Negative-Value Property

Abstract

Ownership is commonly regarded as a powerful tool for environmental protection and an essential solution to the tragedy of the commons. But conventional property analysis downplays the possibility of negative-value property, a category which includes contaminated, depleted, or derelict sites. Owners have little incentive to retain or restore negative-value property and much incentive to alienate it. Although the law formally prohibits the abandonment of real property, avenues remain by which owners may functionally abandon negative-value property, as demonstrated recently by busts in certain coal and oil & gas markets. When negative-value property is abandoned, whether formally or functionally, the rehabilitation of such property typically requires public expenditure—an externality which cuts against property’s general and salutary tendency to internalize spillovers at a low social cost. The existence of negative-value property, as well as its increasing abundance, reveals an underdeveloped aspect of property theory and a pressing need to fortify legal mechanisms that prevent abandonment and enforce owners’ financial responsibility for severely degraded property.

Keywords

Negative-value property, Property law, Abandoned property

Share

Authors

Bruce R. Huber (Notre Dame Law School)

Download

Issue

Publication details

Dates

Licence

All rights reserved

Peer Review

This article has not been peer reviewed.

File Checksums (MD5)

  • pdf: 1da914b39436fd6a03ce8c64619c2b45