Freeing the City to Compete

James J. Kelly Jr., University of Notre Dame


In this paper, I examine how the rights of owners, lenders and residents threaten the functioning of real markets in distressed urban neighborhoods, perpetuating the pall that vacant and abandoned houses cast over their future. Even a single abandoned house can present an example of how the rights of several stakeholders create a form of gridlock known as anticommons, which isolates that property from a potentially transformative transfer of title. In addition to this legal anticommons, some neighborhoods are so beset by vacant property problems that they require coordination of investment that is frustrated by both the multiplicity of private ownership interests and the rights of the residents to be protected against forced relocation. Ultimately, these costs of moving communities forward to a more viable future can prevent them from going anywhere. In confronting transaction costs through title assembly as well as "soft" and "hard" varieties of land assembly, cities are acting to confront historic burdens that make development and provision of public goods more challenging on urban land.