|
Article Excerpt
NOTE CONTENTS
INTRODUCTION I. THE HOUSE BEAUTIFUL: ASPIRATIONS FOR BEAVER HILLS II. OBSTACLES TO THE REALIZATION OF THE BEAVER HILLS SCHEME A. Extrinsic Legal Obstacles B. Self-Created Obstacles: The Company's Failures III. THE UNLIKELY SUCCESS OF BEAVER HILLS IV. MAKING SENSE OF BEAVER HILLS A. Covenants as Signals and Social Norms B. Covenants and Zoning: The Surprising History of Upper Ellsworth and Colony Road CONCLUSION
INTRODUCTION
An ornamental pier, stenciled with a fanciful rendering of a beaver gnawing a tree, stands on a street corner about a mile and a half northwest of downtown New Haven, Connecticut. In 1986, a purchaser of 389 Norton Street, the house located on that corner, received a deed stating that the Beaver Hills Company retained "the right [to enter the owner's property] ... to maintain the ornamental pier." (1) The Beaver Hills Company ("the Company") has not existed since 1938, (2) and the pier in question has not been subject to professional maintenance for some time. The deed restriction is irrelevant to the current owners of 389 Norton Street. But its existence and accidental survival are quite relevant to questions that still bedevil land use policymakers today.
New Haven's Beaver Hills neighborhood sits at a fascinating crossroads in the history of residential urban development. The neighborhood was born out of farmland in 1908, (3) in what was then the rural fringe of the city. New Haven's Civic Improvement Commission had just entered its second year of existence, and Cass Gilbert and Frederick Law Olmsted, Jr., were applying the principles of the City Beautiful movement to a comprehensive plan for revamping New Haven's built environment. (4) Intellectual trends at the time strongly favored increased coordination and control in urban development. But the Gilbert-Olmsted proposal for a more systematically planned city was never realized, and New Haven's first initiative toward concerted city planning, which spanned the first decade and a half of the twentieth century, has widely been deemed a failure. (5) Indeed, a serious and effective increase in public urban planning would not occur in New Haven until decades later. (6)
Beaver Hills, though, tells a slightly different story about the fate of land use planning principles in the first few decades of the twentieth century. A residential area located northwest of downtown New Haven, Beaver Hills was the creation of a corporation called the Beaver Hills Company. (7) In subdividing and developing the area between 1908 and 1938, the Company sought to achieve through private modes of regulation a kind of coordination and control analogous to that attempted through public means in the same period. According to scholarship on the history of New Haven, before the promulgation of New Haven's first zoning ordinance in 1926, "market forces and social custom" resulted in land use coordination at least as successful as that which would later be achieved by governmental regulation. (8) Although this scholarship has largely neglected the role of restrictive covenants in land use coordination prior to World War II, (9) restrictive covenants, including the deed restriction regarding the ornamental pier, were the most important tool that the Company used.
Restrictive covenants have played a crucial role in the history of twentieth-century American suburban residential development. The literature covering that history is rich and diverse, (10) and the role played by the legal device of the restrictive covenant has not gone unnoticed. (11) Nonetheless, there has been little detailed discussion of the content, the legal context, and the potentially problematic nature of covenant schemes in the early decades of the twentieth century. (12)
This Note aims to provide such a detailed discussion and, in so doing, to contribute to the legal and policy debates over the interaction between public and private methods of land use coordination. Beaver Hills is a uniquely revealing object of analysis for this purpose. The development of the neighborhood began amid a dramatic upswing in public debate about the desirability of land use regulation. Zoning, arguably the most influential twentieth-century innovation in public land use regulation, entered New Haven in the 1920s, (13) while the neighborhood's development was still in full swing. Meanwhile, the primary tool of land use regulation in Beaver Hills, the restrictive covenant, is virtually always mentioned in discussions of viable private alternatives to zoning and public regulation. (14) Such studies often posit zoning and restrictive covenants as alternative and more or less interchangeable means of producing generally similar results. (15) Restrictive covenants have even been referred to as "a form of 'private zoning."' (16) But concerted empirical study of the actual interaction between restrictive covenants and zoning ordinances has not been forthcoming. This Note provides such an empirical study and concludes that covenants and zoning should not be treated as interchangeable.
Part I provides a brief history of the Beaver Hills neighborhood and describes both the Company's goals for the neighborhood and the strategies it used to achieve them. Part II describes the many obstacles, both external and self-created, to effectuating the Company's goals through its chosen strategies. Part III, however, demonstrates that these goals in fact were achieved despite an inhospitable legal context and several seemingly illogical strategic choices. Part IV answers the vexing question of why this surprising outcome occurred, arguing that restrictive covenants were meant to serve more as embodiments of social norms and as signals than as literal, binding legal restrictions. Finally, the Conclusion synthesizes the lessons of Beaver Hills into general observations about how covenant schemes should be evaluated today.
I. THE HOUSE BEAUTIFUL: ASPIRATIONS FOR BEAVER HILLS
In 1906, a New Haven native named George Mead died and left his substantial landholdings to his grown children. (17) The strategic value of land like Mead's in a growing city would have been readily apparent. By 1908, the Mead heirs, led by the eldest son, D. Irving Mead, had incorporated the Beaver Hills Company (18) and filed a map of their father's lands--now subdivided into lots for residential development--with the New Haven Town Clerk's Office. (19) The first lot was sold by October of that same year. (20)
As late as 1901, the area that would become Beaver Hills was still farmland, and it was so undeveloped that the Sanborn Insurance Company did not bother to include it on the insurance map of the city that it produced that year. (21) But a 1911 city atlas shows that the basic street plan proposed by the Company in its 1908 subdivision map had been executed in those three years. (22) By 1911, seventeen houses had already been built within the area of the original subdivision. (23)
In 1924, sixteen years after the Company began selling lots, eighty-one structures had been built in the neighborhood. (24) In the second half of the 1920s, the Company moved its sales and development operations to the west, opening two new north-south streets, Colony Road and Bellevue Road, to the west of Ellsworth Avenue. (25) Sales in this area, and in the area north of Glen Road, then constituted the bulk of the Company's activity until it was dismantled in 1938. (26)
The Company's activities and business model made it what Marc Weiss has called a "community builder," distinguished from a run-of-the-mill subdivision developer by its "longer time-frame for development, larger scale of activity, [and] greater degree and quality of design." (27) While the behavior of ordinary subdividers tended to earn them derogatory nicknames like "curbstoners" and "fly-by-nights," community builders "were much more likely to assume the broader and more generalized land-use perspective advocated by planners." (28) Like those who advocated city planning, community builders sought to use various methods of regulation to implement particular plans for the areas under their control.
The Company articulated its vision for the neighborhood in its sales brochure. The brochure appealed to readers whose experience of urban nuisance and disorder had instilled in them a desire for control and order. The Company promised to take the uncertainty out of home ownership, with such features as a "general plan" of development, a "uniform building line," and prohibitions on "eccentricities and undesirable cheapness of design." (29) The Company also sought to assure prospective buyers that it was cut from community builder, and not curbstoner, cloth: "It is believed the reader will appreciate that this plan is not a scheme of the land promoter. This property is being developed by the same interests which have held it the past fifty years." (30) The brochure linked the Company's mission--creating "not merely a successful real estate development but a charming community"--to its designation of a Craftsman bungalow that it had recently erected at the corner of Norton and Goffe Streets as "a place of meeting and a means of promoting the neighborhood spirit." (31)
Restrictive covenants were a primary instrument for realizing the vision of Beaver Hills from the very beginning. For example, in the summer of 1909, when the Company sold a house lot to Frederick G. Murray, the deed contained the following language:
Said premises are conveyed subject to the following covenants and restrictions which shall run with the land until January 1st, 1935, viz: Said Grantee, as part of the consideration of this deed, covenants with said Grantor, that no fence nor any part of a building (except steps, piazzas and bay windows) shall be erected within thirty feet of the street line in front of said premises or 15 feet of the street at the side of said premises, and that said premises shall be used for no other than residential purposes, except that a private stable or garage may be erected on said lot appurtenant to a dwelling provided that said stable or garage is not erected within one hundred feet of the street in front of said premises, or thirty feet of the street at the side of said premises. (32)
Restrictions similar or identical to those in the "Murray Deed" would be inserted into virtually every subsequent deed of sale for lots originally owned by the Company. In addition, the Company imposed restrictions on the construction and design of houses in the neighborhood. (33) These restrictions were not contained in the deeds to the lots, and they required lot buyers to construct a house within a certain period of time after purchase and to obtain the Company's approval of the design. (34)
The strategy chosen by the Company to regulate land use in the neighborhood is by no means unfamiliar to the modern reader. It has been estimated that nearly 15% of American housing units are part of a development regulated by covenants. (35) Nowadays the legitimacy and effectiveness of this practice are rarely questioned. In fact, it has been suggested that "[s]ystems of covenants are an ideal system of land use regulation in major developments undertaken by single owners." (36) The use of restrictive covenants was, of course, not unheard of in the Company's day either: "Regulating the use of land through private restrictive covenants is an old idea." (37) However, the practice of deploying covenants that run with the land to achieve value-creating coordination of land use within a defined neighborhood did not truly become common in the United States until the turn of the twentieth century. (38)
Current scholarship tends to take for granted two assumptions about such systems of covenants. The first is that they are effective legal commitments-essentially a form of "private law," analogous in their effects to public land use regulations such as zoning ordinances. (39) The second commonplace assumption is that systems of covenants, if deployed correctly, will increase the value of the land they affect. (40) The benefits that accrue to purchasers of restricted lots are conceptually very simple: the purchaser is buying the assurance that the restrictions placed on the use of her land will also apply to and be enforced against the land of her neighbors. The validity of this second assumption, of course, depends on that of the first.
Neither assumption was entirely valid when Beaver Hills was founded. In the early twentieth century, a host of unfavorable legal doctrines, along with a lack of sophistication on the part of those who drafted and signed covenants, meant that the enforceability of covenants could not be assured. (41) This, in turn, weakened the lot purchaser's valuable assurance that the benefits she granted her neighbors would also be available to her. A rather vicious cycle existed at the turn of the twentieth century, wherein many courts and market participants believed that restrictive covenants lowered the value of land and so were reluctant to enforce them. (42) Of course, covenants are in fact very likely to be a drag on property values, as covenants are, on their face, a burden on the land they restrict, analogous to an easement. To avoid depressing the value of the land they affect, as easements do, restrictive covenants must provide some benefits as well--typically, a promise that one's neighbors will abide by similar restrictions, which is only the case if the restrictions are mutually enforceable. This means that courts did not need to refuse to enforce covenants in order to ensure that they would not lower the value of land; making all covenants mutually enforceable could actually have accomplished the same result. Such reasoning would have been no comfort to the developers and early residents of Beaver Hills, who probably expected to face courts that were fairly uniformly hostile to covenants. In light of this situation, then, it is more than a bit surprising that Beaver Hills both made extensive use of covenants and used them quite successfully.
II. OBSTACLES TO THE REALIZATION OF THE BEAVER HILLS SCHEME
This Part describes in more detail the obstacles to the realization of the Beaver Hills scheme. Some of these obstacles, as indicated above, were extrinsic-created by hostile courts and other unfavorable legal doctrines. Others, however, were intrinsic--created by decisions made by the Company that weakened the legal force of its covenant scheme.
A. Extrinsic Legal Obstacles
American courts in the earliest decades of the twentieth century were generally hostile to restrictive covenants. According to some, this hostility was based on nothing more than the "empty mantra[s]" of traditional prejudice, (43) but legitimate policy concerns appear to have supported it as well. Restrictive covenants were seen both as a potential drag on the value of property to which they attached (44) and as an affront to the principles of free use and free alienability of private property. (45) This policy-based skepticism of covenants informed the interpretive rule of strict construction, by which covenants were generally given the narrowest reading that their language would support. (46)
In addition to hostile courts, venerable doctrinal requirements-such as the requirement of horizontal privity between covenanting parties, (47) the prohibition on the creation through covenants of benefits in gross, (48) and the distinction between real covenants and equitable servitudes (49)--also reduced the ability of the Company and its clients to rely on their covenants. Most of these requirements have since fallen out of favor and have virtually no influence on the current law of covenants. But in the first half of the twentieth century these doctrines had two broader effects that would have been relevant to the buyers and sellers of Beaver Hills lots. First, they made courts reluctant to enforce affirmative covenants--that is, covenants requiring property owners to take, rather than refrain from, a certain action. (50) By 1908, when the Company drafted its first restrictive covenants, American courts had in some cases enforced affirmative covenants running with the land, (51) and in subsequent decades prominent commentators would grumble about the irrationality of most courts' residual reluctance to do so. (52) Nonetheless, the frequency with which this reluctance is mentioned in contemporary sources suggests that it was a genuine concern for drafters of affirmative covenants, such as those requiring a purchaser to erect a building on his land within a specified period of time. (53) As discussed below, this rather abstract distinction had important practical implications for the design of the Beaver Hills scheme. (54)
Second, these older doctrines restricted the ability of certain...
|
