PROPERTY AND FREEDOM: THE CONSTITUTION, THE COURTS, AND LAND-USE REGULATION by Bernard H. Siegan. New Brunswick, NJ: Transaction Publishers, 1997. 291 pp. Cloth $34.95. ISBN 1-56000-323-5. Paper $21.95. ISBN 1-56000-974-8.

Reviewed by William A. Fischel, Department of Economics, Dartmouth College. E-mail: Bill.Fischel@Dartmouth.Edu.
 

I met Bernie Siegan, author of PROPERTY AND FREEDOM, at a conference twenty years ago and have heard him speak at several others since. A quality that impressed me from the start was his power of persuasion. He argues his points quietly, without rancor or bombast, and he makes them sound as natural as breathing and sleeping. If he were selling vacuum cleaners, my house would have a Hoover in every room.

But he is not selling goods. Siegan is selling an idea. His life-long pursuit has been to urge courts of law to do more to protect property rights, particularly the rights of development-minded owners of land. He did this first as a practicing lawyer in the Chicago area, where he specialized in land-use. His step into academic life began with his investigation of Houston, Texas, which he made famous among academics as the city without zoning (Siegan 1972). He found, contrary to the received wisdom about the need for zoning in our complex society, that Houston worked fine without it. This conclusion captivated some heavy hitters at the University of Chicago, and Siegan became a law professor at the University of San Diego, a private, Catholic institution that is no doubt tired of being confused with the University of California at San Diego.

Siegan's most recent book again advances his arguments on behalf of property rights. t incorporates what many regard as the U.S. Supreme Court's revolutionary decisions on regulatory takings since 1987. The regulatory takings doctrine regards the Fifth Amendment's conclusion, "nor shall private property be taken for public use without just compensation," as applying to devaluations caused by zoning, for example, as well as to the government's exercise of eminent domain.

Siegan starts his book with a brief look at the big picture. The fall of Communism is presented as a worldwide vote for property rights. Siegan manages not to gloat about this, and he quickly moves to two chapters on the views of property by the Constitution's framers and interpreters. From such sources--centering on the writings of Hamilton and Madison--and from statements by nineteenth-century jurisprudents, Siegan weaves a historical case for active judicial review of legislative infringements on property rights. The framers' fear of majoritarian opportunism and the need to have independent courts control it are emphasized throughout.

The middle three chapters deal primarily with takings cases. Siegan examines the regulatory decisions in the late nineteenth century and early twentieth-century. These were decided by a U.S. Supreme Court that often reversed regulations that infringed on private property. The paradigmatic case for this tendency was LOCHNER V. NEW YORK (1905), though it was not a property case. Siegan wants the Court to return to the LOCHNER era on behalf of property rights. This is not as alarming as modern critics of LOCHNER would have us believe. The LOCHNER Court did not overturn all regulations; it just subjected them to what we would now call "intermediate scrutiny."

One of Siegan's more challenging tasks is to explain how the most articulate of the conservative Justices of the LOCHNER era, George Sutherland, could have penned the opinion in EUCLID V. AMBLER (1926). EUCLID was the case that upheld zoning, the very institution that Siegan has devoted his career to criticizing. Sutherland's opinion reads as if a rather liberal member of the Court had written it.

Siegan's route around the carte blanche given to land-use regulation by EUCLID is, to my knowledge, unique. He argues that two later cases, NECTOW V. CAMBRIDGE (1928) and SEATTLE TITLE TRUST V. ROBERGE (1928) effectively reversed the Court's highly deferential view of zoning (pp. 102, 112, 235). Siegan's contention that EUCLID was a dead letter as a result of two decisions that were decided a mere two years later is, well, a surprise. Thousands of clever land-use lawyers and scores of casebook authors have for seven decades missed a major change in the law. This is not to say that Siegan is wrong about NECTOW and ROBERGE, but it does strike this reviewer as requiring more explanation as to how the courts and the legal profession could have overlooked this implication so long.

The near-reversal of EUCLID was, according to Siegan, finally recognized by the U.S. Supreme Court in AGINS V. TIBURON (1980). The Court arrived at a set of rules that offer a basis for a higher level of scrutiny of land use regulation, even though the landowner lost. Siegan argues that the AGINS rules require that courts sustain regulations only of they (1) involve a substantial public interest--not something that could be done as well by the private sector; (2) deploy the most appropriate means to accomplish their ends; and (3) do not leave the owner without a viable economic use, unless that use is traditionally regarded as a nuisance (p. 114). Courts that find regulations wanting on any of these grounds should invalidate the legislation or order that compensation be paid to the property owner.

The Court, according to Siegan, then applied the AGINS rules in important decisions that favored landowner interests, such as NOLLAN V. CALIFORNIA COASTAL COMMISSION (1987) and DOLAN V. CITY OF TIGARD (1994). These cases represent for Siegan an appropriate "intermediate level of scrutiny" by the Court. It is a major change from the Court's EUCLID-bred deference to local government regulation, but it falls short of the "strict scrutiny" accorded to First Amendment infringements.

Despite its unusual pedigree, Siegan's version of a heightened scrutiny for zoning is worth taking seriously. The post-1987 Court has made important decisions that protect property owners from the enthusiasms of regulators, and we should ponder whether this is a good policy. In the later chapters of the book, Siegan moves his arguments for more judicial oversight of regulation to a more detailed, factual criticism of zoning and environmental regulation. These chapters are reminiscent of his famous book on Houston. They are a mixture of statistics, stories, and descriptions of scholarly studies whose effect is to warn against public regulation of land and to favor private orderings.

Siegan continues to praise Houston. He reviews studies and statistics that show that its housing prices are lower as a result of having a land market that is regulated largely by private devices such as covenants. To those who say that Houston's lower housing values reflect the costs of uncontrolled development, he points out that the city has been successful in attracting more people than any other in Texas. No one is sentenced to live in Houston.

Siegan also points out that zoning has been regularly defeated at the polls in Houston. The voters, especially Hispanics and low-income blacks and whites, oppose it. But here we run into an oddity. Siegan insists throughout the book that it is the courts who must be the guardians of property rights. Texas courts have no trouble with zoning; they uphold it in Dallas and other cities. But in Houston, it is the voters acting in that most majoritarian fashion, a plebiscite, who are the defenders of property rights.

Siegan raises Houston's voting patterns only to suggest that zoning, besides ceding control of land to clueless bureaucrats, is elitist as well. Perhaps so, but when we think about it, the protection of property belongs as much to the voters and their elected representatives as it does to the judges. On the one hand, we observe that property rights seem almost as secure in countries such as Britain and France, in which judicial review of legislation is nearly nonexistent. In the United States, voters have often reaffirmed the protections for property in their state constitutions. If American voters were such threats to property, one would think that state-constitutional protections would have been diluted over the years.

On the other hand, there are numerous instances in the United States in which an independent judiciary seems more hostile to property rights than the parallel legislature. Judicial rules of product liability are often applied in the ex-post-facto fashion that Siegan properly deplores in land use. The near-annihilation of whole industries--asbestos, breast implants, light aircraft--has been accomplished by common-law lawyers applying judge-made rules of tort liability. The doctrine of punitive-damages, under which an Alabama jury assessed BMW $4 million for having failed to disclose the repainting of a car it sold as new, is solely the product of common-law judging. (After several appeals, BMW's damages were reduced to $50,000, but most disproportionate punitive-damage awards remain uncorrected.)

Closer to Siegan's home and his topic is the astonishingly anti-development attitude of the California Supreme Court in the 1970s and 1980s. That court did not simply validate anti-development decisions by local legislatures. It made up new and troublesome legal barriers to development projects entirely on its own (Fischel 1995, chap. 6). Prodevelopment local governments were often thwarted by the California court's new rules. This had the effect, I claim in a work that Siegan notes, of accelerating California housing prices through the stratosphere during that period.

I suspect that Siegan's response to these contrary examples would be that judges ought to behave better. I agree. But that involves persuasion, to which legislators and voters are as subject to as judges. What is missing in Siegan's book is much attention to the appropriate parameters of judging. One can agree with him on the merits of "separation of powers," but that begs the question of how to divide the turf. He points to the adverse economic consequences of much legislation. But if that is the case, aren't the legislators apt to get some heat from those economic interests who are adversely affected? When should the threat of economic loss be deemed so weak that courts need to march into battle with legislatures?

The answer to this question requires an inquiry into the structure of government and principles of political behavior. Siegan does mention one important (to my mind) structural issue. Much of the problem of local land use regulation is that the beneficiaries of the regulation--say, preserving open space by low-density zoning--live inside the jurisdiction. But those bearing the costs--owners of land and would-be residents--usually live outside the jurisdiction, and land is an asset that cannot be removed from the regulator's reach. Robert Ellickson (1977) and I (Fischel 1995) have identified this asymmetry as a fundamental problem in land-use regulation for which courts may be the only viable forum for redress. Siegan concedes that zoning which merely affects people within the jurisdiction should be left alone by the courts (p. 180). It is when the issue moves from "we against us" to "we against them" (my terms) that judicial review is appropriate.

But Siegan does not put this distinction into play. National environmental regulations would seem to fall into the "we against us" category, but he is as eager for courts to spend their political capital on them as on local regulation. He overlooks examples of legislatures trying to wrestle with environmentalist excesses. The 1995 Congressional bills that would have paid compensation to landowners adversely affected by federal regulations go unmentioned. The successful state compensation bills--Florida's is a thoughtful attempt--are ignored. No attention is paid to the feisty property-rights movement, whose sad stories of regulatory abuse get a sympathetic hearing in many legislatures.

PROPERTY AND FREEDOM will be most persuasive for readers who believe that constitutional courts are the primary guardian of our freedoms. Such readers often have J.D. after their names. Siegan appeals to the port side of this crew with approving analogies to the privacy and abortion decisions. The faith that only courts can protect liberties is nearly unshakable on both sides of the bar. Siegan addresses people of that persuasion, and, if I had to choose up sides in the courtroom, I would want him on my team.

But property may be too important to be left solely to the judges and lawyers. As I mentioned at the outset, Siegan begins his book with the story of the fall of Communism and its lessons for the merits of private property. But the implosion of Communism was also a vote for democracy. Among the institutions that have thrived in democratic countries is private property. That democracies sometimes take liberties with property rights should not obscure the fact that undemocratic regimes have an even worse track record in this regard. How best to balance judicial and the more democratic protections for property should be the subject of Siegan's next book.
 

Ellickson, Robert C. 1977. "Suburban Growth Controls: An Economic And Legal Analysis." YALE LAW JOURNAL 86 (January): 385-511.

Fischel, William A. 1995. REGULATORY TAKINGS: LAW, ECONOMICS, AND POLITICS. Cambridge, Mass.: Harvard University Press.

Siegan, Bernard H. 1972. LAND USE WITHOUT ZONING. Lexington, Mass.: Lexington Books.
 

DOLAN V. CITY OF TIGARD, 512 U.S. 687, 114 S.Ct. 2309 (1994)

EUCLID V. AMBLER, 272 U.S. 365 (1926)

LOCHNER V. NEW YORK, 198 U.S. 45 (1905)

NECTOW V. CAMBRIDGE, 277 U.S. 183 (1928)

NOLLAN V. CALIFORNIA COASTAL COMMISSION, 483 U.S. 825 (1987)

SEATTLE TITLE TRUST CO. V. ROBERGE, 278 U.S. 116 (1928)