SHOULD YOUR PROPERTY RIGHTS?

Article    |    Institute for Justice

Imagine a law giving bureaucrats unbridled discretion over your property rights. It would provide no standards. City officials could stop you from using your property—such as putting up a fence or planting a tree—for arbitrary reasons, or, indeed, for no reason at all. And you’d have no one to appeal their decisions to.

Now imagine a law vesting this unbridled discretion in a neighbor’s hands instead of a government agent’s. In other words, you’d need to get your neighbor’s permission to use your property the way you wanted. And your neighbor could withhold that permission for any reason whatsoever, even a petty, years-old grudge. If you objected to your neighbor’s decision on your property rights, you’d be out of luck—the neighbor’s decision would be final, and no one could overturn it.

The Neighbor’s Veto Is Dead, Long Live the Neighbor’s Veto

In a 1912 decision, Eubank v. City of Richmond, the U.S. Supreme Court struck down a neighbor’s veto as unconstitutional. But five years later, in Thomas Cusack Co. v. City of Chicago, the Court upheld a different neighbor’s veto. The difference between these cases has been where courts ground their analysis ever since.

Let’s start with Eubank. That case involved a setback ordinance that let private parties establish binding building lines. Once two thirds of property owners abutting a street decided to set a building line between 5 and 30 feet, the government had no discretion to alter this boundary.

According to the U.S. Supreme Court, this delegation to private parties violated due process. As the Court emphasized, the government had “conferr[ed] the power on some property holders to virtually control and dispose of the property rights of others and “create[d] no standard by which the power [was] to be exercised.” 226 U.S. 137, 143–44. Hence, property owners who wanted a building line could “do so solely for their own interest, or even capriciously.” Id. at 144. Just as a law would violate due process if it put this unbridled discretion in a government agent’s hands, it violated due process to put this power in private parties’ hands.

But in the 1917 Cusack case, the U.S. Supreme Court distinguished Eubank. The ordinance at issue in Cusack prohibited people from building billboards in residential areas unless they got written consent from a majority of neighboring property owners. The Supreme Court held that this neighbor’s-veto provision did not violate due process.

So why was a neighbor’s veto unconstitutional in Eubank but constitutional in Cusack? According to the Supreme Court, the difference was that the ordinance in Eubank let property owners veto land uses that were otherwise legal whereas the ordinance in Cusack let property owners waive restrictions on land uses that were otherwise prohibited:

Legislatures and Courts Must Determine Which Land Uses Are Nuisances

While lots of cases from the 1910s and 1920s were overruled in the decades ahead, Eubank, Cusack, and Roberge were not. As Professor Sasha Volokh chronicles in this informative law-review article, several modern courts have approvingly cited these three cases.

That said, courts haven’t always applied these precedents consistently or faithfully. Consider the case of Silverman v. Barry, which concerned a District of Columbia law that prohibited converting apartments to condominiums without tenants’ consent. After a trial judge granted a motion to dismiss a challenge to this law, a three-judge D.C. Circuit panel reversed the judge because “the Supreme Court ha[d] held this sort of delegation unconstitutional” in Eubank and Roberge. 727 F.2d 1121, 1126 (D.C. Cir. 1984). When the trial court dismissed the case again on remand, a different three-judge D.C. Circuit panel found that this delegation was constitutional under Cusack. According to the court, a “statute survives due process challenge on this ground if it enacts a general prohibition and then delegates to private citizens the authority to waive that prohibition.” 845 F.2d 1072, 1087 (D.C. Cir. 1988).

But this latter decision completely ignored Roberge. As Roberge shows, a delegation isn’t constitutional merely because it lets private parties waive a general prohibition. Rather, the question is whether the land use that’s prohibited is a nuisance or not. And there was no discussion—let alone indication—in Silverman as to whether converting apartments to condominiums would constitute a nuisance.

Going forward, it’s incumbent on legislatures and courts to keep the relevance of nuisances in mind when considering a neighbor’s veto. As for legislatures, municipalities like Brookline shouldn’t give private parties power to veto benign uses of property, like short-term rentals. And as for courts, it’s their job to carefully probe neighbor’s-veto laws to see if they correctly limit private power to controlling nuisances.

This task requires grappling with evidence. Cusack and Roberge are instructive. In the former case, there was “much evidence” introduced at trial showing that billboards neighboring property owners could veto were responsible for “fires[,] . . . offensive and insanitary accumulations[,] . . . and [a] shield for immoral practices, and for loiterers and criminals.” 242 U.S. at 529 (emphasis added). In the latter case, there was “nothing in the record’ showing that the philanthropic home that neighbor property owners could veto was “a nuisance.” 278 U.S. at 123 (emphasis added).

This distinction between nuisances and benign land uses should still carry the day—if your use of your property isn’t hurting anyone, then your neighbors shouldn’t have a veto to stop it.

Milad Emam is an attorney at the Institute for Justice.