Summary Of Fee Simple Obsolete By Lee Anne Fennell

Fee Simple Obsolete, by Lee Anne Fennell, presents a radical and thoroughly engaging discourse on the fundamental nature of property. Chiefly, it asks whether the temporal and physical monopoly property ownership entails has a place in an increasingly urban world. It then proposes two novel forms of property, the callable and floating fees, as potential means of achieving the synergistic uses of land that create value in cities. However, the Fee Simple Obsolete also poses significant problems, ones that disproportionately impact the poor and vulnerable. This critique will first address specific critiques directed towards the property schemes proposed, noting their effects on marginalized groups and small businesses. After, it will turn towards

The callable fee gives an option to buy large lots to a developer, exercisable at a future date when development conditions are ripe. When exercised, a developer takes hold of the entire designated area and constructs upon it, presumably making a synergistic combination of retail, housing, and entertainment properties. The city determines the strike price and conditions to purchase. The author gives examples that include drops in property values and density shortfalls. Until then, the land remains in its original state, usually housing and small businesses. The advantages are two-fold, the author suggests. First, it allows for synchronized changes in ownership which expedites the development process. Second, the non-voluntary nature of the fee trumps problematic holdouts or at least incentives collective action to avoid the fee’s trigger conditions in such a way as to obviate the need for a developer. And while the fee seems appealing on a macro level, its consequences could be devastating for lower class

As the authors note, the “risk of the property being called would be priced into the value of the property, as would the potential for nearby development that would enhance the value of the property.” In this alternative paradigm, the lower classes would be self-selected into purchasing or renting on these properties, especially ones whose option exercise may be imminent. After all, when faced with the choice between concrete positives (e.g. putting bread on the table) and more ethereal ones like ownership stability, many will choose the immediate necessary benefit. Consequently, only upper classes will be able to access continuity of ownership and the spillover benefits from neighboring callable fees (i.e. access to the amenities put in place of the now dispossessed poor). Meanwhile, those on the lower rungs of the socio-economic ladder are continually uprooted—forced to move between neighborhoods at high risk of call or expelled entirely from the urban area. Those who own property are unlikely to have the social, political, or economic capital necessary to stave off purchase. After all, it is no easy feat to organize and revitalize an entire block, especially with the pressing concerns that dog the working class. The situation is even worse for those who rent, as the power to improve the property lies with landlords who may be absent,