The value of the right to exclude: an empirical assessment.

Author:Klick, Jonathan
 
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Property theorists have long deemed the right to exclude as fundamental and essential for the efficient use and allocation of property. Recently, however, proponents of the progressive property movement have called into question the centrality of the right to exclude, suggesting that it should be scaled back to allow the advancement of more socially beneficial uses of property. Surprisingly, the debate between the proponents and detractors of the right to exclude is devoid of any empirical evidence. The actual value of the right to exclude remains unknown.

In this Article, we set out to fill this void by measuring, for the first time, the value of the right to exclude. To that end, we use the passage of the Countryside and Rights of Way Act of England and Wales in 2000 as a natural experiment to provide empirical insight into this issue. We show that the Act's passage led to statistically significant and substantively large declines in property values in areas of England and Wales that were more intensively affected by the Act relative to areas where less land was designated for increased access. While property prices might not capture all social value, our findings provide a critical input to the debate regarding access to private property. Given that the access rights provided by the "right to roam" included in the Act represent seemingly minimal intrusions on private property, our findings indicate that property owners view even small restrictions on their right to exclude very negatively.

We believe that our findings are of significant importance to lawmakers in the United States, as they provide an empirical basis for policymaking in the realms of property and land use. In the United States, private property rights enjoy constitutional protection under the Takings Clause of the Fifth Amendment. Hence, any attempt to formalize a general right to roam or other intrusions on the right to exclude may require the government to pay just compensation to affected property owners. Our study suggests what the just compensation amounts are likely to be. This information would allow lawmakers to make better decisions about the social desirability of various land use measures. We would like to emphasize that our findings should not be read as a call against the adoption of a right to roam or any other public privilege. Our only goal is to furnish a needed empirical foundation that would permit lawmakers to conduct a more precise cost--benefit analysis of different policies.

INTRODUCTION

INTRODUCTIOK 918 I. THE RIGHT TO EXCLUDE AND ITS PLACE IN PROPERTY LAW 923 II. THE RIGHT TO ROAM 935 A. Theory 937 B. Law 940 III. THE EFFECT OF THE RIGHT TO ROAM ON PRICES 945 A. Research Design 945 B. Data 949 C. Empirical Ana(vsis- England 951 D. Empirical Analysis--Wales 957 E. Policy Implication 961 F. Fmpirical Limitations and Extensions 964 CONCLUSION 965 In one of the most famous sentences in the history of property law, William Blackstone described property as "that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe."(1) Importantly, in this statement, Blackstone did not advance an original conception of property. Nor was it a normative statement. Rather, Blackstone 's comment was descriptive. It accurately reflected the property conception that prevailed at his time.

Although Blackstone's view is often ridiculed by contemporary property scholars for being too extreme, when he originally offered it, there was nothing remarkable about it; it was neither radical nor revolutionary. In fact, the root of the property conception that puts the right to exclude at its core goes back to Roman law. Roman property law was organized around the principle of a single owner with a full dominion over an asset or a resource.(2) Furthermore, as Yun-chien Chang and Henry Smith observe in their comparative study of civil and common law property, even though the two legal systems grew out of very different traditions and use different property concepts,

ownership under the civil law and fee simple ownership of land in the common law system (and for the most part the respective notions of full ownership of personal property) coincide to a remarkable extent in their basic features: a possessory right to prevent invasions subject to qualifications such as for necessity, and supplemented by duties (for example, for lateral support or to shovel sidewalks). (3)

In the 1920s and 1930s, the primacy of the right to exclude to the understanding of property was challenged by the rise of the legal realism movement that endorsed and popularized the conception of property as a malleable "bundle-of-rights."(4) The realists advocated a non-monolithic, highly contextual and relational view of property and, chiefly, inveighed against the claim that property has any definitive conceptual characteristics. Yet, even notable legal realists such as Felix Cohen conceded that the right to exclude is indispensable to all property relationships.(5) Similarly, the Oxford philosopher A.M. Honore, who may have developed the definitive account of the "property bundle" by enumerating as many as eleven incidents that come under the definition of the term ownership,(6) is understood to have privileged the right to exclude.(7)

More importantly, the Supreme Court, while adopting the bundle of rights conception, has emphasized the centrality of the right to exclude in its rulings. For example, in Kaiser Aetna v. United States, the Supreme Court stated that the owner's right to exclude others from her land is "one of the most essential sticks in the bundle of rights that are commonly characterized as property"(8)

It is important to note at this point that the "bundle of rights" conception was not universally accepted. Many legal scholars(9) and philosophers(10) rejected it and, instead, steadfastly adhered to the traditional view that positioned exclusion at the center of our property system. Economists, too, have treated the right to exclude as the keystone right, explaining that it is essential to the efficient use of resources(11) and to the successful functioning of markets and the economy(12)

Recently, the right to exclude has come under another scholarly attack due to the rise of the "progressive property movement." Pioneered by Gregory Alexander, Eduardo Penalver, Joseph Singer, and Laura Underkuffler, and joined by many other prominent scholars, the progressive property movement presents a pluralistic view of property designed to accommodate and promote a myriad of incommensurable values.(13) While the view advanced by progressive property scholars has much in common with the writings of the legal realists of the 1920s and 1930s, there are important differences between the two movements. The focus of legal realism was mainly conceptual, while the ambition of the progressive property movement is unabashedly normative: it calls for the furtherance of such values as civil responsibility, environmental stewardship, life, human flourishing, autonomy, freedom, and "individual and social well-being."(14) Furthermore, the progressive property movement statement contains a call to change property law so as to "promote the ability of each person to obtain the material resources necessary for full social and political participation."(15) Yet, as Ezra Rosser explained, the gist of the progressive property concept is "to recognize more exceptions to the default rights of an owner to exclude, or put differently, to expand recognition of the public's interest in privately held property."(16) Accordingly, we refer to progressive property scholars as the "pro-access camp."

The alternative to progressive property can be dubbed exclusion essentialism, and it is central to the work of scholars such as Thomas Merrill and Henry Smith alone and together. Merrill and Smith do not value exclusion in its own right. Rather, they view it as an important organizing principle that enables parties to economize on information and transaction costs. The exclusion approach allows for delineation of clear rights and boundaries at a relatively low cost and as befits in rem rights that avail against the rest of the world. The economies achieved through exclusion enhance the value of resources and minimize the potential for conflict. Throughout this Article, we refer to champions of this approach as the "pro-exclusion camp."

Nowhere are the fault lines between the two camps clearer than in the context of the right to roam. The right to roam, also known as "everyman's right," permits the public at large to venture into private property for recreational purposes. In countries in which the right is recognized, private property owners are not allowed to bar members of the public from entering their land or from using it for recreation. The right to roam is of ancient provenance in the Nordic countries of Finland, Iceland, Sweden, and Norway, as well as in Baltic countries and Scotland. In 2000, it was codified in England and Wales, and, in 2003, it was enacted in Scotland. Celebrating this trend, Greg Alexander argued that willingness to recognize the right to roam could be used as a measure of the degree of democratization in a given society.(17) Taking a markedly more guarded approach to the issue, Henry Smith cautioned that "giving the right-to-roam stick to a neighbor or to the public affects the value of the remaining property."(18)

Remarkably, this crucial scholarly debate that engulfed the world of property remains, to date, purely theoretical. The arguments of each camp are completely devoid of empirical support. But what is the value of the right to exclude? How sensitive is the right to exclude to incursions of the type sanctioned by the right to roam, and how much value, if any, stands to be lost if the right to roam is formalized?

In this Article, we exploit the passage...

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