“Socializing” Land by Shielding it from Speculation

Pascale Thys, Nicolas BERNARD,, 2014

When it comes to reflecting on habitat, a central fact is too often overlooked: housing is grounded, anchored in land. Far from floating in the ether, housing is rooted to the ground and is solidly attached to it. In other terms, housing is located on a plot which actually represents approximately one quarter (or a third, in some areas) of the property’s total value. Therefore the issue of land cannot be viewed separately from the issue of housing, since building the latter requires control over the former.

More specifically, land is the ultimate finite (i.e. limited) resource. Land cannot expand, unless artificial islands are built¹ or colonies are established on the moon. This means that it must be used sparingly, even more so considering that the population increases over time, which in turn intensifies housing needs and the demands on available land required for housing.

Nonetheless, up until now land has not been set apart as a specific commodity. Owners’ wide-ranging power - if not absolute power² - over their property can be indistinctly wielded over movable property or real estate, or in the case at hand, over bricks or earth. No exceptions have been made for landownership.

However, at the same time an inspiring theory has developed. This theory argues that landownership has a “social function”. The absolutist approach to property rights was developed during the French Revolution as a response to the Ancien regime which, it is true, had established numerous land constraints that benefited the Church and sires. Today’s social demands make a compelling case for questioning this approach. The problem here is less the notion of private property than that of “depriving” property, a negative form of ownership in which the property is not effectively put to use - but nevertheless implies leaving other people without a home. It now seems necessary to limit and define owners’ discretional power. In this sense, why not choose to define property rights as a tool aimed at specific goals rather than as a strictly selfish prerogative? Put differently, maybe it is time to work on constructing a useful and accountable form of ownership, « which is only justified to the extent that it meets its purpose of public interest and loses its very foundation if it strays from it” ?

Today, Reasserting the Social Function of Land Ownership is Crucial

In legal language, property rights fall among three “rights in rem”: “fructus”, which is the right to own the fruit of a property; the right of user, “usus”; and « abusus”, the right to dispose of a possession - i.e. transform it, yield it or destroy it. Having rights in rem over land can include one or several of these rights. If, as Professor Nicolas Bernard³ argues, the issue at hand is that of protecting land, it must be protected from the concept of “abusus” which makes property rights almost absolute rights.

This “social function” could then be specified. Indeed, it posits the idea that land ownership cannot be absolute since it is limited by its “social function”. This principle has been enshrined in the Brazilian Constitution since 1988 (article 23) but other Constitutions previously referred to it, such as the 1917 Mexican Constitution. In this paper, we will present an overview of the history of this concept. Our aim is to shed light on the “limitations” that stand out and should be placed on land ownership, a scarce resource hoarded by an increasingly small number of owners worldwide.

Aristotle (-384 to -322) seems to have been the first to set forth the necessary “social function” of property⁴. According to him, human beings are impelled to gain ownership over specific commodities. This is necessary to ensure proper maintenance of the property. Thus private property is not condemned but each citizen-owner must commit to sharing the use of his possessions.

Saint Thomas (1255 – 1274) also developed this idea of the “social function” of property⁵. The Catholic church, from Pope Clement IV to Pope Pius IV, took clear measures against landowners who did not fulfil their social function obligations: anyone could farm their land and make use of a third of its area!

Auguste Comte (1798 – 1857) believed that society should consider property as a whole which of its own accord stretches beyond the individual aspects of ownership⁶. He is not opposed to individual possession or management of productive properties, but he thinks they must be at the service of a social mission. Thus, he states that property has “a crucial social function, which is to create and manage capitals so that each generation paves the way for the next ». Property entails duties and is not considered merely a right, meaning that land ownership is viewed as a responsibility and not just as a form of power.

Léon Duguit (1859 – 1928)⁷, an eminent law critic and an advocate of the social function of property rights, takes this idea a step further. According to Duguit, a bearer of land rights is inevitably endowed with a specific social function. Therefore, he claims: “I deny his property right; I declare his social duty ». “Nowadays, property is no longer an individual’s subjective right (…). Any owner of wealth is bound by the obligation to put it to use to multiply social wealth and social interdependency (…). Owners therefore have the social obligation to perform this task and will only be protected by society as long as it is done and to the extent thereof”. He clearly presents the repercussions in terms of social uprising to be faced by those who do not fulfil the « social function » of their land property.

Presently, land ownership seems to have been removed from society’s “control », though new mechanisms⁸ are tentatively being implemented. Raising the issue of the social function of land ownership involves the following questions: what are the roles and social responsibilities of “citizen-owners”? What should the public authority’s responsibility and resources be? What are the means available to land rights activists and networks to build up national and international pressure for the right to a “sustainable” and “affordable” habitat?

Making Property for Use and the Social Function Part of Positive Law

This principle is established at the highest level (such as in the highly symbolic “Property is binding. Its use must also contribute to the common good” stated by German Basic Law⁹) and is also defined concretely when applied to land ownership. The Constitution of Brazil¹⁰ only guarantees property rights if its “social function” is explicitly respected. In a mostly rural country, this social function is defined as the obligation to put land to “rational and appropriate use, compatible with natural resources and the environment, in compliance with labour law and in a way that contributes to owners’ and workers’ well-being” . Beyond the formal legal recognition of entitlement, a form of property based on use must be acknowledged and granted to those who actually farm land.

How can the law reflect this crucial claim? Can creative solutions be found for this problem? Yes, namely by reviving the Antique civil-law notion of breaking up property rights of rem. Two laws adopted in 1824, prior to the creation of Belgium - which was, at the time, ruled by the Dutch - created the possibility for the master of land to, in broad outline, confer rights not on the land itself but on anything built thereupon. The building lease and emphyteusis were thereby created¹¹, allowing their bearers to be temporarily¹² considered the full owners of constructions (which they sometimes built themselves) on a land which is not their property. This means they did not have to pay for land property. And these rights could be yielded, for a profit. At the end of the defined term, however, the buildings belonged to the landowner (officially called a “subsurface owner” or an “emphyteutic lessor”¹³, depending on the case), sometimes in exchange for compensation¹⁴.

In regard to this issue of Passerelle, these mechanisms are incredibly important: they are a way to protect land by making it unavailable for speculation¹⁵. The Community Land Trust is a legal figure which - and this is not a coincidence - is closely linked to the idea of a broken up right of rem. The private-law, non-profit Community detaches land from the commercial/trade realm and preserves it from the skyrocketing prices which are too frequent in real estate. By yielding only rights over buildings, this organisation not only makes them financially accessible to first-time occupants but essentially contributes to maintaining this benefit for the next occupants, since it remains a subsurface property system ad vitam. Indeed, the organisation pledges to never alienate the land, a vital commodity. There is more: if an inhabitant sells his/her broken up right (at market value), the trust systematically wields its pre-emptive right. It also receives a majority share of the value-added which it imputes to the new price (the price the right is sold for), thus significantly lower¹⁶. A full circle, so to speak¹⁷.

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