Yesterday’s New York Times reported on “a growing movement, from suburban Washington to Los Angeles, to protect mature urban trees — and in some communities, make it a crime to chop them down.” Washington Redskins owner Daniel Snyder, for example, was recently fined $37,000 for removing 130 view-obstructing trees on his riverfront estate, and the Montgomery County City Council, upset over Snyder’s action, has now amended a local ordinance to make Snyder’s crime punishable by up to six months in jail.
While Snyder’s misconduct was clear-cutting, a number of localities are criminalizing the removal of single trees. In San Francisco, for example, the Board of Supervisors will have authority to designate certain trees as landmarks, and the owners of those trees will not be permitted to remove them. Under a proposed Los Angeles ordinance, trees that are of designated species (native oak, black walnut, California sycamore, or bay laurel) and reach a certain size (4 inches in diameter) will automatically be protected.
What about compensation for the landowner who finds her property value diminished because city residents want to look at her tree? There’s not any, of course. Why would a city pay for what it can steal?
Putting aside the obvious injustice here (i.e., individual landowners are being forced to bear all the costs of a public good), this seems like a stupid way to protect trees. Imagine the fate of the poor native oak in Los Angeles that manages to reach 3.75 inches in diameter. If its owner thinks there’s any chance the property on which the tree is located might be developable sometime in the future, that tree’s days are numbered. In San Francisco, rational property owners are undoubtedly scouring their land for handsome trees that city planners might soon try to appropriate. Better get ’em down before the Board of Supervisors comes a-knockin’!
This is not a new problem, of course. The so-called “shoot, shovel, and shut-up” syndrome has long plagued the Endangered Species Act, which precludes development of private property that may be habitat of a listed species. Here, though, the perverse incentives seem even stronger. It’s fairly difficult for landowners to make preemptive efforts to rid themselves of endangered species. (Landowners usually won’t know the critters are a problem until they are listed, and at that point, destroying an individual creature or its habitat can lead to punishment.) With mature trees, by contrast, landowners can protect their property rights, without breaking the law, simply by ensuring that their trees never get big enough to merit protection.
I’m all for big trees. So are lots of other folks. As the Times reported, “[a] study by the University of Washington even found that people shopped longer and more often in tree-lined retail areas and spent about 12 percent more money.” Findings like that suggest that private markets will produce big trees.
But what about those gorgeous old trees that have the misfortune of being owned by someone who doesn’t appreciate their magnificence? Shouldn’t citizens be able to stop the owner from chopping them down? Maybe. But if the public demands the tree, the public should pay for it by compensating the landowner for the loss in property value occasioned by the land use restriction. This is only fair. It’s also the only way to ensure that landowners allow the trees on their property to become magnificent.
Mike S points out the big problem with assigning the property right as not to cut down trees. It discourages people from planting trees in the first place.
Let us say that I am considering planting a tree that will grow into a big one, and property rights of big trees are clearly assigned to the neighbours. Rather than brace myself for a possible fight with intransigent neighbours in 20 years time if I decide I want to cut down the tree (perhaps I may need to have my in-laws living with me and will have to build an extension), I may decide not to grow the tree at all.
And, even if I intend to move before the tree is well-grown, I should consider that a future buyer may also be reluctant to give up the option value.
It’s not just existing trees that we need to worry about, but future ones. Especially since most existing trees will eventually die of old age.
This reminds me of when I ordered DirecTV because, as a rabid NFL football fan, I simply had to have the Sunday Ticket, which provides televised access to most NFL games. The installer came out to install my satellite dish and informed me that a large tree in the middle of my yard was blocking my view of the southwestern sky and, by extension, the satellite that would beam me by precious football games. Some $1,200 later, the problem was solved and I had a clear view of the southwestern sky. No doubt my neighbors were mortified, but I’d rather watch NFL football than look at a tree.
I imagine in addition to property owners cutting down trees that are just below the threshhold, there will be less owners planting new native trees. As a homeowner who likes large trees I would still consider planting a ‘non-native’ oak or a white walnut tree over their native equivilants. Then I wouldn’t need to worry about what problems arise in the future.
Snyder bought the property with his eyes wide open. Saying he that they were blocking his view is disingenious. He didn’t have a view; he was trying to create one. Very self centered I-Me-My. So he ignored the law and had them cut down, thinking he could probably get away with it because he was “rich” and “important.” Classic case of what’s know as “elite deviance.”
Fine the bastard and make him REPLACE the trees with ones of aproximately equal size, a penalty similar to that in San Marino CA, where some recent arrivals were cutting down trees because they had “bad spirits inside them.
I believe it was once said “Don’t buy a property for the view unless you can also buy the view”. As a property owner I should be free to do with my property what I want. You have no right to impose a burden on me to preserve your view. If you want to insure your view, buy more property. A lot more.
As Ted points out, my initial point was simply that laws such as the recent San Francisco ordinance and the proposed Los Angeles ordinance wil create perverse incentives to prevent trees from achieving protected status. For that reason, I would oppose such laws and (since I really like big trees) would instead prefer some sort of scheme where the municipality pays landowners for maintaining their magnificent trees.
I wholly agree with Keith’s initial point that Coasean bargaining could, in theory (i.e., assuming low bargaining costs, etc.), solve this problem. But there’s a major caveat: Real bargaining must be possible under the legal regime at issue. This means (among other things) that the property rights must be clearly defined and freely transferable.
In the Snyder example, property rights were clearly defined in favor of Snyder’s neighbors (clear-cutting was illegal before Snyder did what he did). Presumably, though, the neighbors couldn’t transfer the right to Snyder. I suppose Keith is saying that the $37,000 fine was, in essence, a payment to the neighbors (acting through their agent, the municipality itself) for the “right” to clear cut. As Keith points out, though, the fine amount is somewhat arbitrary. It likely bears little resemblance to the neighbors’ actual valuation of the trees on Snyder’s property.
In any event, the Snyder example was not my primary target; I was more concerned with the perverse incentives created by ordinances that would landmark single trees. So how would a Coasean analysis apply there?
Well, the ordinances do not seem to enhance the likelihood of Coasean bargaining. Even without the ordinances, neighbors of the owner of a mature tree (or perhaps the municipality itself, representing all citizens in the area) could bargain with the owner for the “right” to the tree. All the ordinances do is alter the initial allocation of the right from landowner to neighbors.
Is there some reason to do that? I would think not. First, there’s no reason to believe ex ante that the neighbors value the right to the tree more than the property owner does. The property owner may have big plans for the site, and the value to him of those plans may exceed the value to the neighbors of the tree. This therefore is not a situation where the law can confidently enhance welfare by allocating a disputed right to the party likely to value it most. We simply do not know who that party is.
Second (and this was my primary point), if the law reallocates the right from property owner to neighbors at a certain point (as the SF and LA ordinances would do), it will create incentives for the landowner to prevent that point from ever occurring. Here, that means that the landowner will likely protect his development option by destroying potentially “landmarkable” trees before they reach landmark status. Thus, Coasean bargains over mature trees — bargains that already may occur under the legal status quo — will be precluded by these ordinances.
So what happens when the trees get tall enough to encroach on the power lines? Will the power company have the ability to cut the portions of the tree that are hazardous?
Better question. If my neighbor succesfully petitions to have my large tree “landmarked” as a no cutter, and I opposed it, whose responsibility is it when it eventually falls on my or his house? I believe that I can easily argue that I had attempted to preempt the damage but he wouldn’t let me.
Just a thought.
If the problem is that tree-owners aren’t realizing the positive externalities of trees and are too prone to cut down trees that serve a net social good, isn’t the solution tax credits for maintaining the tree? Creating an arbitrary rule that shifts rights at a certain maturity will discourage people from planting trees they might not be able to unplant and also result in too few trees.
“Imagine buying a house in a pretty residential neighborhood on a quiet, tree-lined street. On account of these attributesâ€”residential, quiet, treesâ€”you were willing to pay extra for the house and indeed would not have made the purchase if things had been otherwise. One fine day, your neighbor does something on his property to harm the value of yours, such as open a business, play loud music, tear down the house and replace it with a skyscraper, or (you guessed it) chop down all the trees. In all these cases, the economic problem is the same: there is an adverse effect on the value of nearby land.”
You know, I face precisely this issue now: my condo cost me perhaps an extra $20k because it had a view of the Washington Monument. That view will be partially blocked with the construction of a new highrise condo three blocks away, with an unknown effect on my resale value. (Furthermore, the two grass fields within a block’s walk have been replaced by a federal office building and two parking lots.) They’re also talking about a change in federal tax law that will decrease the value of my property by at least $100,000; furthermore, if Washington, DC is ever allowed to pursue a commuter tax, the relative financial advantage of living in Virginia declines to the serious detriment of my property values (adding additional injury to the insult of having to pay the commuter tax). Do I get to stop all this development or political change because of my purchase, or does my original purchase price reflect the market understanding of likely changes to the surrounding neighborhood and property values under existing zoning law, development likelihoods, and political pressures?
The whole point of Coase is that one establishes the legal rule in advance, and then no one can claim surprise when the trees get cut down later/one can’t cut down the trees or the quiet neighborhood becomes noisy/one isn’t permitted to hold loud parties. Buying into a neighborhood with a preexisting zoning law (or covenants running with the land) is a different scenario than buying into a neighborhood and having others, through new laws, expropriate part of the bundle of property rights you had originally purchased.
In any event, I think Thom’s point is that not only is the law in question intrusive, but it creates perverse incentives that contradict the intent of the legislation; it’s conceivably Pareto-negative in that it makes both landowners and tree-lovers worse off.
Sure, a 4-inch rule is somewhat arbitrary. But analytically, it’s no different from any other tree cutting ban. The intuition of four inches appears to be that smaller trees are less likely to produce external benefits for nearby landowners. So long as the rule is clear, no one will have any reason to make development decisions on the assumption that small, young trees that are less than four inches in size are there to stay.
Trees grow. Under the proposed law, it’s possible for a property where trees can legally be removed to turn into a property where they can’t, without the landowner doing anything. Land owners who want to have a lot of loud music on their land don’t generally find that their loud-music-allowed land has turned into a loud-music-prohibited land all by itself.
Of course, you can fiddle with semantics to claim that nothing has changed. (“The landowner couldn’t cut down 4 inch trees before, he still can’t now–it’s the exact same situation”) but as a practical matter, the landowner has suddenly found himself with restrictions that came from nowhere.
Ted is quite right to analogize here to landmark regulation. I would agree that neighbors shouldn’t have the right to get something suddenly declared a landmark and that if the municipality wants to do so it ought to compensate the owner. But if something has already been designated a landmark, then it seems to me that owners of nearby land ought to be able to rely on that.
Here’s another way to think about the problem. Imagine buying a house in a pretty residential neighborhood on a quiet, tree-lined street. On account of these attributesâ€”residential, quiet, treesâ€”you were willing to pay extra for the house and indeed would not have made the purchase if things had been otherwise. One fine day, your neighbor does something on his property to harm the value of yours, such as open a business, play loud music, tear down the house and replace it with a skyscraper, or (you guessed it) chop down all the trees. In all these cases, the economic problem is the same: there is an adverse effect on the value of nearby land. Zoning laws forbid the business and the skyscraper; nuisance law stops the music; and tree preservation regulations save the trees. In every case, it is the person who wishes to change the status quo who must pay for the privilege, not the other way around. Hard to see why trees should be any different.
Great post, Thom. Keith’s suggestion, while an improvement over an absolute bar, still has the same problem that Thom identifies: there will be a threshhold upon which a tree will grow from one that may be freely cut to one whose cutting rights transfer to the neighbors or the state. It creates an incentive to prevent trees from reaching that state in the first place.
I identified a similar problem on Point of Law last year relating to “heritage commissions” and architecture. We lost the Indeterminate Facade Best Products building in Houston precisely because the owner feared that he would lose the opportunity to knock down the building if he didn’t act quickly in secrecy, and didn’t dare negotiate on the market for its preservation.
Excellent post, Thom. No doubt it would be efficient in some cases for the trees to be cut down. But why make the owners of adjoining land pay to preserve the trees rather than make the owner pay for the right to cut them down? Assuming that maintaining the status quo will usually be the bargained for (and hence more efficient) outcome, then wouldn’t transaction costs be minimized by assigning the legal entitlement to the adjacent landowners? In other words, isn’t this just a case of Coasean bargaining where there’s no obvious reason to favor the landowner over his neighbors?
Snyder’s neighbors bought their property on the assumption that those trees would remain in place, given the illegality of removing them. In light of those settled expectations, wouldn’t it make more sense for Snyder to have to pay the neighbors to withdraw any objection to cutting the trees down, rather than for them to pay him not to do it?
That said, I agree that forcing Snyder to negotiate with his neighbors is more likely to lead to efficient outcomes than would having the municipality set an arbitrary fee or otherwise negotiate on the neighbors behalf. The neighbors know what external benefit they derive from the trees. The town has no idea.