When Public Land Leaves Public Hands: Values Embedded in Municipal Land Disposition Law

Introduction

On September 17, 2021, the Los Angeles Clippers celebrated the groundbreaking of their new stadium—the Intuit Dome—in Inglewood, California. The event involved musical performances, speeches by local elected officials, and an address by Clippers’ owner and multi-billionaire Steve Ballmer, who presented several key features of the $1.8 billion, 18,000-seat arena that he had privately financed. The Dome would be a basketball “mecca” with an acre-large halo scoreboard, cashier-less food stands, an 80,000 square foot outdoor plaza, and other amenities.[1]

Outside, a crowd of tenants, organizers, and Inglewood community members gathered to protest the groundbreaking. They picketed the entrance to the planned stadium grounds, calling for “Homes Not Domes.”[2] A majority Black and Latinx city, Inglewood had experienced rapid gentrification over the last decade; the city had courted major commercial development but failed to produce any new affordable housing since 2013.[3] As home prices, rents, and evictions skyrocketed, many long-time Inglewood residents had come to see large commercial developments like Intuit Dome as more of a threat than an economic boon.[4]

City-owned land is at the heart of the tug of war over Inglewood’s built environment. In 2018, Ballmer and the Dome’s developers bought twenty-two acres of city-owned land to form the twenty-eight-acre parcel that would house the arena. Uplift Inglewood, a coalition of tenants and housing activists, sued to void the sale, arguing that the government had failed to prioritize affordable housing for the site as required by California’s Surplus Land Act. The case was allowed to proceed to trial, but a Los Angeles Superior Court judge ultimately ruled against Uplift, persuaded by the City’s argument that the land was not surplus.[5]

The clash over Intuit Dome represents both the importance[6] and contentiousness[7] of public land at the local level. In recent decades, local governments have increasingly opted to privatize their real property and infrastructure in order to plug budget holes and “revitalize” long-held assets.[8] Meanwhile, local land activists, movement lawyers, and policy experts are increasingly calling for the use of public land “as an anti-displacement and anti-gentrification strategy in response to the failure of the private land market to meet affordable housing needs.”[9] Other advocates have pushed for the use of government-owned land to increase the provision of public goods like recreational space, child care facilities, and community centers.[10]

Legal scholars and policy commentators tend to focus on how local governments can acquire more land, as this process may involve controversial uses of eminent domain or the significant expenditure of taxpayer dollars. However, the disposition of government-owned land is just as fraught—and just as important a subject for scholarly inquiry. Disposition concerns how governments make use of the land resources they already have. Depending on its design, the disposition process may hasten privatization, encourage public land retention, or promote particular urban policy goals, such as the construction of affordable housing. In any case, as the struggle over Intuit Dome indicates, the disposition process creates space for political contestation over land use and urban futures. Yet there have been precious few legal or empirical investigations into how the municipal land disposition process unfolds.

In this Note, I review the laws and policies that guide public land disposition in fifteen large American cities. Municipal land disposition law turns out to be a tapestry of state constitutional provisions, state statutes, and local law (itself a composite of charter provisions, city ordinances, executive orders, and administrative guidelines). Together, this tapestry establishes a set of default rules for the disposition of “surplus” city-owned real property—that is, land no longer necessary for government use.

This Note creates neither a comprehensive compendium of disposition laws on the books nor evaluates how precisely these laws work in practice. Instead, it catalogues the values embedded in municipal disposition law. I identify at least five: (1) transparency, (2) democratic checks and balances, (3) efficiency, (4) anti-corruption, and (5) public use. These values sometimes dovetail with one another: for instance, procedural guardrails that promote transparency in public land sales also serve an anti-corruption purpose. At other times, the values work at cross purposes: an efficiency approach to disposition focuses on selling off unneeded parcels for the highest possible price, at the potential expense of prioritizing less lucrative but more publicly-beneficial uses (e.g., affordable housing). Retention, for its own sake, is rarely a strong animating value: except in a few cities, once the disposition process is initiated, privatization is essentially a foregone conclusion. All that remains to be resolved is how the land will be disposed of, to whom, and on what terms.

This Note also contemplates what values should animate the disposition process. I suggest the need for a pair of new “stewardship” values, which would encourage either continued government land ownership or decommodified, community-based ownership. Armed with these values, I argue, local governments would be better equipped to prevent the ills associated with urban land privatization.

The Note proceeds as follows. Part I provides historical background on municipal land disposition as a longstanding tool of local governance and discusses how legal scholars have tended to view the process—namely, as one marked by immense legislative and administrative discretion, with limited judicial review. Although some scholars have characterized the process as entirely lacking in regulatory guardrails, I suggest that we do not have enough cross-cutting empirical work to conclude this with confidence. Part II describes the principal values that animate disposition law and policy in my sample of fifteen cities. Part III addresses the normative stakes of surplus land disposition and suggests the need for a new, potentially overriding set of values—government stewardship and community stewardship—that local governments should incorporate into the disposition process.

I. Historical and Legal Background on Municipal Land Disposition

While it is difficult to quantify the scope of local public landownership, local governments in the United States reportedly own “vast amounts of land.”[11] The New York City government owns several times more land than the biggest private property owners in the city.[12] The City of Los Angeles owns over 7,500 properties and roughly 10% of the city’s vacant lots.[13] Local governments in legacy industrial cities own an especially notable share of urban property: local government entities own 5% of all property in Baltimore; 7% of Youngstown, Ohio; 10% of St. Louis; and 28% of Flint, Michigan.[14] Although public ownership is less prevalent in southern and western regions, government entities own significant property in cities like Miami, Phoenix, Houston, and San Diego.[15] Small municipalities in the Northeast have also joined the ranks of landowning local governments: Nantucket, Block Island, and several Cape Cod towns have acquired thousands of acres of town land in recent years.[16]

Many parcels of local government-owned land are actively used for government or other public purposes; they contain agency offices, parks, schools, transit centers, and other similar facilities. Other parcels lie vacant or underutilized; such land is often described as “surplus.”[17] Local governments may look to repurpose, transfer, lease, or sell their property to achieve administrative goals—for instance, realizing a specific public policy or urban planning objective, filling budget holes, or increasing the investment value of their real estate portfolios.

Today, as local governments deal with both acute and long-term fiscal crises, “a wave” of asset privatization “is sweeping the nation’s cities.”[18] Local governments are selling and leasing their infrastructure (waterworks, airports, bridges, etc.) and their real property. And private developers continue to encroach on and enclose public spaces such as parks, plazas, and streets—for example, through the formation of business improvement districts and other “privately owned open spaces.”[19]

As I discuss later in this Note, privatization has negative implications for democratic accountability and the distribution of political power and material resources in cities.[20] When it comes to disposing of public land, however, privatization can have especially entrenching consequences.[21] In a groundbreaking book on land privatization in the United Kingdom, critical geographer Brett Christophers explains,

Those concerned by the disposal of public land often warn that it is an “irreplaceable asset” with which we would do well to be much more careful. And they are right to do so. But the land itself is not the only such asset. Also irreplaceable, and arguably more significant, is the particular capacity for public self-determination conferred by state ownership and control of the land—even if only “potentially.”[22]

Scholars of property and local government law have understandably dedicated countless articles, casebooks, and courses to studying how local governments regulate private land use.[23] In addition, legal scholars have extensively studied how local governments acquire the real property they own.[24] The lion’s share of this literature focuses on the use of eminent domain and its impact on constitutional property rights (though some scholars have analyzed how local governments creatively wield public rights of first refusal[25] and land banking[26] to acquire land).

Less scholarly attention is paid to the process by which local governments dispose of the property they already own. In the early 1970s, an urban planning historian described the disposition of municipal land as “strangely overlooked.”[27] Today, studies examining how and why public real estate assets are “developed, divested, or protected” remain “scant at best.”[28] To the extent that disposition has been an object of investigation, such analysis has focused largely on federal government land ownership,[29] but even at that level, the sale and lease of government assets “occupy one of the dustiest corners of public law,” as “the sales of land parcels, auctions of apartment buildings, and the lease of mineral rights are [simply] not the stuff of which headlines (or law reviews) are made.”[30]

A small subset of scholars has nevertheless made key observations about the municipal land disposition process. First, disposition has long served as a potent tool of local governance, rather than a mundane bureaucratic decision. Second, municipal land disposition decisions are highly discretionary, particularly because judicial review is limited where there are no public trust or eminent domain issues at play. And finally, some scholars have characterized local land disposition as entirely lacking in legislative or regulatory frameworks—though I observe that there exist essentially no cross-cutting empirical or legal studies about how this administrative process works. This Note seeks to fill a portion of this knowledge gap.

A. Historical Perspectives on Land Disposition as a Tool of Local Governance

Public land disposition has been a core issue of local governance since the colonial period and early republic. Contrary to perceptions that public ownership is incompatible with American private property regimes, early planned communities in the United States were “acquired by the public, surveyed into streets, blocks, and lots, and disposed of by auction or sale, often with conditions governing the use of the land.”[31] Often, land sale proceeds were used to erect public buildings, make community improvements, and maintain open spaces that would remain in public ownership for future generations.[32]

In the eighteenth and nineteenth centuries, local governments timed the disposition of public land strategically,[33] orchestrating land sales and leases not only to generate revenue, but also to control spatial development. After its incorporation in 1790, for example, the city of Savannah, Georgia “us[ed] its ownership of the common and employ[ed] a system of regulated sales and leases” to “guid[e] growth” and “avoid sprawl and speculation” for more than half a century.[34] Legal historian Hendrik Hartog has characterized New York City’s management of its corporate estate as a “mode of public planning and governance.”[35] In addition, public land grants held profound political significance. New York City’s estate, for instance, enabled it to consolidate power in a world where “instrumental public action was inherently suspect.”[36] As Hartog argues, “[t]he property rights granted [the city] through its charters allowed it to achieve governmental objectives that were beyond the reach of unpropertied local governments. Instead of sanctions against failures of performance, the city could offer leases, licenses, and grants to private individuals willing to implement various city-defined goals.”[37]

In early American history, public land ownership and strategic disposition were critical stages in the life cycle of local property. But by the late nineteenth and early twentieth centuries, private landownership had eclipsed public landownership in most urban and peri-urban areas. Plots of land that had served as commons were largely sold off, the land retained by government was committed to a narrow set of public purposes, and local governments no longer needed municipal real estate to exercise their political power.[38] It became a “given that absent special circumstances or uses for which public ownership might be appropriate (like parks), the proper destination of publicly owned land [was] into private hands.”[39]

Despite dwindling public ownership, planners and urban policy experts identified public land retention and management as the solution to challenges that attended rapid urbanization in the twentieth century.[40] Perversely, however, many of these same planners advocated for one of the most devastating efforts by local governments to acquire and dispose of urban land: urban renewal, an initiative that resulted in the systematic displacement of communities of color in major American cities under the guise of “blight removal” and “slum clearance.”[41] Urban renewal led to what Samuel Stein and Oksana Mironova have termed “municipalization by dispossession”[42]—that is, local government’s strategic acquisition and management of land formerly occupied by residents of color, followed by large-scale disposition of cleared land to for-profit developers.

Ultimately, while urban renewal led to major government intervention in local land markets, it was the kind of intervention that wielded state power for private, market-oriented ends.[43] As Keeanga-Yamahtta Taylor describes, “instead of rebuilding urban communities and allowing for the return of those who had been displaced by . . . bulldozers, private developers built condominiums and apartments and refurbished shopping districts for a middle-class clientele while ignoring the housing needs of those who had been displaced.”[44]

Local governments have also wielded their power to acquire and dispose of land during periods of acute economic distress, such as the urban fiscal crises of the 1970s and, more recently, the Great Recession. In the mid-to-late twentieth century, deindustrialization—coupled with urban sprawl and white flight—led to an increase in vacant, abandoned, or tax-delinquent properties that cities then acquired through tax foreclosure or condemnation. Many cities have and continue to dispose of these properties through land banks, special governmental entities that “acquire surplus properties and convert them to productive use.”[45] While land banks may hold land strategically, local officials often use them to flexibly transfer real estate to private parties.[46]

This brief historical survey, while far from comprehensive, serves to illustrate that the disposition of public land is a tool of local governance. For centuries, local governments have acquired and distributed local land to raise revenue, guide spatial development, and bolster their own political legitimacy. This history also provides a crucial reminder that the power associated with public land management has often been co-opted and wielded for private, commodified, and racially discriminatory ends. In short, the disposition of public land is far from a value-neutral or mundane administrative decision.

B. Limited Judicial Review of Disposition Decisions

Legal scholars characterize municipal land disposition as a process in which a local government’s policy discretion is “at its height.”[47] A government’s power as a landowner is greater than its power as a land use regulator, both because government frees itself from certain legal constraints, like constitutional takings clauses, and because it has more than veto power over private owners’ land use decisions: “a government that owns can affirmatively decide the nature and timing of land use.”[48]

Limited judicial review facilitates municipal discretion in the disposal of real property. Municipalities enjoy “broad deference when selling public property,” especially where property has been designated as surplus to government needs.[49] Scholars explain this deference in different ways. Richard Schragger, for instance, notes that cities have enhanced power to negotiate over land use deals when they act in their proprietary capacity—that is, when they exercise their spending and contracting powers rather than their regulatory power.[50] While unconstitutional conditions doctrines place an “outer limit” on the exercise of the city’s contracting authority, these formal constitutional constraints are less important than the space opened up through individualized transactions over municipal real estate.[51] Relatedly, Noah Kazis has observed that when local governments convey publicly owned land to private developers, they tend to use covenants instead of zoning law to set conditions on development.[52] Governments do so at least in part because a covenant—a tool of private law—limits which parties can enforce land use controls in court, whereas zoning—a tool of public law—increases the likelihood of judicial intervention through citizen enforcement provisions.[53]

Other scholars agree that municipal disposition decisions are, as a descriptive matter, proprietary, but attribute light judicial oversight to the public nature of local government power. Historically, a city’s decision to dispose of its assets meant that it was acting in its “private” capacity.[54] Given that municipalities were traditionally thought of as corporations,[55] courts scrutinized municipal transactions through the lens of corporate fiduciary law.[56] But today, Max Schanzenbach and Nadav Shoked argue, courts tend to characterize cities as exclusively “public”:

[They are] creatures of the state set up primarily to tax, regulate, and provide services. Accordingly, modern courts reckon that the only relevant legal question when a city acts is whether the state empowered it to act. The question, prevalent in private law, is whether the entity’s act lived up to any obligations toward members, is irrelevant.[57]

To demonstrate that “tools of public law” offer city residents “little relief” from potentially unwise transactions in city-owned property,[58] Schanzenbach and Shoked highlight the City of Chicago’s decision to sell its metered parking system to a private company for $1.1 billion. Taxpayers challenged the sale, but because the city was authorized to sell the asset so long as it retained related governmental powers,[59] the reviewing court refused to second-guess the city’s decision-making process or the quality of the deal it had struck.[60]

Whether judicial review in this context is light because local governments are acting in their proprietary capacity or in spite of them doing so, the consensus is that courts do not meaningfully oversee municipal land disposition decisions. There are two important exceptions. The first is when a city uses eminent domain to acquire land that it subsequently sells or conveys to a private owner. In this subset of cases, the public use requirement enshrined in federal and state takings clauses constrains municipal discretion.[61] The second exception is where the public trust doctrine (PTD) applies.[62] The PTD protects land underneath and abutting navigable waters from being alienated by state and local government.[63] Scholars and advocates have pushed for a broader conceptualization of PTD as encompassing all kinds of natural resources lands, “following terrestrial wildlife wherever it migrates” inland, upland, and into the atmosphere.[64] Courts in some states have embraced the PTD and trust-like principles[65] when reviewing the sale or transfer of state and local park land.[66]

These two exceptions are important: exercising eminent domain is one of the most politically salient decisions that local governments make, and local governments likely own “significant amounts of land that contains or abuts public trust resources.”[67] Yet local governments have owned many parcels of their real property for long periods of time or acquired them through an exemption from the constraints of state eminent domain law (e.g., through condemnation for property characterized as “blighted”). And there are relatively few public trust cases that have arisen in the context of parks and urban public lands.[68]

As such, judicial review of the bulk of municipal land disposition decisions remains limited, to the chagrin of concerned scholars. Schanzenbach and Shoked lament that the lack of judicial scrutiny over municipal transactions has resulted in “local governments . . . rushing, with little deliberation or expertise, into market deals of highly dubious quality . . . thoughtless[ly] transact[ing] in city assets.”[69] And Daniel Rosenbaum observes that “without meaningful . . . judicial parameters,” individual properties end up being “acquired and sold for shifting political reasons,” without considering the long-term implications of such decisions.[70]

C. The Underexamined Nature of the Disposition Process

Beyond the light touch of the court system, scholars also explain the highly discretionary nature of municipal land disposition by reference to an apparent paucity of legislative and regulatory restrictions. Because nearly half of states do not include local agencies within the ambit of their state administrative procedure acts, it is certainly true that “many local agencies . . . operate without any . . . mandatory overarching legislative procedural guidance” on administration, leaving a “tremendous range of procedural discretion at the local level.”[71] Scholars who have studied land disposition at the local level observe this kind of discretion in action. Steven Davis, for instance, notes that “land managers at the city and county level tend to be far less constrained by legislative or regulatory guidelines and requirements than federal managers,” and thus are comparatively “unfettered” in their decision-making.[72] According to Schragger, the disposition process is “shot full of ad hoc agreements, behind the scenes deal-making, and site-specific concessions.”[73] Rosenbaum likewise concludes that the apparent lack of legislative and regulatory parameters for disposition enables local entities to “sell property in order to advance short-term political or fiscal goals, absent any cohesive long-term sensibility.”[74]

At the same time, aside from a few empirical studies,[75] there have been no systematic or cross-cutting analyses of municipal land disposition as a legal process. This stands in stark contrast to the dense empirical literature on planning and zoning procedures, which are arguably characterized by just as much discretion and ad hoc decision-making as the disposition of government-owned land and yet have been extensively mapped out by legal scholars.[76]

Understanding with some granularity how and why local governments dispose of their real property is important for a few reasons. First, such analysis will either substantiate or constructively question the idea that disposition is a lawless—even “thoughtless”—process. Second, studying the land disposition process “can add a rich dimension to the literature on local authority and identity, complicating questions of local democratic accountability” and “the valence of local community.”[77] Lastly, and perhaps most urgently, getting a thicker descriptive picture of local land disposition allows us to debate normative visions for government land ownership with greater clarity.

II. Values Embedded in Municipal Land Disposition Law

Having outlined the need for more cross-cutting and empirical legal research into the municipal land disposition process, I turn now to the main thrust of this Note. Rather than comprehensively surveying disposition procedures as they operate on the ground, this Note takes on the first-order project of mapping the values embedded in disposition law, based on a sample of large American cities across geographic regions. I identify several core values: (1) transparency and (2) democratic checks and balances, values which ensure that disposition decisions are made publicly and with the approval of a city’s elected officials; (3) efficiency, a value which encourages cities to sell parcels at fair market or highest bid value; (4) anti-corruption, a value which places particular constraints on the donation of municipal land to private parties; and (5) public use, which encourages cities to incentivize publicly-beneficial uses of surplus municipal land (e.g., affordable housing).

As a prefatory note, “municipal land disposition law” is really a mosaic of state constitutional law, state statutory law, and local charters, ordinances, and administrative guidelines. State constitutions contain provisions that directly or indirectly regulate how local governments can dispose of surplus land. For instance, many state constitutions contain gift clauses, which prohibit the state and political subdivisions from making donations or granting of “things of value” to individuals, associations, or corporations. State constitutions may also provide for the management of state-owned land within municipal boundaries, such as property possessed by state universities,[78] natural resources land,[79] or property acquired by state tax foreclosure.[80] State statutes—in particular, local government codes—authorize jurisdictions to acquire, manage, and dispose of real property.[81] States typically impose a few procedural requirements on local government but otherwise permit local customization.[82]

Even under the most rigid state statutory regimes, there is room for variation at the level of local law and policy: city charters, codes of ordinances, mayoral executive orders, and administrative regulations promulgated by municipal agencies are tools that cities use to tailor the disposition process to local needs. Appendix, Table 2 provides an overview of local land disposition provisions that govern in fifteen large American cities, which were selected to represent prominent, populous metropolitan areas in geographic regions across the country.

Before cataloging the values embedded in these cities’ disposition laws and policies, it is worth making an overarching observation about the nature of this body of authority. In many cities, the legal process of disposition engages multiple administrative and elected officials, as well as the general public; on paper, then, disposition is far from a “thoughtless” decision. At the same time, disposition laws and policies tend to be full of default rules that can be adjusted or set aside, based both on the intended use for and recipient of city-owned land. In other words, disposition law permits local governments to engage in idiosyncratic, site-specific deal-making with potential buyers. My preliminary empirical analysis is thus consistent with, but also complicates, the story that legal scholars tell about local land disposition: cities enjoy a good deal of discretion in disposing of the real property they own, but there are legal and policy guardrails that shape the exercise of that discretion.

A. Transparency & Democratic Checks and Balances

One key value reflected in local land disposition laws and policies is procedural transparency: that is, the sale of city-owned land should not take place clandestinely or behind closed doors. The preference for transparency is manifested in several ways. Almost all of the surveyed disposition statutes require public notice well in advance of land disposal, whether the requirement is enshrined at the state or local level,[83] and some cities also require at least one public hearing before the local executive or city council can authorize disposition.[84] Moreover, the standard procedure for acquiring city-owned real estate in many jurisdictions is competitive bidding or public auction, rather than private or direct negotiated sale, which further illuminates the importance of transparency in real estate transactions.[85]

Disposition laws also promote checks and balances, as they tend to preclude unilateral disposal by whatever agency, board, or local government entity holds formal title to the parcel. To be sure, the decision to designate a parcel as surplus typically belongs to the municipal agency that holds title. And many disposition laws do not provide a formal opportunity for other agencies, city legislators, or the general public to contest a surplus designation.[86] In other words, once one local agency has decided it no longer has use for a particular parcel it owns, public retention becomes rather unlikely.

However, there is almost always some democratic check on local agency action, requiring either the city’s executive or legislative body to formally approve the conveyance of city-owned property. A common arrangement is for the city executive to prepare a proposal for the disposal of a parcel to a particular buyer, which the city council then accepts or rejects by resolution.[87] Precisely what the council votes on may vary. In some cities, legislators themselves determine concrete terms of sale. In others, a city manager or real estate division negotiates terms with individual buyers, and the city council has veto power at the end of the deal-making process. The latter is the case in Denver, where the Division of Real Estate, which is responsible to the city’s mayor-appointed Chief Financial Officer, works with city agencies and negotiates with potential buyers regarding the intricacies of the sale or lease. However, any resulting contract or deed must be authorized by City Council ordinance or resolution.[88]

The fact that each individual municipal land disposition decision must enjoy the imprimatur of a city’s elected officials is consistent with the observation that “the functional distinction between legislative and administrative entities [at the local level] can blend.”[89] This fact also lends support to the observation that disposition decisions can be highly politicized. Of course, the political nature of disposition is neither novel, as the historical overview in Part I of this Note makes clear, nor surprising: “eliminating political influence from government real estate decisions is like removing sand from a beach.”[90] Nor is a politically-inflected disposition process necessarily undesirable.[91] Benjamin Sachs has shed light on the ways in which labor unions strategically use the disposition process to bring employers to the bargaining table: when the Yale-New Haven Hospital needed a parcel of land owned by the City of New Haven to construct its new cancer center, Service Employee International Union District 1199 and then-Mayor John DeStefano leveraged that need to secure a favorable organizing agreement for the union.[92] Like other land use regulatory processes, disposition may be “criticized as unprincipled and extralegal,” but “it is precisely the fact” that it “provides room for political considerations” that gives community-based groups like unions and anti-poverty organizations the traction they need to negotiate for their needs.[93]

B. Efficiency

Another value that animates municipal land disposition law and policy is efficiency. In this context, efficiency entails maximizing city government’s financial resources and minimizing the costs associated with property maintenance.

The clearest manifestation of the efficiency value in local disposition law is that the default price for surplus government-owned land is often fair market value or the value of the highest bid on the property in a competitive bidding process. For instance, in Chicago, when a city council committee has not taken action on a proposed sale of surplus city-owned land after sixty days, “the highest bid shall be deemed recommended” for the council’s consideration.[94] Vacant land in Chicago can be disposed of by an expedited process; for these properties, the parcel must be awarded to the “highest bidder whose submission package is timely and complete.”[95] In Houston, subject to Texas local government law, the selling price for developable land “shall never be . . . less than the market value fixed by city council.”[96]

To be sure, efficiency does not have a totalizing hold on the disposition process. In almost every city surveyed, state and/or local statutes authorize the sale of city-owned land at below-market rates where the property will serve a qualifying public purpose[97] or be sold to a qualifying purchaser.[98] However, efficiency is a powerful consideration: unless a competing value supersedes efficiency on a case-by-case basis, cities are typically looking to maximize the financial return on their “assets.”

Efficiency values are also on full display when it comes to disposition law’s treatment of land that is not readily “developable” (e.g., because it is smaller than the buildable lot size, oddly shaped, or topographically ill-suited for certain types of construction). Here, the goal is not necessarily to maximize sale proceeds, though that may also be a city’s objective, but instead to minimize the cost of maintaining a parcel that the city suspects will be undesirable on the market. Local governments are often authorized to dispose of so-called “remnant” parcels through a streamlined process—for instance, through negotiated private sale with a neighboring landowner.[99]

Even though efficiency may be superseded by other values, it is the most important governing principle for many city officials. Indeed, practitioners in the municipal asset management field view efficiency as the sine qua non of their work: “under the right institutional arrangement,” one analyst observes, “the most attractive asset on the municipal balance sheet for maximizing economic returns is municipally owned land.”[100] When practitioners take a “balance sheet” approach to the assets and liabilities of local government, they adopt a “deliberate strategy to treat a certain asset class, such as land, as an investment instrument whose economic value is to be extracted, to finance other assets, such as basic infrastructure, that are needed for service provision but cannot readily be financed.”[101] Similarly, municipal real estate services providers note that “the optimum [municipal real estate] portfolio would eliminate properties with no or incomplete [value] information and maximize those whose market value equals or exceeds use value.”[102]

Given the orientation of practitioners in the field, it is unsurprising that where law and policy do not provide to the contrary, efficiency concerns drive disposition decisions. A recent flood of city-owned property sales in Phoenix serves to illustrate this point. Under Arizona state law, “a city or town may sell and convey all or any part of its real or personal property, whether or not the property is devoted exclusively to public use,” as long as it invites public bids.[103] Despite Phoenix’s sprawling growth and hot real estate market,[104] there are relatively few constraints on the sale of non-park real property.[105] All the city charter requires is that sales of city-owned property are approved by city council ordinance.[106] In 2013, the City Council approved an Excess City-Owned Property Policy, which stipulated that parcels with no planned use within the next five years and/or for which the “long term maintenance costs exceed the value of holding the property” would be preliminarily designated as “excess property.”[107] Once a parcel was designated as “excess,” the city’s Finance Department would circulate a list of identified properties to other city agencies for possible transfer;[108] those not transferred would be recommended for sale or use for other “revenue generating” purposes, and a private real estate broker would facilitate the disposal process.[109] In presenting the policy to the City Council, the city’s Chief Financial Officer underscored that bids for city-owned parcels would “need to at least equal the appraised value and anything less would need to come back to Council for approval.”[110]

By the mid-2010s, Phoenix had accumulated a substantial portfolio of government-owned real estate: an estimated 5,530 parcels covering about 90 square miles of the city.[111] Around the same time, The Arizona Republic broke a series of stories cataloguing complaints from “residents, business people, and city leaders who were frustrated that Phoenix owned significant amounts of vacant land”—by the newspaper’s estimate, around 1,400 properties.[112] The newspaper charged that the city did not keep track of how much vacant land it owned, and that “hundreds of [vacant] lots ha[d] sat idle for more than a decade, some with no use planned for the near future.”[113] The outlet collected accusations from several stakeholders, including two city councilors: one who called Phoenix a “bad neighbor,” and another who opined, “The status quo I can’t see benefits anybody . . . . This is actually a pretty good market. People are interested in building things now. They may not be interested in two years.”[114] A former mayor of the city said, “In my experience, they’re not good buyers, they’re not good sellers. They’re better off not to be in that business. They’re terrible landowners.”[115] And a real estate trade representative accused the city’s “government bureaucracy” of “dabbling in what the private sector does well.”[116]

In response to The Arizona Republic’s investigation, the city began logging all government-owned properties up for sale on a public website and took steps to dramatically shrink its real estate portfolio.[117] According to the city manager, this effort built on a culture shift at City Hall, “from viewing land as an asset that we count like desks and cars . . . to actually items that have a potential for possible income to the city.”[118] Between August 2016 and December 2021, the City sold over 400 excess properties, generating roughly $77 million in revenue.[119]

Residents and elected officials began to change their tune about Phoenix’s public land management. According to a retired real estate agent testifying before the city council, “The city has sat with this plethora of land since point of beginning and it’s just grown like mold. I’m glad we’re finally addressing this situation.” A former city councilor who led the campaign to sell city land explained, “I don’t think it should have taken this much time. Hey, when you’re dealing with an aircraft carrier, it takes a long time to turn it around. But I’m very encouraged.”[120] A real estate attorney summarized the “four-fold” benefits to the Phoenix community this way:

First, the City is recouping funds from an initial acquisition; these sales proceeds are then generally returned to the original source of funding to offset the costs arising from the original investment. Second, the City is reducing the costs of maintenance derived from the upkeep of these properties. Third, the City is reducing its potential liabilities as a real property owner. Fourth, once in private ownership, these properties are returned to the tax rolls for payment of real property taxes, which means tax dollars to support public works in the Community.[121]

Phoenix’s five-year fire sale demonstrates that where a city’s regulatory framework is lean and focused on maximizing returns to the municipal coffers, it is capable of selling public property at breakneck speed, justifying its clip in the name of efficiency. Of course, not only is maximizing returns far from the only value that matters, but it’s also unclear whether such harried transactions achieve their desired effects. For instance, sale-leaseback transactions—whereby local governments sell public buildings to private owners only to rent the space from the buyer—may “plug [immediate] budget holes but often make very little long-term financial sense.”[122] To some observers, these seemingly efficient decisions are “tantamount to selling the family china only to have to rent it back in order to eat dinner.”[123]

C. Anti-Corruption

A third value enshrined in municipal disposition law is anti-corruption in local government. The default rule that city-owned property should be sold at fair market value or to the highest bidder serves anti-corruption purposes as much as it does efficiency purposes, as it prevents the appearance of favoritism or bias in government contracting. Disclosure requirements, which occasionally crop up in disposition law, also reflect an anti-corruption sentiment. For instance, when a Chicago city councilor wants to recommend accepting a bid below the highest for a parcel of surplus land, the member must submit a sworn statement that they have no economic interest in the proposed sale and declare whether they have accepted a campaign contribution of more than $50 from the recommended bidder.[124]

State constitutional gift clauses may pose a more serious obstacle to public land conveyances. The vast majority of states have some constitutional prohibition on public spending by state and local governments for non-public purposes,[125] and a subset of these prohibitions are broad enough to cover the transfer of public property.[126] Gift clauses are traceable to a particular moment in American history: the Panic of 1837, which left states who had invested public capital in private railroad companies to absorb large financial losses.[127] In order to prevent state governments—and later on, municipal and county governments—from engaging in private speculation, state legislatures passed constitutional amendments to bar spending, lending, and the conveyance of public property for private purposes.[128] Over the course of the twentieth century, most state courts narrowed the scope of gift clauses by recognizing a broad range of public purposes to which government property could be dedicated. Still, roughly one-third of states have “strict” gift clauses without broad, judge-forged public purpose exceptions, meaning that courts may still use these clauses to strike down state and local government expenditures and conveyances of property.[129]

Though there is little scholarship examining the interaction between gift clauses and surplus land disposition, gift clauses may explain why states and municipalities are careful about authorizing the donation of government-owned land to private recipients. Where such donations are authorized, they are typically conditioned on the identity of the recipient (i.e., a qualified non-profit or charitable organization), tied to a specifically-articulated public purpose, and constrained by particular statutory procedures.[130]

D. Public Use

If the municipal disposition process unfolds against a backdrop of permissive guidelines—as scholars like Schanzenbach, Shoked, and Rosenbaum have contended—we may wonder to what extent disposition laws and policies promote the continued public use of public land. On one hand, it is often unclear how or why a particular city-owned parcel becomes “surplus,” and in many surveyed cities, there is no formal process by which government officials, let alone the general public, can question a surplus designation—except for local legislators to simply veto proposed transactions that come across their desks.[131] Thus, to the extent that public use assumes or necessitates continued public ownership,[132] the municipal land disposition process leaves much to be desired. As a legal matter, privatization is often a foregone conclusion.

On the other hand, almost all surveyed cities either have an explicitly-articulated preference for the continued public use of city-owned land after disposition[133] or relax procedural and financial requirements associated with disposition where a city-owned parcel will be used for a public purpose or by a nonprofit entity.[134]

Cities with public use preferences operationalize this priority in different ways. Some cities require that all surplus property is evaluated for a particular public use at some stage in the disposition process. For instance, all California cities are subject to the state’s Surplus Land Act (SLA), which requires local administrative agencies to alert the state Department of Housing and Community Development and local housing developers if any parcel of surplus government-owned land is potentially developable as affordable housing; alerts must also be sent to parks departments, school districts, and transit agencies if the land is instead suitable for recreational, educational, or public transportation purposes.[135] Noticed parties have sixty days to express interest in acquiring the land for a public use, and local governments must negotiate in good faith for ninety days with interested parties.[136] If multiple notices of interest are received, local governments must prioritize affordable housing development and maximize the number of deeply affordable residential units.[137] In so requiring, the SLA is one of the most substantive and public use-oriented laws governing municipal land disposition.

Even where a statute does not establish a public use priority, several cities have adopted official policies articulating their preferences. In Denver, for example, an executive order requires that the disposition of city-owned real estate should prioritize “affordable housing and community serving development opportunities where appropriate,”[138] and a policy established by the Charlotte City Council memorializes “the City’s intent to prioritize use of available City-owned Real Property for development of Affordable Housing whenever possible.”[139]

Still other cities structure their disposition processes to favor public use projects. For example, in Philadelphia’s competitive bidding process for city-owned land, the city advantages bids that will promote economic opportunity, inclusion, and social impact.[140] Alternatively, some cities forego a competitive bidding process altogether and negotiate direct sales with public interest buyers (typically, non-profit organizations and affordable housing developers).[141]

Two brief case studies illustrate how public use preferences operate in practice. In both of these cities—Seattle and Washington, D.C.—local governments concerned about a dearth of affordable housing enacted laws aimed at increasing housing production on formerly government-owned land.

1. Case Study: Seattle, Washington

Seattle has faced an escalating affordable housing crisis for decades as tech giants have “remade the city,”[142] and the forces of gentrification have pushed low-income families and households of color farther to its periphery.[143] The cost of land in Seattle has “spiked to dizzying heights,” leaving affordable developers and community organizations hamstrung in their efforts to construct housing in centrally-located areas with good access to transit, jobs, schools, and food.[144] Meanwhile, the demand for local housing funding far outstrips availability: in 2018, the Seattle Office of Housing had just $70 million in funding to disburse to affordable projects but received funding requests that totaled to $245 million.[145]

State and city adjustments in disposition law have enabled Seattle to respond to its housing crisis through the disposal of surplus land, which in turn enables the city to stretch its limited housing subsidy to cover more projects. The city has been developing this strategy since at least the early 2010s, when the Mayor’s Office and City Council convened a “Housing Affordability and Livability Advisory” (HALA) Committee tasked with developing policies for increasing Seattle’s affordable housing stock.[146] According to the HALA Committee, the city could make creative use of its surplus property to address rising housing costs and the patterned displacement of low-income households.

Seattle city government’s interest in surplus properties was also spurred by the success of the Central Puget Sound Regional Transit Authority (Sound Transit)’s donation and sale of its surplus land to affordable housing developers. In 2015, the Washington State Legislature passed a law requiring that regional transit authorities donate, sell, or lease their surplus property for the purpose of affordable housing development.[147] Sound Transit has since made several high-profile donations and below-market sales of its surplus property: for example, in 2017, the authority donated a half-acre of land to two housing nonprofits, who are constructing a 13-story complex with over 300 affordable units for low-income households and seniors transitioning out of homelessness.[148]

Around the same time, Seattle and King County administrators identified hundreds of vacant or underutilized government-owned lots within the city’s limits.[149] Local administrators, however, encountered a problem as they brainstormed ways of using this land for the public good: by law, surplus city land could only be sold at market rate prices, which created a barrier to developing low-cost rental housing. King County Assessor John Wilson explained, “I’ve become more and more convinced that we have adequate land capacity to solve the housing problem in this county. It’s a question of ‘Do we have the will?’”[150]

By March 2018, sufficient political pressure had mounted, and the Washington State Legislature voted to authorize cities to sell or donate their property for the publicly beneficial purpose of housing affordable to households earning at or below 80% AMI.[151] In July of that year, the Seattle City Council passed a resolution that allowed the city’s electric utility—Seattle City Light—to sell its surplus property at below-market rates.[152] By the fall of 2018, the City Council passed another resolution, requiring that all city agencies prioritize affordable development when disposing of their surplus property and that 80% of net proceeds from land sold for non-affordable housing purposes must be donated to the city’s Low-Income Housing or Equitable Development Funds.[153] Although Seattle had already adopted a detailed disposition policy in 1998,[154] the 2018 reforms clearly established affordable housing as the primary goal of surplus land disposition.

This cascade of legislative changes at the state and local level has begun to produce results. For instance, in 2019, the city announced that it would donate two parcels of surplus City Light land to the Homestead Community Land Trust and Habitat for Humanity Seattle-King County for the development of permanently affordable, owner-occupied homes in Northwest Seattle.[155] Although the long-term impact on affordability remains to be seen, these initial donations signal the city’s decision to prioritize public use through land disposition.

2. Case Study: Washington, D.C.

Like Seattle, Washington, D.C. has experienced rapid growth, rising home values, and increased housing prices over the last two decades. According to the National Community Reinvestment Coalition, the District had the highest percentage of gentrifying neighborhoods in the country between 2000 and 2013.[156] Gentrification has had a racially-disparate impact as well as an economic one. Nearly one in five lower-income neighborhoods in the city gentrified during the time period in question,[157] and more than 20,000 Black residents are estimated to have been displaced from their neighborhoods as a result.[158]

By the mid-2010s, over 50,000 families in the District faced a severe housing cost burden (i.e., spent more than half their household income on housing). Public housing in the city had a waitlist of roughly 70,000 people, and homelessness was on the rise.[159] Early on in the administration of Mayor Vincent Gray, a citizen task force advised that affordable housing should become a top policy priority for city government and set a target for the District: create or preserve 10,000 affordable housing units in the city by 2020.[160]

To help the city reach this goal, the Council of the District of Columbia passed the 2014 Disposition of District Land for Affordable Housing Amendment Act, which established affordable housing set-aside requirements for any surplus District-owned land earmarked for private multifamily residential development; the law requires that 20% to 30% of housing units in a proposed residential development be permanently affordable to low- and very low-income households.[161] The Mayor may transfer property at less than its appraised value or provide additional subsidies to the developer to ensure that affordable housing requirements can be met.[162]

To the dismay of some advocates,[163] the law allows the Mayor to waive affordable housing requirements when (i) the appraised value of the property is deemed insufficient to support affordable requirements, (ii) the “terms and conditions under which the real property is to be disposed satisfy the housing requirements to the maximum extent possible,” and (iii) the Chief Financial Officer has substantiated the financial status of the disposed land.[164] In addition, the law permits the Mayor to reduce affordable requirements if the sale of a particular parcel can finance the development of a “significant public facility,” such as a fire station, public library, school, stadium, or homeless shelter.[165] These provisions reflected a compromise between the Council and Mayor Gray, who—despite his administration’s commitment to affordable housing—had expressed concern that reducing mayoral discretion would hinder the District’s flexibility in developing public lands and securing future property taxes.[166]

Since the law went into effect in early 2015, several land dispositions have been approved with moderate to significant affordable housing set-asides.[167] According to disposition agreements for at least some of these projects, the residential development may not have “penciled out” without the District’s flexibility on pricing (as well as its investment of housing subsidy).[168] Evidence also suggests that the 2014 law is forcing market rate developments to include affordable units where they might not otherwise have done so. For instance, the District was in the process of negotiating the disposition of the Grimke School, a former D.C. public school facility, when the Council enacted its 2014 reform of the city’s disposition process. Based on the new law, the District returned what had been the developer’s “best and final offer” on the property and asked the bidder to submit a new offer that would fulfill the new 30% affordable housing set-aside requirement.[169]

Whether or not the 2014 reform consistently catalyzes affordable housing development is difficult to ascertain, especially in the relative short-term. Nevertheless, the District’s adaptive adjustments to the disposition process give legal force to affordable housing as a policy priority.

E. Values Embedded in Disposition Law: Mutual Reinforcement and Conflict

Transparency, democratic checks and balances, efficiency, anti-corruption, and public use are all animating values in municipal land disposition law. As the foregoing analysis has shown, transparency and democratic checks and balances are perhaps the most consistently-enshrined values across major American cities: when a local government seeks to dispose of a parcel of land it owns, it must usually provide advance public notice and seek executive or legislative permission to do so.[170] Anti-corruption measures reinforce the goal of transparency by preventing local officials from transacting in city property sub rosa or for their own financial or political interest. Aside from the potential hurdles thrown up by state constitutional gift clauses, the transparency, checks and balances, and anti-corruption values do not seem to have generated particular controversy in disposition transactions.

By contrast, efficiency and public use are more politically salient in debates over the future of city-owned land.[171] By default, surplus parcels are usually sold at fair market value or to the highest bidder—reflecting the importance of maximizing financial returns to local government. However, almost all surveyed cities have crafted disposition laws that either favor or indirectly facilitate public use; in this way, the disposition of city-owned land becomes a vehicle for promoting urban policy goals like increased affordable housing development.

The tension between an efficiency approach and public use approach to land disposition is self-evident: when a city conveys the land it owns to a nonprofit organization or affordable housing developer at a below-market rate, it likely forgoes the opportunity to maximize sales and future tax revenue. Ultimately, in the words of Seattle Councilmember Teresa Mosqueda, “public land can be used for the best value, which is not necessarily the highest market value.”[172] For example, in one of Seattle’s first disposition deals following the passage of its 2018 surplus land resolution, the city sold 2.86 acres of land to a life sciences campus developer for $143.5 million; this price reportedly represented a $38 million discount to the buyer, who promised to develop almost 200 units of low-income housing on-site.[173] The popularity of the public use value demonstrates that market-based efficiency does not always win out in the struggle over city-owned land.

III. Toward a Normative Vision for Public Land

This Note has identified several key values that drive the municipal land disposition process. My findings support other scholars’ characterization of the process as discretionary: instead of facing hard-and-fast requirements, cities have flexibility to adapt the process based on the nature of the parcel, the identity of the potential buyer, and the future use of the property. But my survey also suggests that, at least on paper, disposition is not necessarily the “thoughtless” or “unfettered” process that it may seem to be at first glance. This is not to say that cities don’t sometimes enter into ill-advised or short-sighted real estate transactions, as Schanzenbach, Shoked, and Rosenbaum persuasively argue. My findings simply demonstrate that there are both overarching values and specific policy parameters that purport to govern the disposition process—even if city officials ultimately hash out the details of property deals on a case-by-case basis.

This preliminary empirical analysis leaves many questions unanswered, especially the kinds of normative questions raised by the struggle over Intuit Dome and similarly flashy urban development projects. Is continued government ownership the optimal way to ensure that municipal land benefits both the general public and historically-marginalized communities? Are there other ways of keeping “public land in public hands”[174] without local government holding formal title?

In this final Section, I consider theoretical and grounded approaches to these questions. First, I weigh the arguments for and against market-based land privatization, concluding that the problems associated with relinquishing public control over city-owned urban land outweigh the alleged benefits of privatization. Next, I explore the multiplicity of public landownership, which encompasses both state ownership and social/communal forms of ownership. Drawing on this multiplicity, I propose two novel values that should infuse the local land disposition process: government stewardship and community stewardship.

A. The Problem with Privatization

Disposition law typically takes as its starting point that a particular parcel of city-owned land is “surplus”—i.e., no longer necessary for government purposes—and thus best suited for private ownership. In other words, once a parcel is designated as surplus, privatization is often a foregone conclusion.

To diagnose the problems associated with the privatization of public land, it is first necessary to understand the arguments of its proponents, most of whom have focused their attention on the privatization of federally-owned public lands. In his recent book In Defense of Public Lands, political scientist Steven Davis outlines the typical defenses for federal land privatization, several of which apply to local urban land as well.[175] First, privatization theorists rely on tenets of classical economics to argue that “public land short-circuits the whole process by which a rational market can determine the best use of a given resource and thereby maximize productivity.”[176] Because the users of public land do not have secure, transferable property rights in public land, the cost of maintaining the land lies with government, and, by extension, a host of non-user taxpayers, which in turn creates inefficiency.[177] Proponents also argue that state ownership leads to undisciplined land management: “no one takes care of public land because it does not really belong to them.”[178] Invoking Garrett Hardin’s “tragedy of the commons” theory, proponents of privatization contend that “good intentions and moral righteousness rarely deliver the goods; the only factors that can produce good environmental behavior are market incentives.”[179]

Second, privatizers argue that interest-group competition for access to public land leads to a system of informal private rights that are unequally distributed: public resource allocation becomes “a process of ‘public bickering over entitlements and influence peddling,’ degenerating ultimately into a ‘rent-seeking frenzy.’”[180] As Davis summarizes, the impulse to privatize derives from an aversion to “‘politics’ in practically any form.”[181]

In short, proponents of land privatization contend that public landownership is (1) economically inefficient and (2) politically unfair. At the local government level, there is also a more pragmatic defense of privatization: cash-strapped governments view selling city-owned land as a mechanism for generating revenue (both through the sale itself and through long-term tax revenue generation) and relinquishing long-term managerial obligations. For instance, the mayor of Trenton, one of New Jersey’s lowest-income cities, described real estate auctions as “key to [the city’s] redevelopment efforts, especially when they get promising properties in the hands of taxpaying residents who can renovate them for the benefit of the surrounding community.”[182] Capital gains from the sale of public lands can also help fund new public facilities and initiatives, and “the sale and redevelopment of public land as a financing tool has increased in popularity in recent years” due to persistent debt crises and an era of fiscal austerity.[183] In other words, many local governments would also argue that public ownership is (3) unwise.

In response to these three arguments, critical geographers and political economists have diagnosed a plethora of problems associated with privatization, problems that call into question the supposed benefits of market-based land distribution.

First, rather than avoiding inefficiency, privatization actually raises the more dire challenge of market failure. As environmental economist John V. Krutilla explains, the private land market is predicated on the “ration[ing of] scarce resources to their highest valued uses by excluding all the bidders who were unwilling or unable to pay the market price.”[184] A focus on this kind of price efficiency tends to ignore the value of features that private landowners cannot appropriate.[185] Framed differently, the private market almost definitionally emphasizes the “exchange value” of land—that is, its value as a commoditized asset that generates or has the potential to generate rent—over its “use value,” or the idiosyncratic “preciousness” of land to its users.[186] In the words of sociologists John R. Logan and Harvey Molotch, “the pursuit of exchange values in the city does not necessarily result in the maximization of use values”—in fact, “the simultaneous push for both goals is inherently contradictory.”[187]

The commodification of urban land not only tends to sideline its use value, but also fuels speculation.[188] A “fundamental ‘curiosity’” of land markets is that they are “inherently monopolistic, providing owners, as a class, with complete control over the total commodity supply.”[189] This characteristic of land markets places excessive pressure on land values, especially in dense urban areas—a pressure that is only exacerbated by the manner in which urban land, buildings, and infrastructure are traded on global capital markets as assets[190] and targeted for speculation by foreign and national corporations,[191] private equity funds, and other opportunistic investors.[192] “Speculation in land may be necessary to capitalism,” geographer David Harvey has argued, but excessive bouts of speculation “periodically become a quagmire of destruction for capital itself.”[193]

Second, while supporters of privatization argue that government management is unfair, public ownership proponents stress that the market-based distribution of land is itself distressingly unequal and a driver of larger structural inequality. On a theoretical note, according to thinkers as different as Adam Smith, John Stuart Mill, and Karl Marx, the manner in which private landowners earn rents (i.e., the income they generate from selling their land’s “use-rights”) represents a basic injustice:[194] in general, private landowners accrue rent passively and generate capital gains (i.e., the increase in land value over time) due not just to the improvements they make on land, but instead to wider macro-economic development.[195] This arrangement is unjust in many senses, but particularly in that it deprives non-landowning society of the economic gains that it has helped to create.[196]

On a more concrete note, urban land and home ownership are concentrated not only among white wealthy residents[197] but also increasingly among foreign corporate landlords, both in global metropolises like New York City[198] and in small to mid-sized American cities (such as Newark,[199] Milwaukee,[200] and Baltimore[201]). Concentrated land ownership creates power imbalances between landowning and non-landowning classes of urban residents within cities and also contributes to nationwide income and wealth inequality.[202]

In addition, while supporters of privatization argue that the private, market-based distribution of land appropriately sidesteps the thorniness of politics, supporters of public ownership stress that political contestation is precisely the point. As Brett Christophers asserts, land ownership confers particular powers, including the power to “play a meaningful part” in shaping how a community develops.[203] When public assets are sold off, “the particular capacity for public self-determination conferred by state ownership and control of the land” is also lost.[204] In other words, if the possibility of political self-determination is uniquely preserved through continued public ownership, “the ‘open processes’ of politics, whether of the ‘high’ or ‘low’ variety . . . are actually nothing to apologize for.”[205] Indeed, “to give up on politics, as privatizers urge, is to permanently privilege individually held preferences while essentially ignoring collective ones”—an especially threatening proposition when “some values, by their very nature, can be realized only collectively.”[206] To the extent that particular private actors enjoy privilege in access to or use of public lands, the solution is greater procedural transparency—not privatization, which only threatens to make access to resources more opaque.

The third and perhaps most grounded justification for privatization—that it provides a pragmatic solution to local budget shortfalls, alleviates government of administrative burdens, and is thus the wisest outcome—also falters upon closer scrutiny. At best, rapidly selling off public property plugs immediate budget holes and improves short-term liquidity, but it does not address structural drivers and magnifiers of municipal fiscal crisis—including racial segregation,[207] regional inequality,[208] and predatory financing,[209] among other things. And at worst, rapidly selling off public property may not even solve shorter-term liquidity problems where local governments must make more costly arrangements (e.g., sale-leaseback transactions described infra at 655) to adapt to the loss.[210] Finally, the managerial shortcomings of absentee corporate landowners—“content to sit on the land while property values rise”[211]—call into question whether private investment necessarily leads to better management in the short-term or reduced management obligations for local governments in the long-term. In short, privatization may very well be the unwise option, even from the perspective of a fiscally-pressed city.

The problems associated with land privatization suggest the need for local governments to rethink the starting premise of the disposition process—i.e., that land that the government is not currently using (or even land that it is) should be destined for private, for-profit development.

B. The Multiplicity of Public Ownership

If the privatization of public land has problematic effects, then a normative vision for local land disposition should incorporate a slant in favor of public ownership. But teasing out precisely what public ownership entails is trickier than it seems on first blush. As geographer Doreen Massey has put it, “there are two distinct aspects . . . to [the] issue of landownership. It is a question not just of who owns, but also of what that ownership actually means.”[212] Luckily, scholars and advocates have provided the insights necessary to design a disposition process that promotes public ownership in its most meaningful sense.

Property theorists have long acknowledged that the concept of public property contains multitudes.[213] Indeed, “public ownership can take as many forms as can private.”[214] Political scientist C.B. Macpherson distinguished between two kinds of public property: state property, which “consists of rights which the state has not only created but has kept for itself or has taken over from private individuals or corporations,” and common property, which is property that belongs to society at large and, in a sense, “guarantee[s] to each individual that he will not be excluded from the use or benefit of something.”[215] State property is not the same as common property, Macpherson insists; state property conveys something like a “corporate right to exclude,” belonging to the government as a legal body that has been authorized to rule, rather than to a broader public.[216]

Carol Rose has made a similar point: “there lies outside purely private property and government-controlled ‘public property’ a distinct class of ‘inherently public property,’” Rose observes, “which is fully controlled by neither government nor private agents.”[217] While government-controlled public property is “‘owned’ and actively managed by a governmental body,” inherently public property is “collectively ‘owned’ and ‘managed’ by society at large, with claims independent of and indeed superior to the claims of any purported governmental manager.”[218] Implicit in the notion of inherently public property is that “even if a property should be open to the public, it does not follow that public rights should necessarily vest in an active governmental manager.”[219]

Macpherson and Rose’s theoretical work makes clear that public ownership includes more than just government ownership: it also encompasses forms of social or communal ownership that operate parallel to, but separately from, the state.

The multiplicity of public ownership has direct consequences for a normative, values-based theory of local land disposition. On the one hand, local laws could combat the ills of privatization by promoting state land retention and relegating disposition to the margins of the decision-tree that city government uses to manage its landholdings. As a value animating disposition, we might call this government stewardship. On the other hand, disposition law could instead foster forms of non-state, community-based ownership, serving to transfer land from the city’s portfolio to collectives of residents who promise to tend to it as a decommodified urban commons resource. We might call this community stewardship.

These values—government stewardship and community stewardship—are complementary and necessary to maintain city-owned land as a truly public good, even when local governments perceive no immediate use for a parcel.

C. The Value of Government Stewardship

One avenue for avoiding the ills of urban land privatization would be to instill a new value in the local land disposition process: the value of government stewardship. To prioritize this value would mean encouraging the government retention of public land. In other words, just because land lacks a current government use does not mean that title should be permanently transferred to a non-governmental actor or entity.

The justifications for continued government land ownership are multiple and interrelated. First, state retention of public land helps local governments avoid entrenchment. Governments are not supposed to be able to bind future governments through unrepealable legislation or irrevocable executive action (though exceptions to this general principle are admittedly “widespread”).[220] As property scholar Christopher Serkin explains, “the simple act of alienating property can be entrenching,” as it “removes from public control a resource that otherwise would have been available to future governments.”[221] Although certain parcels of land may have less constraining impacts than others, disposing “some kinds of resources might: water systems, developable property, natural habitats, parking meters, municipal buildings, airports, highway infrastructure—the list goes on.”[222] Ultimately, Serkin suggests, “[i]f a government relinquishes control over a resource that will be difficult or impossible to replace, and that is required for some other public goal—providing recreational facilities, controlling development, preserving local wildlife—it limits the policy options available for future governments.”[223]

Second, selling state property now may force governments to compete in the private market later, in ways that they are not necessarily well-equipped to do. While local governments often sell property in a financial pinch, the decision to dispose of a parcel does not necessarily reflect a reduced need for affordable land: indeed, cities need land to carry out their most “indispensable functions”—from infrastructure development to the provision of education and healthcare.[224] “[I]f the state sells a needed asset—such as a state office building—with the intent of leasing it back,” argues David Super, “future legislatures will have little choice but to continue to lease that or a similar asset.”[225] This not only ties future government hands, but also puts the state at a disadvantage: “competing for leasehold land in a competitive tenancy market would provide no guarantees of getting the right land in the right location, and still less of securing the land on reasonable terms or of retaining the land at the end of the agreed tenure period.”[226] In other words, government needs security in its assets to carry out core functions, and the private land market does not provide these kinds of guarantees.[227]

Third, state retention of land bolsters governmental power. Although a local government has the power to control urban development through both regulation and contracting, its power is at an apex when it is exercised through property.[228] Whoever owns land controls how it is accessed and used—so when land is owned by the state, the public (at least in principle) can exercise this power of determination using government as its apparatus.[229]

Two examples from property law reflect the importance of government land retention, though neither provides a perfect analogue to local government ownership of urban land. First, the public trust doctrine (PTD) embodies the importance of government stewardship of public lands. While a full-scale review of the doctrine is beyond the scope of this Note, the principle behind the doctrine is that the public has an interest in, and needs access to, particular kinds of land, even when that land does not serve a governmental function. While the PTD has historically only been applied to navigable waterways and adjacent land, the doctrine conceptualizes government as a “trustee” to present and future beneficiaries,[230] so government land ownership is about more than active state use: it is about stewarding resources for the public.[231]

This is not to say that the value of government stewardship would necessarily entail the application of the PTD to municipal parcels. As a purely practical matter, the PTD is only likely to affect the disposition of a small subset of navigable water-adjacent, local government-owned properties.[232] And as a theoretical matter, even the doctrine’s most ardent supporters would balk at the idea that government-owned property is per se part of the public trust. According to Joseph Sax, property subject to the trust must be held available for the general public’s use and “maintained for particular types of uses” in perpetuity.[233] Municipal office buildings certainly would not meet these requirements, and neither would vacant or underutilized lots that cities and urban residents adapt for different purposes as time elapses. Instead, the PTD reflects the importance of government holding land for the benefit of future generations,[234] both by limiting the government’s power to convey trust resources to private actors[235] and by imposing on government the “affirmative, ongoing duty to safeguard the long-term preservation of those resources for the benefit of the general public.”[236]

Second, federal public law underscores the state’s crucial land stewardship role. Federal statutes such as the 1934 Taylor Grazing Act and 1976 Federal Land Policy and Management Act (FLPMA) shifted the focus of federal public lands policy from disposition (to states, settlers, miners, railroad companies, etc.) to retention.[237] In particular, the FLPMA created a strong presumption in favor of continued federal government ownership: “the public lands [shall] be retained in Federal ownership, unless [. . .] it is determined that disposal of a particular parcel will serve the national interest.”[238] Of course, federal government ownership has not wholesale disrupted private and industrial use of public land.[239] Instead, once land comes under the protective shield of federal government ownership, re-privatization is unlikely.[240]

Most city-owned land does not contain the kinds of natural resources that the PTD and federal public lands law seek to protect. Still, municipal land disposition law should recognize that “the value of [local government-owned] land inures to the benefit of the citizens of the community regardless of whether it is dedicated to a [particular government] use or is maintained as an open parcel for potential future development.”[241] The benefit of continued public ownership is that it “does at least preserve the possibility of the public having some kind of say over land use. If public land is sold off to the private sector, that possibility is gone.”[242]

D. The Value of Community Stewardship

Although government stewardship should serve as a guiding value in local land management, “government control alone does not guarantee a democratic outcome.”[243] Histories of excess condemnation, urban renewal, and “municipalization by dispossession” demonstrate that transfers of land from the private sphere to the state do not necessarily result in increased public control over land.[244] Reflecting on changing patterns of landownership in the United Kingdom in the 1980s, Massey warned that just taking land into public ownership is not enough to counteract the problems associated with privatization: all too often, local authorities’ “dominant consideration” is “more one of maximizing financial return than of maximizing social benefit.”[245] For this reason, “a change in ownership will not of itself guarantee a real change in how the market works, nor necessarily enable movement towards a system where the social goals of planning can be the dominant determinant of land use.”[246]

In response to the unrealized promises of government ownership, activists and legal scholars have developed alternative frames for thinking about public land ownership—ones that emphasize community control and non-speculative, non-governmental modes of development.[247] Sheila Foster, for example, draws attention to low-income mothers of color in Los Angeles and Philadelphia who recently occupied vacant homes owned by state and local agencies. In so doing, the mothers “call[ed] into question the state’s posture of allowing idle vacant and available land and structures while so many residents lacked basic goods and necessities.”[248] Similarly, Amy Laura Cahn and Paula Segal document how communities of color in Philadelphia and New York have transformed empty city-owned lots into urban gardens “as a direct response to abandonment, filling vacancy with neighborhood life.”[249] Unfortunately, these reappropriations are tenuous at best. Even when local governments recognize neighborhood investment by granting licenses for “interim uses” of vacant property, such recognition is temporary: urban garden licenses, for example, are revocable without cause at any time.[250]

These alternative frames suggest the need to incorporate an additional value into the municipal land disposition process: community stewardship. Community stewardship, in this context, does not necessarily include just any form of collective land ownership or management in cities. Institutions like homeowner associations,[251] park conservancies,[252] business improvement districts (BIDs),[253] and even many housing cooperatives[254]—while collectively managed—are often fixated on increasing land value and financial return in ways that exclude and impose costs on communities with the least access to their governance structures.[255] As Sheila R. Foster and Christian Iaione argue, shared resources can be “captured, co-opted, and enclosed in ways that undercut the very public nature of the resource”:

It is not enough . . . to enable new forms of collectively governed institutions throughout a city that manage public or shared resources. We must also be able to assess whose interests are served by those institutions and how easily they can be captured and their value extracted in ways that aggravate and deepen social and economic inequality.[256]

For this reason, I define community stewardship as the decommodified ownership and caretaking of land by a collectively governed, community-based entity that amplifies the voices of city residents who have been historically marginalized based on their class position, racial group, or other social or economic identity. Defined in this way, two features inhere in the concept of community stewardship: (1) community-stewarded land is removed from the speculative pressures of market and treated as a “commons” resource, and (2) community-stewarded land is governed through a representative body that equitably redistributes decision-making power.

Lurking beneath the notion of community stewardship is the concept of the “urban commons,” which has become a subject of fascination for urban studies, property, and local government law scholars in recent years. The urban commons literature often takes as its starting point economist Elinor Ostrom’s work on “common pool resource” (CPR) systems, collectively governed by communities in ways that resemble neither the state nor the market.[257] Ostrom’s research demonstrates how, under certain circumstances, “resource users collectively decide how to produce value from the resource, enforce rules and norms of use, and avoid overconsuming or depleting the resource over time.”[258] As such, Ostrom’s findings challenge Hardin’s characterization of the commons as susceptible to overuse and underinvestment.[259]

There is a natural harmony between cities—i.e., “site[s] where people of all sorts and classes mingle”[260]—and commons—shared resources that are “open to, shared with, and belonging to many types of people.”[261] Yet it is not as simple to adapt Ostrom’s ideas to the city as they have been applied to natural resource governance. Urban land and infrastructure are unique resource types: “cities are already-commodified spaces, where property lines have been drawn and ownership declared at a fine-granted scale.”[262] In addition, reclaiming an urban commons “typically requires working with strangers.”[263] Intra-city diversity along lines of race, class, and other social cleavages raises unique challenges to collective governance—at least as compared to the small, homogenous communities that Ostrom describes in her work.[264]

Nevertheless, scholars have developed robust theories of urban common resources that apply elements of Ostrom’s work to city environments and modify other elements. Consistent with Ostrom’s observations about CRP systems, urban plazas, farms, parks, neighborhood amenities, and other commons resources represent sites of somewhat “loosen[ed]” local government control, insofar as “a private collective” is “provid[ing] supplementary services and good within a geographically bounded area.”[265] But as Foster and Iaione show, the “role of central authorities or the state is even more present in the creation and sustainability of the urban commons” than it is in Ostrom’s CRP communities because “many urban resources that residents or communities want to share and manage together are, at least formally, under the control of the state.”[266] Foster and Iaione argue that the ideal role for the state under a polycentric urban governance regime is to act as an “enabler.”[267] On this view, public authorities do not enjoy a monopoly over common assets, but instead play a catalytic role by helping to form and sustain new institutional structures.[268]

Realizing the value of community stewardship through the local land disposition process requires treating urban land as an urban commons resource, rather than a market commodity.[269] Community stewardship also requires redistributing power through deliberative democratic governance institutions, and allocating rights and responsibilities in a way that deprioritizes “sole dominion and the individual exchange of property.”[270] Finally, community stewardship does not erase the role of the state, but necessitates the “stabiliz[ing]” and “enabl[ing]” force of government.[271]

Perhaps the paradigmatic example of the community stewardship of urban land is the community land trust (CLT). Though exact institutional designs may differ, CLTs are organizations that own parcels of land and sell or lease structural improvements made on those parcels—typically, houses—to low-income renters or buyers, who in turn agree to long-term affordability restrictions. The fundamental premise of the CLT is a “horizontal separation of property” to create two distinct units of real estate: a parcel of land and the structure(s) on top of it. [272] In the case of an affordable housing CLT, this separation allows the CLT to share equity with the homeowner. The relationship between the CLT and the homeowner is cemented through a long-term, renewable ground lease—typically 99 years in length—that include pertinent use and affordability restrictions.[273]

Two features of CLTs qualify them as urban commons institutions. First, CLTs create an alternative ownership structure that disrupts market forces by “offer[ing] an intermediate form of land ownership and control between the speculative market and the State.”[274] “In separating land ownership from homeownership, the CLT model isolates land’s use value from its exchange value via the ground lease mechanism” because the affordable land rent and restricted resale price subdue the land’s exchange value.[275] Second, at least in theory, CLTs promote community control of urban land. In its classic form,[276] a CLT is “more than a deed and a ground lease”: it is an organization that governs through a tripartite board with different stakeholder representatives—residents and leaseholders, non-resident community residents, and other members of the public.[277] CLTs are urban commons institutions not simply because they promote a public good (e.g., affordable housing), but also because they promote collective, representative governance.[278]

Critics of professionalized CLTs have trenchantly argued that “the ideal of community control” has largely “faded from CLT practice,” with many trusts focused primarily on winning grant funding for affordable housing through generic and regimented objectives, budgets, and record-keeping.[279] Without a collective self-management structure that empowers marginalized groups,[280] a CLT loses its character as a commons institution, simply becoming another “tool for providing affordable housing” that “downplay[s its] role in empowering poorer people to control land in perpetuity.[281]

In its fullest sense, however, CLTs represent community stewardship of a commons resource: urban land. And as Foster and Iaione stress, even though local communities exercise control over the resource, the state is never far away: local government enables CLTs to “function” and to “thrive.”[282] For example, in 1989, the city of Boston facilitated the creation of the famed Dudley Street Neighborhood CLT by granting the trust eminent domain authority over an array of vacant lots in the distressed neighborhood and allowing the CLT to acquire over fifteen acres of city-owned vacant lots.[283] Governments can also ease regulatory barriers to CLT funding and improve tax assessment and treatment of CLTs.[284]

E. Operationalizing Stewardship Values

The foregoing sections have justified the introduction of two new values in the local land disposition process: government stewardship and community stewardship. Both of these stewardship-focused values promote the public character of urban land by insulating it from the vicissitudes of the private market and placing decision-making power into governance vessels that are, at least in principle, accessible to otherwise marginalized communities.

In so doing, these principles add to the mix of values identified earlier in this Note. The stewardship values are not only about procedural transparency and good government, nor are they concerned with maximizing financial gain from land sales to achieve economic “efficiency.” Stewardship values are also distinct from the public use value in that the goal is not so much to promote particular policy objectives (e.g., affordable housing, green space, community economic development)—even if they have such an ancillary effect. Instead, the stewardship values endorse public ownership for its own sake, where public ownership entails (a) the decommodification of urban land and (b) the institution of democratic governance structures poised to redistribute decision-making power.

In closing, I note a few ways in which cities might begin to operationalize stewardship values in the local land disposition process. First, to promote government stewardship, cities could focus upstream on the decision to designate a particular parcel of government-owned land as “surplus.” Cities should engage in a comprehensive analysis of the parcel’s potential uses and long-term social and political value before deciding it is no longer necessary for government purposes.[285] At this comprehensive review stage, disposition law could impose a presumption that government should retain the land it owns—unless, for example, the circumstances suggest that a community steward is better-situated to manage the parcel.

If it becomes apparent that transfer makes sense after this comprehensive parcel-by-parcel review, cities should also consider alternatives to permanent disposition that would allow government to hold long-term title to urban property. For instance, city agencies could consider using long-term ground leases or rights of first refusal as legal tools to secure or option title to public land.

Second, to promote community stewardship, cities should “sensitively gear[]” their disposition “criteria”[286] to reward nonprofit community institutions that promise to treat city-owned land as a decommodified, democratically-governed commons resource. An example serves to illustrate the need for more sensitive criteria. For decades, New York City’s Department of Housing Preservation and Development (HPD) has had a “tradition of selling unused property for one dollar to incentivize development, encourage nonprofit developers to apply for the lots, and free the city of maintenance costs.”[287] While some of these lots have gone to community-based organizations, others have been claimed by market-rate developers.[288] Between 2014 and 2018, data suggests that 78 percent of city-owned lots in HPD’s jurisdiction were transferred to for-profit development entities.[289] More recently, the city announced that a for-profit/non-profit development partnership would develop a property owned by the Metropolitan Transportation Authority New York City Transit into a mixed-income project with 75% luxury, market-rate units.[290] As for-profit companies have capitalized on the sale of city-owned lots, the New York City Community Land Initiative has spearheaded a legislative campaign to prevent the mayor and city agencies from disposing of municipal land to for-profit developers unless no qualified CLT or nonprofit organization makes an offer.[291] This proposal not only rejects market-based efficiency as a governing value for disposition decisions, but also embraces a community stewardship value that is conceptually distinct from “public use”: the goal is not just to create more affordable housing units, but to actively prioritize local CLTs and nonprofit organizations that have a less commodified and more democratic vision for urban land.

This initial exploration of the law undergirding municipal land disposition elicits more questions than answers. While this Note has mapped out the values embedded in the disposition process, there is far more to learn about how disposition unfolds on the ground, how it interacts with local planning and zoning processes, and what kinds of long-term distributional and development impacts it has on cities. And while this Note has proposed a pair of new values that ought to inform disposition, there are perhaps many more considerations worth entertaining, depending on the physical, political, and demographic features of a particular city.

Though the disposition process may strike some as arcane or small-bore, the stakes are ultimately high: “If the government disposes of public land, it disposes of the public power associated with it. There surely cannot be many government decisions that matter more in a democratic society.”[292]

APPENDIX

Table 1. Sample of State Statutes Governing the Disposition of Local Government-Owned Land

Table 2. Surplus Land Laws & Policies in a Sample of American Cities