An Illinois appellate court has struck down the city of Chicago’s landmarks ordinance, saying it is unconstitutionally vague, putting in jeopardy the city’s protection of more than 250 buildings and 50 historic districts.

Judge James Fitzgerald Smith of the three person Appellate Court wrote, “We believe that the terms ‘value,’ ‘important,’ ‘significant,’ and ‘unique’ are vague, ambiguous, and overly broad”, and thus found the ordinance in violation of the state constitution.

The case involved two plaintiffs and two landmarked districts where attempts to downzone the areas failed before landmarking. However, once the case (including appeals) is over, Chicago’s entire landmarks ordinance would be completely invalidated.

Wow! I am surprised this isn’t making bigger waves in Chicago, and other cities. What should we expect to happen if appeals by The City should fail?

Would property owners rush to tear down their landmarks before The City enacts a new landmarks ordinance?

Per Tribune Architecture critic, Blair Kamin (who calls the ruling wrong-headed, but fielded some good comments):

The laws are based on a 1978 U.S. Supreme Court ruling which stopped the bankrupt Penn Central Railroad’s attempt to pile a 55-story office building atop New York City’s Beaux-Arts Grand Central Terminal. In that ruling, the court held that communities have the right to safeguard significant pieces of property, so long as they do not trample the rights of the properties’ owners.

The key word is “significant,” a word that appears frequently in Chicago’s seven criteria for landmark designation, as in the site of a significant historical event or a building that is the work of a significant architect.

It makes you wonder if there is a more robust solution to landmarks that does less to compromise the property rights of the land owners, and isn’t vulnerable to unforeseen court actions that find flaws in ordinances designed to give more power to the politicians. Perhaps, cities could achieve this through the tried and true use of contracts and easements.

I would propose some sort of easement contract with a city. If a city determines a property to have significant value to the community, the city should be willing to purchase a landmark easement from the property owner at or above market value. If the property owner does not wish to cooperate, the City should be forced to go through the eminent domain process to achieve its preservation easement.

Nonetheless, land owners should be compensated in some way for the intrusion upon their property rights based upon some peoples’ idea of ‘value,’ ‘important,’ ‘significant,’ and ‘unique’. In particular, I find the use of the word “value” peculiar. If there is value to the community, which the owner of the property does not recognize, the community should be willing to compensate the property owner for seizing that value at his expense. A property owner should not be burdened with the use restrictions and added expenses of maintaining a landmark for the benefit of the community without being compensated by the community, who wishes to impose its will upon that individual at no expense to itself.

I hope this incident makes cities re-evaluate their landmark ordinances. Particularly, I get an uneasy feeling about landmarking entire districts. Landmarking districts is a roundabout way to downzone an area, and has the unintentended consequences of banning diversity and density, sucking the potential for vibrancy from the neighborhood.

I’ll certainly keep an eye on this one…

The post Illinois Court Rules Against Chicago’s “Vague” Landmark Ordinance appeared first on Market Urbanism.

The other day I was lecturing to my students about externalities and the Coase Theorem.  One of the examples I used came directly from the our textbook – Heyne, Boettke, & Prychitko’s The Economic Way of Thinking.  It asks what would happen if you tried to declare a large tree in your neighbor’s backyard a landmark in order to prevent her from chopping it down and depriving you of the valuable shade it casts into your backyard.  The answer is that it gives her an incentive to chop the tree down much sooner, before the landmarking can go through.

It turns out that that’s exactly what some landlords in New York have been doing to avoid the severe building constraints imposed by the city’s Landmarks Preservation Law.  Of course they use jackhammers instead of chain saws, but the principle is the same.  According to this front-page article in today’s (Saturday 29 November) The New York Times:

Hours before the sun came up on a cool October morning in 2006, people living near the Dakota Stables on the Upper West Side were suddenly awakened by the sound of a jackhammer.  Soon word spread that a demolition crew was hacking away at the brick cornices of the stables, an 1894 Romanesque Revival building, on Amsterdam Avenue at 77th Street, that once housed horses and carriages but had long served as a parking garage.  In just four days the New York City Landmarks Preservation Commission was to hold a public hearing on pleas dating back 20 years to designate the low-rise building, with its round-arched windows and serpentine ornamentation, as a historic landmark.

(Hat tip to “The Volokh Conspiracy” via Mario Rizzo.)

Now, regulations and private exchanges both have unintended consequences.  The difference is that the latter represent opportunities that when exploited tend to create value (e.g., dirty air and air conditioners, noisy engines and mufflers, fast-food and gyms), whereas the former tend to frustrate the intentions of those who support the regulation (e.g., rent control and housing shortages, minimum wages and unemployment, and industrial bailouts and, well, more industrial bailouts.)

Anyway, about half the class chose not to attend that particular lecture, thereby depriving themselves of much wisdom.  It was the day before the Thanksgiving break, however, so I guess they too were just following their incentives.

The post Landmark Incentives appeared first on Market Urbanism.

Back in the days in the Wild Wild East of private land ownership and limited land-use restrictions, parks were actually created by market forces. The same forces that created and preserved Gramercy Park could easily be used to preserve Historic Landmarks and low density “neighborhood character”.

NY Times – The Guardian of Gramercy Park

Indeed, while a key to Gramercy Park — or, more precisely, an address that entitles one to such a key — is among the most coveted items of New York real estate, under Ms. Harrison’s stewardship, the park has become perhaps the least-used patch of open space in the city. Most days, in nice weather, one would be hard-pressed to find more than a handful of people in the park at once, and few linger.

Gramercy is one of two private parks in New York City (the other, in Queens, is Sunnyside Gardens Park), and a key is required not only to enter, but to leave through a gate in its wraparound wrought-iron fence.

Each of the 63 lots on which the current 39 buildings sit gets two keys, which residents (and guests at the Gramercy Park Hotel) may borrow from their doormen. In addition, residents of those buildings — but only those — may purchase keys for $350 per year; the keys are all but impossible to copy and cost $1,000 to replace.

About 400 people now have keys, but many of them apparently sit unused in junk drawers in the grand foyers in the apartments overlooking the park. One sunny morning last week, as Ms. Harrison chatted with the Rev. Thomas F. Pike, rector of Calvary-St. George’s Church, there were three others in the park: a woman checking her BlackBerry, a custodial worker and a jogger. On a Saturday morning three days later, about two dozen people could be spotted in the park over the course of four hours, and never more than six or eight at a time.

Of course, the park is privately owned land, and the owners have the right to exclude people from using it just as we all have the right to exclude people from our own homes. And they exclude people at their own expense. Imagine how much money the owners would reap if they were to sell the land to a developer to build luxury towers on that precious land…

But, it’s funny how at first it almost feels wrong that a park is kept from public use. It shows us how much we are conditioned to think parks are public goods, and couldn’t effectively be provided by the public sector.

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