FORCED SALE RISK: CLASS, RACE, AND THE “DOUBLE DISCOUNT”
Author: Thomas W. Mitchell, Stephen Malpezzi, & Richard K. Green
What impact does a forced sale have upon a property owner's wealth? And do certain characteristics of a property owner such as whether they are rich or poor or whether they are black or white, tend to affect the price yielded at a forced sale? This Article addresses arguments made by some courts and legal scholars who have claimed that certain types of forced sales result in wealth maximizing, economic efficiencies. The Article addresses such economic arguments by returning to first principles and reviewing the distinction between sales conducted under fair market value conditions and sales conducted under forced sale conditions. This analysis makes it clear that forced sales of real or personal property are conducted under conditions that are rarely likely to yield market value prices. In addition, the Article addresses the fact that judges and legal scholars have utilized a flawed economic analysis of forced sales in cases that often involve property that is owned by low- to middle-class property owners in part because those who are wealthier own their property under more stable ownership structures or utilize private ordering to avoid the chance that a court might order a forced sale under the default rules of certain common ownership structures. The Article also raises the possibility for the first time that the race or ethnicity of a property owner may affect the sales price for property sold at a forced sale, resulting in a "double discount," i.e. a discount from market value for the forced sale and a further discount attributable to the race of the property owner. If minorities are more susceptible to forced sales of their property than white property owners or if there does exist a phenomenon in which minorities suffer a double discount upon the sale of their property at a forced sale, then forced sales of minority-owned property could be contributing to persistent and yawning racial wealth gaps.
Destabilizing the Normalization of Rural Black Land Loss: A Critical Role for Legal Empiricism
Author: Thomas W. Mitchell
This article exemplifies the New Legal Realist goal of combining qualitative and quantitative empirical research to shed light on important legal and policy issues. He also demonstrates the utility of a ground-level contextual analysis that examines legal problems from the bottom up. The study tracks processes by which black rural landowners have gradually been dispossessed of more than 90% of the land held by their predecessors in 1910. Mitchell points out that despite the continuing practices that contribute to this problem, there has been very little research on the issue, and what little attention legal scholars have paid to it has proceeded in an empirical vacuum. The article proceeds to examine existing data, and to describe the ongoing empirical research being conducted on black rural land loss in the U.S. south by Mitchell and his team. Mitchell concludes that a thoroughly contextual analysis (combining qualitative with quantitative methods) is necessary if we are to achieve an accurate understanding of the process by which law contributes to black rural land loss in this country. This kind of understanding will permit more effective policy decisions, both within and outside of the law.
The Land Crisis in Zimbabwe: Getting Beyond the Myopic Focus Upon Black & White
Author: Thomas W. Mitchell
This article deconstructs the role that race has played in the land crisis in Zimbabwe. The article makes it clear that the government of Zimbabwe has not extended robust property rights to its black majority for the most part even as it has taken land from large white landowners.
Author: Thomas W. Mitchell
This article considers one of the primary ways in which African Americans have lost millions of acres of land that they were able to acquire in the latter part of the nineteenth century and the beginning part of the twentieth century and the sociopolitical implications of this land loss. Specifically, this article highlights the fact that forced partition sales of tenancy in common property, referred to more commonly as heirs' property, have been a major source of black land loss within the African American community. The article argues that involuntary black land loss has had a significant negative impact upon the African American community given that the acquisition of land represented more than simply the acquisition of an important economic asset for African Americans who had been denied the opportunity for the most part to become real property owners prior to the Civil War and the period of Reconstruction. Consistent with political and property theory, after Reconstruction, many African Americans believed that landownership would enable them to participate much more robustly in the political life of the country and in civil society and that such ownership would provide African Americans with a foundation for the establishment of healthy and stable communities. In contrast to the default rules governing exit from tenancy in common ownership, the article demonstrates that the law often enables certain groups or communities to own property under various common ownership structures in a way that supports the ability of these groups and communities to maintain stable ownership of their real property over time. Given that poor and minority communities have lost a great deal of land that they had valued for both important economic and non-economic reasons, this article advocates for several reform proposals. These proposed reforms include proposed modifications to the default rules governing tenancy in common property that would enable groups such as African Americans who own much of their land under these default rules to maintain ownership of their property in a significantly more stable way than they do today.