Lee Anne Fennell, ‘Fee Simple Obsolete’

Abstract:
Urbanization has dramatically altered the way in which land generates and forfeits value. The dominant economic significance of patterns of land use and the opportunity costs of foregone complementarities have made the capacity to reconfigure urban property essential. Yet the architecture of our workhorse tenure form – the fee simple – is ill-suited to meet these challenges. The fee simple grants a perpetual monopoly on a piece of physical space – an ideal strategy when temporal spillovers loom large, interdependence among parcels is low, most value is produced within the four corners of the property and cross-boundary externalities come in forms that governance strategies can readily reach. But times have changed. Categories of externalities that were once properly ignored by the fee simple have become too important to continue neglecting. This paper argues for alternative tenure forms that would move away from the endless duration and physical rootedness of the fee simple.

Fennell, Lee Anne, Fee Simple Obsolete (January 17, 2016). University of Chicago Coase-Sandor Institute for Law and Economics Research Paper.

First posted 2016-01-19 07:00:45

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