The Limitations of Majoritarian Land Assembly

Abstract:     
In their article, Land Assembly Districts, Professors Michael Heller and Rick Hills address the collective action problem arising from excessively fragmented land. They propose an innovative solution: Land Assembly Districts (or "LADs"). In this Article, I raise several concerns regarding LADs in particular and majoritarian land assembly in general. LADs rely on majority voting by a neighborhood's existing owners. Yet majority voting, coupled with the possibility of heterogeneity, means that LADs may both approve socially undesirable assemblies and disapprove socially desirable ones. LADs also permit owners to bargain over a project's surplus. But such bargaining creates additional costs for developers, as well as a potential bilateral monopoly problem, both of which may result in fewer desirable assemblies. There is thus no reason to believe a priori that LADs are superior to either eminent domain or private assembly. Finally, because LADs require courts to delineate the circumstances in which eminent domain would continue to be permitted, LADs may not even offer an administrability advantage. Indeed, LADs ultimately may rely on judicial expertise to an extent the authors themselves believe is problematic. Still, LADs constitute a creative proposal worthy of consideration.

Number of Pages in PDF File: 9

Keywords: land assembly, LADs, eminent domain, majority voting, heterogeneity, holdouts, bilateral monopoly

JEL Classification: K11

working papers series