Shaky Ground

Why Flexible Rules and Reasonable Regulators Are a Builder's Worst Nightmare.

Gene Callahan from the January 2001 issue

(Page 2 of 3)

Finally, after three hours of listening to other people's cases, our turn had come. "Callahan?" the clerk said. We indicated that we were present. The clerk opened the folder for our case. "Oh, the Town of Yorkshire hasn't responded to our letter of advisement," he said. "You'll have to come back for the next meeting." In two weeks.

Another notable person on the commission was the fellow whom we came to call Yes Man. He was the lonely representative of the idea that perhaps the town should have the burden of proving that there is ecological harm, rather than forcing the applicant to show that there isn't. At a certain point he would get bored with drumlins and soil microorganisms and blurt out, "I forward the motion that we approve this application." Occasionally his boredom would carry the day, as other commission members would begin to feel the same ennui and just want things ended with the conclusion that was probable anyway.

After three meetings with the conservation commission, Yes Man forwarded his motion, and we gained our approval. But we were not done with them yet. We made a change to our building plans that did not affect the footprint, and filed the changed plans with the building inspector. Since our impact on the wetlands hadn't changed, the architect felt that we weren't required to go back to the conservation commission. Apparently, he was wrong. Our builder was confronted by the town conservation officer, who threatened to shut the job down because of the change in plans. My architect called me and told me to bring my attorney to the next meeting. The sight of an attorney seemed to change the commission's mood. The board members were immediately conciliatory and merely admonished us by saying that they would "appreciate being told about these things."

In his popular 1996 book The Death of Common Sense: How Law Is Suffocating America, Philip Howard contends that the chief legal problem in America today is not that there are too many laws but that the law is not being applied "reasonably." Bureaucrats, he argues, are not given sufficient discretion when making their decisions. The result is that our obsession with "a government of laws, not men," is destroying government's ability to act rationally. "Relaxing a little and letting regulators use their judgment is the only way to liberate our judgment," Howard writes. He moves so far from the principle of the rule of law as to recommend regulating each of America's 4,000 most polluting factories individually.

Well, here we were in a situation where the bureaucrats had plenty of discretion and were very reasonable, yet we were worse off than if what we wanted to do were simply forbidden. In that case we just wouldn't have purchased the property. Instead, we had months of uncertainty after the purchase. We wound up spending dozens of hours of our time and thousands of dollars in fees for our architect's and our lawyer's hours. It was necessary to talk very politely and sound very eco-friendly to the conservation commission, especially when dealing with Fred. He could turn stubborn on a project and request information not possibly available at the meeting, sending the hapless applicant out to spend more cash and time determining the ratio of green-backed to yellow-backed slugs on his land.

At one meeting my wife felt compelled to hide the cover of a conservative magazine she was reading, for fear of offending some liberal on the board. Board members would pop over to our property at odd times of the day and walk the land. These intrusions into our private lives were made possible by the discretion these boards enjoy. What you want to do is forbidden by default, but if you're nice and don't put up a fuss about their choosing your landscaping plants or crashing your croquet party, they'll let your project go forward. As F.A. Hayek remarked in The Constitution of Liberty: "It used to be the boast of free men that, so long as they kept within the bounds of known law, there was no need to ask anybody's permission or to obey anybody's orders. It is doubtful whether any of us can make that claim today."

Our case, while daunting to us, was actually resolved comparatively easily. When I described its history to John Charles, environmental policy director at the Cascade Policy Institute, an Oregon-based policy research center, he expressed genuine surprise that we had been able to move forward so quickly. In contrast, Reason Contributing Editor James DeLong describes in his 1997 book Property Matters the case of a Pacific Grove, California, property owner who spent over $600,000 and three and a half years to get permission to build a residence on a 1.1-acre lot.

It is precisely the discretionary power of local land use authorities and the "reasonableness" of their procedures that lead to cases that drag on for months or years. Since there is no simple rule deciding whether a particular project can go forward, regulators must invest large amounts of time to show that they have considered all factors and have not been unfair or negligent in their final decision. In fact, the system gives them strong incentives never to make any decision at all-if they can merely delay decision until the project fades away, no one can blame them for deciding improperly.

In describing the difficulties of Andrew Varlow, who wished to expand on his Marin County, California, property, DeLong comments: "The planners fret about the size of the house, the effect on views, future development in the area, the possible impact on real estate prices, and the project's 'inconsistency with the goals' of the planning group (whatever these may be; the meeting minutes do not say). No standards are announced. Varlow and his people have spent over two years on the project without any firm guidance that 'you can do this but not that.'"

Philip Howard would contend that the regulators should be held responsible for being dilatory, but this merely inserts another layer of administration making another round of discretionary decisions. After all, weren't the Marin regulators just using their legal discretionary power to withhold a decision until they felt certain that Varlow's project was "consistent with their goals"? By what guideline could the regulators be judged to have taken "too long"? And who will judge the regulators who judge the regulators?

During the third of our conservation commission hearings, our architect pointed out to the board members that we had a child on the way. They all nodded in understanding, and our approval came soon thereafter. Should this have been relevant to their decision? If we were childless pensioners, would we have had less right to expand? Hampshire is a Republican stronghold-might the decision have been different if we had been prominent Democrats? What would our odds have been if we had been a gay couple hoping to build in a fundamentalist Christian community? Blacks in an otherwise all-white town in the Deep South?

I have no idea if the applicant who yelled at the commission had any factual basis for his accusations of corruption. But a system in which a bureaucracy has discretionary powers over individual citizens will always lead to suspicions of this sort. Each case must be decided on its own, unique merits, so it becomes an entirely subjective judgment as to whether different parties received "equal" treatment.

The man who wanted the four-lot subdivision had much more trouble with conservation than we did. Because his motive was simply "profit," his standing with the commission was lower than that of a young and growing family needing living space. A commission tasked with protecting wetlands wound up assessing the moral worth of various applicants' projects.

Howard is wrong, and the defenders of the rule of law are right. Hayek, one of the greatest 20th-century advocates of the rule of law, saw that it is the keystone to liberty. People living under the rule of law have clear-cut guidance as to whether they are permitted to undertake some activity. This clarity leaves us free to plan our own actions, because we understand, vis-à-vis the legal system, what the consequences of those actions will be. All of us understand that if we kill someone and are caught, we will go to prison. Occasionally there will be gray areas in the law, such as determining when a killing might be in self-defense. But our town had set up a situation where the majority of contemplated development was in gray areas. In our case, it was never clear to us exactly what would decide the fate of our petition. As Hayek put it, "Nobody disputes the fact that, in order to make efficient use of the means at its disposal, the government must exercise a great deal of discretion. But...under the rule of law the private citizen and his property are not an object for administration by government, not a means to be used for its purposes. It is only when administration interferes with the private sphere of the citizen that the problem of discretion becomes relevant to us; and the principle of the rule of law, in effect, means that the administrative authorities should have no such discretionary powers in this respect."

In Simple Rules for a Complex World (1995), Richard Epstein argues that we should generally favor rules that offer a clear delineation of what is and isn't permissible over more complex rules that require discretion on the part of those enforcing them. He illustrates the principle with the example of lawsuits that involve harm caused jointly. For instance, your car struck mine after you failed to obey a stop sign one night. I, however, was driving without my headlights on, making it difficult for you to see me. Law that requires an "accurate" determination of how much each of our errors contributed to the accident necessitates great discretion on the part of those deciding the case-and leads to interminable trials with large legal expenses on both sides.