Whose rights are those property rights?

By: J. David Chapman/October 24, 2019

The National Association of Realtors is one of the largest lobbying organizations in the U.S. One of its most important platforms is preserving citizens’ property rights. On the surface, this is something, it seems, everyone would support. It is not that simple. In fact, it is very complex.

The Constitution protects property rights through the Fifth and 14th amendments’ due process clauses and, more directly, through the Fifth Amendment’s takings clause: “nor shall private property be taken for public use without just compensation.” There are two basic ways government can take property: outright, by condemning the property and taking title; or through regulations that take uses, leaving the title with the owner – so-called regulatory takings.

The previous paragraph is about protecting citizens from their government as in condemnation and eminent domain. Interestingly, it is rare for governments to take property using eminent domain. Since being on city council, I’ve been contemplating property rights in a different light. What I have experienced is a citizen group, normally a neighborhood, or other advocacy group, using their rights to stop another citizen, or group, from utilizing their right to develop property.

Common law limits the right of free use, but only when a use encroaches on the property rights of others, as in the classic law of nuisance and risk. While one party claims, by right, they are able to use a property for a certain use (a developer, for example), the other party (potentially a neighborhood) sees this use as a possible nuisance and risk within their rights to stop the use.

The possible nuisance and risk grievances are fairly predictable. Normally, the party wanting to restrict the other party from building something will claim that the development will increase traffic and noise, thereby causing a nuisance. They will also, likely, claim the risk of a reduction in home values in the neighborhood if the development proceeds. So on one hand, we have a developer with the right to build and develop, against a neighborhood that feels they have the right to prevent the nuisance and risk of the development. So the question is: When we speak in favor of property rights, which most of us clearly do, exactly whose rights are we protecting?

J. David Chapman is an associate professor of finance and real estate at the University of Central Oklahoma (jchapman7@uco.edu).