Of property and antiproperty.

• Author: Bell, Abraham
• Position: Private property regime providing preservation incentives to both market participants and political representatives

INTRODUCTION

Private property is widely perceived as a potent prodevelopment and anticonservationist force. The drive to accumulate wealth through private property rights is thought to encourage environmentally destructive development; legal protection of such property rights is believed to thwart environmentally friendly public measures. Indeed, property rights advocates and environmentalists are generally described as irreconcilable foes. This presumed clash often leads environmentalists to urge public acquisition of private lands.

Interestingly, less attention is paid to the possibility that the government may prove no better a conservator than private owners. Government actors often mismanage conservation properties, collaborating with private developers to dispose of government property at submarket prices and encouraging inefficient development on conservation property. The federal Bureau of Land Management, for instance, came under tire in a recent congressional report for its sale of seventy acres of Nevada land to a private developer for $763,000; the developer sold the land the next day for $4.6 million. (1)

The reasons for potential government mismanagement of conservation lands should be familiar to public choice theorists. First, government decisionmakers are often influenced by the desire to extractrents. (2) Thus, decisionmakers may dispose of government properties at submarket prices in order to obtain benefits for themselves in their private capacities. (3) Conservation lands are particularly vulnerable to this phenomenon when they produce widely dispersed public benefits, but, if developed, would produce smaller, highly localized benefits. (4) Second, decisionmakers often fall prey to fiscal illusion, leading them to fail to account for public benefits or costs that do not appear directly in the government budget. (5) Together, these factors lead to a high likelihood that conservation properties will be mismanaged even in government hands.

Our project in this Article is to design a new private property regime capable of providing optimal preservation incentives to both market participants and political representatives. (6)

We begin with the observation that, notwithstanding the pressures to develop conservation land, not every park or open space on valuable land succumbs to such political pressures. (7) Central Park in Manhattan, for example, occupies some of the most valuable acreage in the world. (8) Yet, despite the enormous potential for commercial gains to politically influential developers, there is very little chance that the Park will be converted into luxury property. How does Central Park fend off its potential predators, while other greenbelts so frequently fall prey to the predations of urban development? (9)

The answer to this question, we posit, lies in an unrecognized but potent hybrid of de facto public and de jure property rights. Central Park is surrounded by luxury properties whose owners enjoy the amenities and views of the adjacent park. (10) Formally, the Park is owned by the public as open-access commons, and private owners have no formal property interests in it. Nevertheless, owners of real estate abutting the Park benefit in ways different than the general public. For the abutting owners, the Park is a lustrous front yard, a panoramic view, an acoustic barrier, and an air freshener. Adjacent property owners thus possess a de facto quasi-property interest of considerable value. This unique interest transforms the owners of property in close proximity to the Park into the Park's "public guardians," and parlays into a political force in favor of conservation by providing an incentive for these owners to protect the open space. (11) While the de facto easement is not absolute--abutting owners do not have veto power over nongreen uses--in some cases it suffices to block harmful development. (12)

Yet, at present, aside from extremely rare instances we discuss later, (13) the property interest can only be enforced through politics. Although this de facto interest displays the salient features of an easement appurtenant--it is a nonpossessory interest that attaches to particular parcels and runs with the land--the property owners have no formal legal claim. (14) Aggrieved adjacent property owners can only enforce their de facto interests by exerting their political influence; if their political influence falls short of blocking undesired development, as is often the case, the owners cannot assert any cognizable de jure property interest in the park's preservation in court. (15) As repeat players in the political process without significant coordination costs, developers generally have a leg up in the political arena. (16)

To remedy the political disparity, we propose to formalize the neighbors' de facto interests into full-fledged property interests. Such formalization would produce two desirable results. First, formal legal recognition of the neighbors' interests would enable them to press their anti-development claims in court. Second, and more importantly, formalizing the neighbors' interests into formal negative easements creates a new element in conservation of the threatened park: a network of antiproperty rights.

Antiproperty rights are veto rights over the use of an asset that are granted to a large number of private actors--so large a number, in fact, that due to holdout problems and transaction costs, it is highly unlikely that they will ever voluntarily aggregate to alter use of the asset. In our case, formalized negative easements (which we label antiproperty easements) in the hands of neighbors are likely to produce a regime in which it is practically impossible for unwanted development to threaten conservation of the defended property.

Our proposal to formalize antiproperty easements gives rise to several important insights--both practical and theoretical. First, and counterintuitively, we show that increased transaction costs can be a valuable policy response to market failures. The accepted lore among law and economics scholars has been that when transaction costs are positive, "the preferred legal rule is the rule that minimizes the effects of transaction costs." (17) We introduce a corollary: when transaction costs may not be minimized by legal rules, the solution maybe to consciously create additional transaction costs. Where transaction costs systematically bias the market in favor of one outcome, and it is too costly to eliminate the transaction costs, the best option for decision-makers may be to create countervailing transaction costs. (18) The Article thus points to a new way of resolving market flaws, applicable even beyond the context of conservation.

Our second insight relates to the literature on private property and commons. Existing theory recognizes three cardinal prototypes of property regimes: public, commons, and private property. (19) Public property, as we have discussed, may be prone to mismanagement due to political failure. Theorists have also identified a paradigmatic short-coming that plagues each of the latter two regimes: the tragedy of the commons (20) and the tragedy of the anticommons. (21) The former plagues commons property, leading to overexploitation of commons resources. No one owner fully internalizes all of the costs associated with the commons, so all users have an incentive to overuse. The tragedy of the anticommons, conversely, is emblematic of private property regimes. In an anticommons, "multiple owners are each endowed with the right to exclude others from a scarce resource, and no one has an effective privilege of use." (22) The result is that resources are underexploited. In this Article, we herald the existence of a fourth prototype that avoids the problems of mismanagement, overuse, and underexploitation: a hybrid conservation commons that incorporates aspects of the three pure regimes. We explain how the existence of a group of property owners that receives positive externalities from an asset often eviscerates the ordinary concept of commons, creating in its place a hybrid commons with elements of private property. (23)

Third, our analysis reveals a surprising symbiotic dynamic between private development on the fringes of green space and environmental conservation. Specifically, we show that public parks enhance the value of private properties abutting them, which in turn creates abutting owners' stakes in park preservation. (24) We harness this insight to provide a new blueprint for conserving open spaces in areas expecting aggressive and undesired development.

Fourth, and finally, we submit that formalizing antiproperty easements adds a legal dimension to the already-present political right, and creates the dynamic of Yes In My Back Yard ("YIMBY"). (25) The antiproperty easement provides the inverse of a nuisance suit; where nuisance allows proximate-property owners to counteract negative externalities affecting the enjoyment of their property, enforcement actions based on antiproperty easements can preserve positive externalities benefiting their property. The antiproperty easement thus permits the correction of inefficiencies created by externalities. Formalizing the easement allows the courts to become an additional arena (in addition to legislative, executive, and administrative bodies) in which abutting owners can fight to preserve the positive externalities produced by green space.

The Article proceeds in five parts. In Part I, we describe conventional theories that predict underprovision and overexploitation of parks and green spaces, and urge government intervention to resolve these difficulties. We then show how these conventional theories overlook the corollary problem of conserving parks and green spaces consequent to government intervention. Lobbying by developers may in many cases prompt the government to succumb to political pressure and permit development of previously...