State Approaches to Protecting Private Property Rights

Introduction 

Background. Over the last year I have supervised a research project on the impact of state-based private property rights legislation. This project has been conducted under the auspices of and with funding from the relatively new North American Program of the Land Tenure Center at the University of Wisconsin-Madison. This Program was established with funding from the Ford Foundation, the W. W. Kellogg Foundation, and the Otto Bremer Foundation for the purpose of examining the changing nature of land and natural resource ownership in the North America, and to conduct research and public education about these changes. I help to coordinate the Program, specifically the sub-area of social cultural conflict over land and natural resources. 

The research project selected seven states for detailed examination. These states were selected because they represented both geographic diversity within the U.S., and diversity of type of private property rights legislation. 

Types of State Legislation. State-based private property legislation comes in three basic forms: assessment laws, compensation laws, and conflict resolution laws. Assessment laws require a designated government office to conduct assessments of proposed legislation, rules and regulations to determine how it will impact private property rights. These laws are built upon the model of environmental impact assessments, and are referred to by their proponents as "look before you leap" bills. Compensation laws require that private property owners be compensated when governmental laws impose a burden on their property (reduce their property value) by a predetermined percentage. Conflict resolution laws set up a formal process for negotiation among aggrieved parties, sometimes through the establishment of a new office for conflict resolution, whereby impacts on private property rights can be discussed and hopefully resolved to the satisfaction of all concerned. 

Extent of State Laws. The number of bills and states which have passed these laws varies somewhat based on how and what you count. Emerson and Wise (1997) offer up a set of 25 states that have passed these laws between 1991 and 1996. These states are concentrated in the plains and mountain sections of the country, though the states vary from Maine to Florida, and Rhode Island to Washington. Emerson and Wise identify 17 states that have passed assessment laws (including Arizona and Washington which later had them repealed by referendum, though Arizona then passed another law), and 6 states that have passed compensation laws (including Washington that later had it repealed by referendum). None of the laws predate 1991, and most have been passed in the last two to three years. 

States in National Study. Seven states were selected for this study: Arizona, Florida, Kansas, Maine, Mississippi, Montana, and Wisconsin. Six of these seven states (all except Wisconsin) have adopted some form of private property rights legislation. Arizona has a conflict resolution law, Florida a compensation and conflict resolution law, Kansas an assessment law, Maine an assessment and conflict resolution law, Mississippi a compensation law, Montana a conflict resolution law, and Wisconsin a proposed compensation law. Researchers in and/or familiar with these states prepared commissioned papers on the impact of the laws in their designated state. This included an examination of the law in the context of the state's constitutional and administrative framework, and interviews with representatives of key interest groups concerned with and/or affected by the law. Then, this past month, in August, a workshop was held in Madison, Wisconsin for the individual researchers to present their work to each other, and for us to piece together a national picture from the puzzle of individual states. Thus, what I am presenting today is very much a work in progress; the final results will probably not be available for another six months. 

The Impacts of State-based Laws: Five Points 

At this early stage five points can be drawn from this research about the impacts of state-based private property rights laws. 

One, on the whole not enough time has passed since the laws have been passed to really know what their impact will be. Many have been in place only a year or two, and in some cases their implementation was delayed until this year. So, in a very real sense, it is too early to tell whether they are going to have much of an impact, if that impact will be positive (as their proponents expect it be), negative (as their opponents hope it will be), or more muddled and situational (which is more likely). 

Two, there seems to be little relationship between the adoption of state-based laws and the existence or non-existence of on-the-ground problems in a particular state. That is, at the national level the private property rights movement is informed by a set of "horror" stories about the supposed abuse of administrative and regulatory power that comes from the implementation of a set of selected federal laws, specifically the Endangered Species Act, and section 404 of the Clean Water Act (relating to wetlands). In many of the states in this study, and other states that researchers were aware of, there were no particular parallel abuses that appeared to prompt the introduction these laws. 

Three, there are a set of states where the existence of these laws appears to have no impact whatsoever. For example, in Kansas (an assessment law state) and Mississippi (a compensation law state), researchers associated with this project were among the first to make inquiries about the law to state agencies responsible for them, and many of the interest group representatives knew little and seem to care little about the laws. That is, in a selected set of states these laws appear to irrelevant to what is going on politically and administratively. 

Four, in a few states, where development pressures are strong and administrative practices by government can act to significantly curb private property right values, such as Arizona and Florida, the existence of private property laws has had a chilling effect on the development of law, rules and regulations. This effect means that existing laws, rules and regulations move towards being frozen in place, because the administrative structure is uncertain about the impact of the private property rights laws, and finds it easier to do nothing than to do something and find itself subject to the new law's provisions. The impact of this is that the administrative structure may find itself unable to respond flexibly to new situations, conditions and technology and thus will become literally stuck. 

Fifth, and finally, the state-based laws may be having the opposite effect intended by their proponents. That is, in those states where they are not being ignored, if the intent of the laws is to provide more security for the private property rights of small landowners, they may instead be making landowners private property rights more vulnerable and thus insecure. Most local and state land and environmental laws and regulations, such as zoning, are developed and implemented to manage neighbor to neighbor conflict, and to provide a degree of investment security for the individual landowner. These laws and regulations rarely spring forth without due cause. Instead they appear when individual landowners or the public at large experience problems with the existing, non-regulated private property rights system of land and environmental resource management. Private property rights laws which reach up and down a state's administrative system serve to threaten the major asset and security of most Americans. 

Directions for the Future 

Shifting the Terms of the Debate. From one point of view, the private property rights movement, the source of the state-based bills, has been enormously successful in their efforts. Even more so than the specific bills which have been passed in any particular state, their success is in how they have captured and reframed the public debate about private property rights. 

From a period spanning from at least 1970 to 1990, the private property rights debate was seen through the lens provided by environmental and related interests. From the point of view of these interest groups, private property rights needed to be constrained and reshaped to fit changing social values and social conditions. The environmental community argued (not incorrectly from my point of view, see the following section), and the judicial system largely agreed, that most legislative and regulatory changes that impinged on private property were reasonable when viewed from the perspective of a necessary balance between the public interest and the private interest in land. 

The "success" of the private property rights movement is to have forced the policy debate to their side. Now it is increasingly common for private property related issues to be debated from the point of view of having to justify why it is that impositions on private property rights should be allowed. For the debate to even be set up in this way shows the difference a decade can make. 

The Immediate Future: Four Trends. In terms of the immediate future, I foresee three primary trends. 

First, the locus of private property rights legislative activity is likely to stay at the state level. There is an increasing recognition among many of the parties to land and environmental management disputes, that the vast majority of these issues are local in nature. So, it is in the state houses, rather than in Congress, that we are likely to see this struggle unfold. This does not discount serious national/federal debates over the content of the Endangered Species Act, the wetlands provision of the Clean Air Act, or the management of public lands. Nor am I diminishing the leadership of nationally based private property rights organizations. Rather, I am suggesting that federal activity will be focused on particular issues, while more broad-based issues related to private property rights will be taken up by the states, where the locus of debate on these matters has largely been for much of this century. 

Two, the nature of state bills is likely to move toward conflict resolution laws and away from compensation and assessment bills (which can be thought of as first generation responses to these issues). This is likely to be true for several reasons. The first generation responses are proving either difficult to adopt because of local concern over their cost (in terms of compensation laws), or difficult to implement (in terms of assessment laws). And conflict resolution laws present the issue as more reasoned (who could disagree with the notion that we should all sit down and work out solutions to these problems). But the impact of these bills are themselves uncertain, reflecting how they get written, who gets access to the conflict resolution process, the terms of resolution dictated by the statute, etc. 

Three, there is likely to be increasing outcry and backlash from those negatively affected by private property rights legislation. To some extent, these laws operate in a universe of fixed resources. That is, what is an advantage or added security to your private property rights becomes a disadvantage or insecurity to mine. 

To date, the media has set up the private property rights issue as a struggle between (virtuous or crazy, depending on your point of view) environmentalists, on the one hand, and (land-raping, responsible-managing, job/growth creating, depending on your point of view) landowner/developers, on the other hand. But, at bottom it is about the most important asset possessed by most American families -- their land and home. 

In the high profile fight over this issue we tend to forget that most laws and regulations restricting private property came about because other, often adjoining, private property owners were unduly affected by the relatively unconstrained private property use of certain landowners. This is origin of zoning, the oldest and most common form of regulation restricting private property. Zoning was invented in the 1910s because conservative, middle-class landowners needed to protect their private property rights. And they needed some security in planning for the use of their land. Zoning restricts the private property rights of some landowners to secure the private property rights of other landowners. This was zoning's origin, and this remains the major rationale for zoning. And the U.S. Supreme Court, even in its most conservative incarnations, has found this to be a reasonable balancing act. 

If I am correct in my prediction that private property rights legislation will concentrate at the state level, then I believe that those landowners who will find their private property rights made less secure through the adoption of these laws (and I believe they are in the majority) will increasingly assert their interests in this fight. 

Four, the push for state-based bills has resulted in renewed creativity among planners, public administrators, and their peers in the regulatory community. There has long been an internal debate among those characterized by the private property rights movement as "regulators," about ways to, on the one hand, respect the integrity of private property, and, on the other hand, achieve public objectives in land and environmental planning and policy. The professional journals are full of ideas for doing just this. The "success" of state-based private property legislation is facilitating a renewal of this debate and encouraging policy experimentation at the state and local levels. In line with the backlash that I foresee as the third trend, the regulatory community is finding a citizenry both more demanding of and receptive to creative solutions to land and environmental management problems. 

A Final Thought: On the Fixedness of Private Property 

Much of the debate about private property legislation is at root a debate about the very nature of private property -- specifically its fixedness (or rigidity) in contrast to its fluidity. 

Proponents of private property legislation put forth the idea that a particular view of private property is enshrined in the U.S. Constitution, reflecting a consensus among the country's founders. This view is that private property has a priori integrity, and can only be compromised subject to the restrictions of the "takings" clause of the Fifth Amendment. And proponents argue that the modification of private property by laws and regulation is a relatively recent phenomenon, associated most noticeably with the rise of the environmental movement. 

It is true that certain founders took especially strident perspectives on the necessary integrity of private property. However it is also true that others took the opposite perspective. For example, Benjamin Franklin noted with force "private property is a creature of society, and is subject to the calls of that society whenever its necessities require it, even to the last farthing." And both sides took inspiration from the writing of John Locke. In support of Franklin's position, for example, Locke noted: 

For it would be a direct contradiction for any one to enter into society with others for the securing and regulating of property, and yet to suppose his land, whose property is to be regulated by the laws of society, should be exe mpt from the jurisdiction of that government to which he himself, and the property of the land, is subject. 

So there was not one point of view about the place and role of private property among the country's founders. They, like us today, had positions that span the political spectrum. 

As for the proponents second position, history shows us that the states especially have exercised substantial regulatory restrictions over private property rights since colonial times. And, more importantly, private property rights have been substantially reshaped at various times in U.S. history to reflect changing social values and changing technologies. So, in the early part of this century, after the invention and commercial development of the airplane, private property owners lost their air rights est usque ad coelum (all the way to heaven; the traditional definition of air rights in private property) without compensation. Courts found that allowing private property owners to continue on with this older definition of private property was too strangulating on the need for technological development and progress. Similarly, in the 1960s, reflecting changing social values, restaurant owners lost their private property rights to exclude patrons on the basis of race, again absent compensation. 

My point is that from my analysis and understanding of history and law, private property has always been a socially defined and flexible concept. 

This does not take away from private property's strong cultural meaning, and its attachment to our concepts of American freedom, liberty and citizenship. In fact, it is precisely because private property is married to these concepts that we fight so strongly over it. But I believe that what we have learned from our over 200 years of Constitutional history is that for America to grow and change with changing times, we can not and will not allow any one group's definition of private property to portray our past or present. Working together we will define private property as it makes sense to our needs of the present, in light of our Constitutional framework.