers’ train of thought, but each other, and jumping from topic to topic with no rhyme or reason, and the overall performance may be more in the nature of a doctrinal goulash than a respectful conversation between court and counsel trying to address a difficult issue of law.

Then there is the matter of varying degrees of judicial preparation. Thus, in Agins v. City of Tiburon, I stepped up to the plate and began arguing, only to have one of their Lordships ask: “Where is the complaint?” I knew then and there that it was not going to be one of my better days. That’s how one acquires that professional scar tissue. On the other hand, sometimes, the Justices’ understanding of a case can be superlative. I’ll never forget the time when, in City of Monterey v. Del Monte Dunes, Justice Anthony M. Kennedy informed the unfortunate city lawyer that he (Kennedy) had read the transcript of jury arguments (which was not designated as part of the record) and thus knew that the lawyer was now arguing contrary to what he had told the jury. Ouch! At other times the degree of judicial preparation and understanding may fall short of so lofty a standard.

This implies no disrespect. After all, judges decide all sorts of cases and are therefore generalists who may not be at home in all areas of the law. In the normal course of events, they may know all about the niceties and vagaries of search and seizure and abortion law, but not necessarily the law of variances.

So does all that mean that I am opposed to oral argument? Heavens, no. Oral argument, like other solemn ceremonies, has an important purpose. It serves the vital function of putting a visible human face on the institutions that dispense justice to the citizenry. It may not be decisive of individual case outcomes, but it regularly serves as a way of correcting judicial misapprehensions about the content of the record, and subtleties of the pertinent law, thus improving the judicial end product. These are valuable things to lawyers, litigants and to society at large that can enhance both the litigation process as well as its outcomes.

But even so, what happens before the Justices these days can be a bit much, and its prominent treatment by the press misinforms the citizens as to the workings of the important institution that is the Supreme Court of the United States. A little self-restraint may be in order, not only on the part of the press but also on the part of the Justices. Lawyers who argue these cases have often lived with them for years and know more about them than the Justices. So assuming a modicum of skilled appellate advocacy on their part, letting the lawyers have a little more leeway in oral argument, without being constantly interrupted and hectored from the bench by folks who, truth to tell, may or may not fully understand the subtleties of the controversy at hand, is not a bad idea. If a case is important enough to take up the Supreme Court’s limited time and resources, it should be important enough to be heard properly.

Gideon Kanner is professor emeritus at the Loyola Law School, and of counsel to Manatt, Phelps & Phillips. He is past president of the California Academy of Appellate Lawyers.

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© 2009 Daily Journal Corporation. All rights reserved.

The Ripeness Mess Revisited, or, Is There Life After Death?

Thursday, October 8th, 2009

         We note two important inverse condemnation opinions that have just come down from the U.S. Court of Appeals for the 9th Circuit. They are Guggenheim v. City of Goleta, 2009 U.S. App. LEXIS 21313, filed on September 28, 2009, and Los Altos El Granada Investors v. City of Capitola, 2009 U.S. App. LEXIS 22044, filed on October 7, 2009. They deal with takings claims arising from mobile home park rent control ordinances, they hold the ripeness requirement to be prudential rather than jurisdictional, and they reach the merits of the taking claims, holding in favor of the plaintiff-owners. 

         Guggenheim bases its decision on the fact that the rent control ordinance in question effected a transfer of nearly 90% of value from the mobile home park owners to their tenants, thus constituting a taking. The real significance of this case lies in the court’s thorough analysis of the ripeness doctrine that has so often prevented aggrieved property owners from having their federal constitutional claims determined either in federal court, or at all.

          The gimmick used to accomplish this astonishing result, has been to begin with the rule of the Williamson County case that requires the owners to sue first in state court, with their federal claim being deemed unripe until after the state courts deny them compensation. But then, after the owners have duly jumped through this procedural hoop and litigated their taking claim in state court, federal courts would dismiss their now-ripe federal claim on the grounds that the state court adjudication against them was res judicata. The result was that their otherwise perfectly good federal constitutional claim became barred at the very moment it became ripe for adjudication in federal court. You can read all about it, if you have the stomach for it, in Michael M. Berger and Gideon Kanner, Shell Game! You Can’t Get There From Here: Supreme Court Ripeness Jurisprudence in Takings Cases at Long Last Reaches the Self-Parody Stage, 36 Urban Lawyer 671 (Fall 2004). 

          The Los Altos El Granada case, deals with the property owners’ right to reserve their federal claims for decision by federal courts, when they have to sue first in state court. In this case the California State Courts had the effrontery to strike the owners’ reservation of their federal rights, deeming it “irrelevant,” and thereby purporting to deprive the federal courts of their ability to hear the owners’ federal claims. Nothing doing, held the U.S. court of appeals – the state courts’ action in doing so could not deprive the federal courts of their jurisdiction, and therefore was of no effect. 

          Both these cases are elaborately reasoned, and we recommend that readers interested in regulatory inverse condemnation law, particularly in its procedural aspects, read both these opinions with care.

Update: For commentary on this development, see the inversecondemnation.com blog by Robert Thomas. You can get to it at http://www.inversecondemnation.com/ – see the post of October 7, 2009.

The Bubble. Who Done It?

Thursday, October 8th, 2009

          We recently came across a paper by Randall O’Toole, in which he argues that the housing bubble was largely caused by growth control regulations. He points out that places without it did not experience the extreme sort of bubble collapse like what occurred in California and Florida. See Randal O’Toole, How Urban Planners Caused the Housing Bubble, Cato Institute, Policy Analysis 646, October 1, 2009. See  http://www.cato.org/pub_display.php?pub_id=10570 

          Sounds reasonable to us, and O’Toole is not the first one to note this.  The phenomenon of stringent land-use regulation causing large, rapid increases in housing prices, notably in California, was described by William A. Fischel, an economist from Dartmouth, in his book REGULATORY TAKINGS: LAW ECONOMICS, AND POLITICS (Harv. U. Press 1995), particularly in Chapter 6, entitled Capitalizing on Land Use Regulations: Evidence from California, pp. 218-252. Check it out.

          Our favorite part of O’Toole’s piece is his recollecton of the 2005 statements by Alan Greenspan and Ben Bernanke to the effect that there was no bubble and that one did not need to fear its bursting, although Greenspan fudged a bit by taking note of some “froth” in the economy. Froth, as you will recall, is a bunch of small bubbles.

Afterthought. We should mention that two Presidential Commissions on Housing also concluded that the NIMBY phenomenon has been a factor in limiting housing supplies, thus contributing to the rise in the cost of new homes.

Rent Control Loony Tunes

Sunday, October 4th, 2009

  

The justification for rent control laws is that free market rents are too high, low-income tenants can’t afford them, and therefore it is necessary for government regulators to step in, impose limits on what landlords can charge, and thus provide affordable housing for people of limited means. Nowhere is this rationale more strongly espoused than in case of mobile homes which are usually occupied by low-income folks who are hard put to keep a roof over their heads. Of course, the way rent control works, the government doesn’t do a thing for those poor folks. Rather it forces their landlord to become an involuntary subsidizer of mobile home rents. No one has explained why – if providing housing for the poor is a proper government function – the government can evade its moral duty to do so, and force a private individual to go into the charity business by providing housing below the prevailing market rate at his expense. But that’s an issue for another time.

 The subject at hand is the brand-new, humongous Ninth Circuit opinion in Guggenheim v. City of Goleta, Docket No. 06-56306 that just came down, which is noteworthy for two things: first and foremost, believe it or not, the landlord won a taking claim. Yes sir, we kid you not. The U.S. Court of Appeals for the Ninth Circuit found the Goleta rent control ordinance to be a taking of the landlord’s property. Second: the opinion is a tour de force of intellectual navigation through the thickets, shoals and reefs of what passes for ripeness law. We won’t attempt to explain that aspect of the opinion here – we leave that task to people who get paid for doing so, or otherwise feel that they must talk about it. If you have an interest in the subject of regulatory takings in general and in rent control in particular we recommend that you sit down, have a stiff belt of your favorite alcoholic beverage and have at it. Our fellow blogger, Robert Thomas, has already heralded the arrival of this opus, and you may want to take a look at his admittedly preliminary cut. See http://www.inversecondemnation.com/inversecondemnation/2009/09/new-ninth-circuit-case-mobile-home-rent-control-ordinance-takes-property.html  

The Guggenheim opinion is not unanimous. Judge Kleinfeld dissented, arguing primarily that the action was brought too late. But Judge Kleinfeld has provided us with an inadvertent demonstration of just how loony rent control can get. Mobile homes are not really mobile – once transported to their site in a mobile home park and plopped down on a pad, they are rarely moved again. Nine out of ten stay put for life. So what that means is that when a mobile home owner (who is a tenant of the piece of land on which his “coach” rests) moves, he sells the “coach” to the person who takes his place. Ah, but if the mobile home park is subject to rent control, that means that the new guy would get to occupy a dwelling that in a free market would cost a lot more to occupy than the much lower controlled rent that the landlord is allowed to charge. The right to do so can be worth a lot. So the seller of the “coach,” being no dummy, insists on a premium reflecting the bonus value of occupancy at low, controlled rents. So he sells the “coach” to the new occupant for an inflated price that by far exceeds its value or even the cost of a brand new one, the additional money thus charged being the price of the new guy’s advantageous right to live there at a below-market rent. The way the economists put it, this process  “monetizes” the rent advantage when the seller and buyer of the “coach” go through the fiction that this extra money is for the “coach,” not for the rent advantage.  

That brings us to the absurdity of mobile home rent control. While rent control may provide an advantage or a windfall to the original mobile home park tenants whose “coaches” are already in place when the rent control ordinance becomes effective, any subsequent mobile home occupants have to pay, not only the controlled future monthly rent after they move in, but also the monetized value of the future rent advantage, payable in a lump sum up front. That is what the agreed-upon, high “price” of the coach is all about. Got it?

 So as far as all mobile home occupants, save the original ones, are concerned, the rent control ordinance does them no good whatever. What they save on rent, they pay as the price of the “coach” which they must buy if they want to become occupants of the mobile home park. In other words, as to the subsequently moving in tenants it’s a zero sum game. So the money that by rights should have gone to the landlord as rent, now goes to the moving-out tenant as the inflated price of the “coach.” 

Judge Kleinfeld’s dissent in the Guggenheim case, as well as te majority opinion to which he alludes, demonstrate just how wacky these things can be. He points out that without rent control, a “coach” in the subject mobile home park would sell for $14,037, but with the rent control ordinance in place it goes for $105,054 – which, of course any new tenant moving into the mobile home park has to pay to his predecessor in interest. So the landlord and the new tenant both get ripped off, while the tenant who is moving out gets to pocket a hundred grand or so. How $weet it is. 

Pardon us folks, but being of limited intellectual resources and thus easily confused by the reasoning of our betters, we can’t help asking: This is rent control? This is how the poor folks who have to live in mobile home parks are protected from high rents? By being forced to pay an exorbitant price for an old, used mobile home (that in some cases may be so old and junky that it has to be scrapped and replaced with a new one)? Wouldn’t it make just as much (or more) sense to scrap mobile home rent control altogether since it manifestly does not control rents? 

Requiem for Detroit — It’s Official

Thursday, October 1st, 2009

In case you haven’t done so already, check out the cover story in the October 5, 2009, issue of TIME magazine, entitled “The Tragedy of Detroit,” at p. 26. It describes the decline and fall of Motor City, from its 1950s status as a prime American industrial metropolis to its present condition as a decaying slum, whose population has largely fled to the suburbs, or moved elsewhere altogether. Of course, as is customary, TIME concludes on an upbeat note, pontificating on what it believes should be done to restore Detroit to its former glory. But it’s all sort of like the fable about the mice deciding how to bell the cat — there is a clear understanding of what needs to be done but no explanation as to just how to accomplish it.

Also noteworthy is a one-page column by John Huey, Editor-in-Chief of TIME, who promises to stay on the story to explain the “misunderstood, underreported, stereotyped, avoided and exploited” Detroit. Rots of ruck, Mr. Huey. What he does not seem to appreciate is that one major cause of Detroit’s decline and fall has been the government policy that at least since the 1940s post-war period has encouraged and de facto bribed city dwellers to move to the suburbs. To say nothing of the urban riots of the 1960s and the disastrous government policies of the 1970s, that fostered a rise in urban crime, the catstrophic decline in the quality and safety of urban schools (including forced student bussing), and, of course, urban redevelopment that over the years tore down millions of urban dwelings, and replaced them, if at all, with downtown office high-rises and shopping centers. Even apart from economic considerations which made living in the suburbs more lucrative, all these factors drove urban dwellers out of cities. This was true not only of Detroit, but also of Flint, Camden, Buffalo, Cleveland, Newark, Bridgeport, St. Louis, Kansas City, Philadelphia and others which, though not as bad as Detroit, are in similarly bad shape for similar reasons.

We commend three books to our readers: Bernard Frieden and Lynn Sagalyn, “Downtown, Inc. – How America Rebuilds Cities,” Jane Jacobs’ acclaimed “The Death and Life of American Cities,” and David Frum’s, “How We Got There – The 1970s.” The first one deals with the physical destruction of city neighboprhoods in order to build malls, the second one explains the politics and economics of the cities’ metamorphosis, or more accurately, their decline, and the third one tells the story of cultural decline that provided powerful incentives for urban dwellers to move out of cities.

We blogged about these things, most recently in America’s Emptiest Cities, September 21, 2009, http://gideonstrumpet.info/?p=300   Check it out.


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