Private Property and the Constitution

on Thursday, 24 June 2004. Posted in Issue 48 The Constitution: Private Property and the Common Good, 2004

Seamus Murphy, SJ

June 2004

In April 2004, the All-Party Oireachtas Committee on the Constitution published its Ninth Progress Report.(1) The Report discusses whether the provisions of the Irish Constitution concerning property rights obstruct social justice and the common good in the area of land and housing, with regard to purchase, planning and infrastructural development.

 

The opening lines of chapter 1 of the Report state its origin and purpose:

“In February 2000 the Taoiseach ...asked the committee to consider the present constitutional provisions in respect of property rights and specifically the necessity for up-dating those provisions which pertain to planning controls and infrastructural development.  In effect, therefore, the committee was asked to traverse much of the ground covered by the Report of the Committee on the Price of Building Land in 1973 (\'the Kenny Report\') and to examine afresh the question of whether the Constitution imposes unnecessary impediments to legislation which would either control or otherwise regulate the price of building land on the one hand or which would seek to eliminate many of the obstacles to the speedy roll-out of major infrastructural projects on the other hand.

In this context, the committee considers that its principal function is to examine the property rights provisions of the Constitution generally (albeit principally from the standpoint of the planning and development process) and to express a view on whether, as commonly perceived, they are weighted too heavily in favour of the individual.” (2)

This is what the Report does, in language that is clear, focused and incisive.(3)

Does it Matter?

What has that to do with everyday matters such as rents, schools, and community development?  The answer: a lot.  Crudely put, land-speculators and rackrent landlords have made huge profits at the expense of ordinary people, in part because it was believed that the Constitution sets the property rights of individuals above social justice. As a consequence, it was believed that the Supreme Court would overturn any law that would attempt to restrict profits in the interest of fairness and the common good.

The Report convincingly shows that belief to be false.  The property clauses in the Constitution and the Supreme Court\'s interpretation of them do not prevent capping the price of building land, limiting compensation or rent, reducing land-speculation or land-hoarding, and other reforms of the planning and rezoning process.

The practical implications for the lives of Irish people and communities could be far-reaching, even revolutionary.  It is important, then, that all concerned about social justice be aware of the Report\'s finding and their potentially huge significance.  They mean that there is no constitutional roadblock preventing the government implementing the reforms listed above to make Irish society fairer and less unequal.  No longer may political parties claim that the Supreme Court won\'t let them make such reforms.  Interested groups should push them to give substance to their initial welcome for the Report by pressing ahead with the introduction of legislation to give effect to its findings.

However, there are also interested groups strongly opposed to any change.  It is important to understand the issues.

The Constitution on Private Property

In the 1970s, a government-appointed committee recommended (in the famous \'Kenny Report\') that local authorities should be empowered to acquire land (for housing) for which the owner would receive its current (typically agricultural) use value plus a maximum of 25%.   However, the recommendations of the Kenny Report were not implemented, for reasons that are not entirely clear.

Yet, after reading the Report of the All-Party Committee, as well as the important submission made by the Law Reform Committee of the Law Society,(4) it seems strange that the idea gained currency that in Irish 
constitutional law and jurisprudence private property rights always trumped the common good.(5) 
Let us look first at what the Constitution says about property rights.

One article includes the right to property among personal rights.

Art. 40.3:  1. The State guarantees in its laws to respect and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.   2. The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.

The second focuses on the nature and extent of property rights and the limits that may be placed on their exercise.

Art. 43.1: 1. The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.                                                                                        2. The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.

Art. 43.2: 1. The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.                    
2.  The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.

From a theoretical viewpoint, interpreting these provisions may be difficult.  An optimistic view would see Art. 43.1 and Art. 43.2 balancing and complementing each other; a more sceptical view would see them as almost contradictory, giving with one hand and taking away with the other.  But on either view, one could not say that the Constitution gives such primacy to the right to private property and such unlimited scope to its exercise, that the common good and social justice count for nothing.  

The Courts on Private Property

Since the Constitution came into force in 1937, a body of decisions has accumulated and a pattern has emerged.  A number of developments are worth consideration.

First, as the Report of the All-Party Committee notes, "a significant majority of constitutional challenges in the area of property rights fail".(6)  Similarly, the submission by the Law Reform Committee of the Law Society suggests that the notoriety of the few successful cases merely illustrates the fact that cases taken normally fail.  It quotes an Irish constitutional law expert to the effect that, in light of decisions handed down, the Supreme Court\'s view is that:

“legislation will not constitute an unjust attack on property rights if passed to reconcile the exercise of those rights with the requirement of the common good, and if consonant with principles of social justice.”(7)

The Committee cites a long list of cases where the \'exigencies of the common good\' were taken as sufficient justification for various statutory restrictions on private property.(8)

The Committee notes that challenges to changes in the laws on licensing or permits affecting the value of individuals\' property are also typically unsuccessful.  A case in point is the taxi-drivers\' challenge to the de-regulation of the trade on the grounds that it led to taxi-plates losing their value. The case failed; the court pointed out that the taxi-plate\'s earlier value had been created solely by government legislation, so the taxi-drivers could not reasonably claim that their property rights had been unjustly violated when new government legislation removed that value.

Normally, restriction of an individual\'s exercise of property rights is to be compensated.  However, the courts do not require that compensation be necessarily paid in the case of refusal of planning permission or in the case of a zoning decision reducing a property value.(9)

Second, it is curious that the implications of the few successful challenges were so greatly exaggerated.  One can understand why some property-owners might have done so, but it is puzzling that public administrators and civil servants also subscribed to this view of the constitutional position.   This was particularly the case with respect to the Blake v the Attorney General (1981) case, where the Rents Restrictions Acts (1946-67) were struck down as violating landlords\' property rights.

This was widely interpreted at the time, and later, to imply that rent control per se had now been deemed inherently unconstitutional.  It was also taken to imply that any form of price control affecting land or housing would be deemed unconstitutional.(10)    This was one reason the Kenny Report was never acted on.

Yet a careful reading of the judgement shows that the Supreme Court did not deem rent control unconstitutional.  What it said was that the particular form of rent control found in the Rents Restrictions Acts - rent freeze, when coupled with indefinite security of tenure -  was unconstitutional, and that indefinite security of tenure, when coupled with rent freeze, was unconstitutional.  That left open the possibility that either on its own might be constitutional.  This would apply even more so in the case of rent controls not involving a rent freeze, such as limiting rent increases to no more than the annual inflation rate.(11)

Third, in the 1990s the idea of proportionality began to play a role in court decisions in this area.   This was significant.

Commenting on the language used in Art. 40.3.2 and Art. 43, the Constitution Review Group remarked several years ago that such terms as \'unjust attack\', \'principles of social justice\', and \'the exigencies of the common good\' were \'particularly open to subjective judicial appraisal\'. (12)  There is some truth to this criticism, but as the Review Group itself admitted, it would be hard not to allow some latitude to the judiciary in interpreting the Constitution.(13)
Besides, the degree of latitude is gradually whittled down as a body of decisions accumulates, setting precedent and guidelines for future decisions.  Greater precision has emerged through the use of the doctrine of proportionality, laid out by the President of the High Court in 1994, where he stated that a statute or other government regulation curbing some constitutional right could be defended only if the following conditions are met:

“The objective of the impugned provision must be of sufficient importance to warrant overriding a constitutionally protected right.  It must relate to concerns pressing and substantial in a free and democratic society.  The means chosen must pass a proportionality test.  They must:
(a) be rationally connected to the objective and not be arbitrary, unfair or based on irrational considerations,                                                                  (b) impair the right as little as possible, and                                                    (c) be such that their effects on rights are proportional to the objective.”(14)

The Report judges that doctrine to have influenced subsequent court decisions, in particular the case that both the All-Party Committee and the Law Reform Committee of the Law Society see as very significant, viz. Re Article 26 and the Planning and Development Bill, 1999. (15)

That case concerned a legislative proposal requiring developers seeking planning permission for residential housing to set aside up to 20% of the development for social and affordable housing.   Explicitly citing the criteria for proportionality, the court found that the bill was not unconstitutional.(16)

The Law Reform Committee of the Law Society draws attention to another passage in that judgement where the court stated:

“It can scarcely be disputed that it was within the competence of the Oireachtas to decide that the achievement of these objectives would be socially just and required by the common good.  It is accepted on behalf of the State that the use of planning legislation, which has traditionally been concerned with the orderly and beneficial planning and development of the physical environment, for a purely social objective of this nature is novel and even radical.  The court is satisfied, however, that it is an objective which it was entirely within the competence of the Oireachtas to decide to attain, as best it could, by the use of planning machinery.”(17)

It can no longer be held that the Supreme Court sets the rights of private property above the principles of social justice or the requirements of the common good.  The court is prepared to go quite a way with the legislature, provided only that 
(1) the government can make a reasoned and reasonable case for the law in question, 
(2) the restriction on private property is fair and not arbitrary, and (3) the social good to be achieved warrants or is proportionate to the restriction on the exercise of property rights.  
Thirty years after the Kenny Report was shelved, there is no longer any excuse for the 
government not implementing its main recommendation, viz. that agricultural land rezoned for residential purposes should be purchasable by a local authority for no more than its existing value plus a maximum of 25% of that sum.

At present, the exorbitant price of building land gives excessive profits to a few at the expense of the many, exacerbating socio-economic inequality and putting the cost of home-ownership beyond the reach of many.  One example will illustrate.  It was recently  reported in the Sunday Business Post (30 May 2004) that nine acres of land rezoned for residential purposes went in value from €135,000 to approximately €1.8 million (from €15,000 to €200,000 an acre).  The price of windfall of thirteen times the original value of the land accruing to the owners solely through the actions of the local authority will have to be borne by those who will be housed on that land.

When contrasted with what the Kenny Report recommended, the gross unfairness in our current system cries out for reform.

Catholic Social Thought on Property

Since private property is such an important and sensitive issue, the rest of this paper considers other approaches to the right to property.  

The balance between the public good and the rights of private property is a concern of Christian ethical thought, as represented in (for example) Catholic social thought.   Its principles on property include the following.(18)

General: property and the common good

1. The material goods of the world are ultimately for all people.      
2. Accordingly, every one has a right to a sufficient amount of the earth\'s goods. 
3. This implies a right to private property and a limit to its scope or exercise.  
4. The right to private property applies not merely to individuals, but also to families, co-operatives, companies, etc.
5. The right to property is part of the common good.  Hence there is no dichotomy between them.
6. The limitation of the exercise of the right to property, where necessary in the public interest or to give effect to the principles of social justice, is also part of the common good.

The right to private property

7. The right to property is a natural right, anterior to positive law.(19) It is a moral quality inherent in human beings.  Accordingly, the state ought recognise and vindicate it, and can neither create nor abolish it.(20)  Attempts to abolish it, removing economic freedom from individuals and other non-state bodies, lead to loss of religious, political, intellectual and other freedoms.
8. Property is good because it is an expression of personality, affording opportunities for social and economic service, providing incentives to work, and is a condition of civil liberties.(21)

The social mortgage on 
property

9. In Christian thought, since God made and \'owns\' the world, private property is a stewardship, and the human property-holder a trustee.  Property has duties as well as rights, and private property carries a social mortgage. (22)
10. The social mortgage is paid, not just in the currency of justice (giving what one owes others) but also in that of solidarity and charity (being generous with what one neither owes nor needs).  Surplus wealth should be given to those in  need and to charitable causes.(23)
11. Contemporary Christian thought sees work (rather than land as in ages past) as the primary source of wealth, and as the basis for the right to property.  Ownership of the means of production is legitimate if, and only if, it serves work.(24)  The property owner has a duty (of what could be called \'productive justice\') to use the material goods in his or her possession productively.  Thus, the social mortgage is also paid in productive justice.

The role of the public authority

12. The public authority has a duty to promote the common good, and hence the right to limit the exercise of property rights where necessary for that purpose. 
13. Such limitations may involve (a) preventing individuals from using their property in certain ways, and (b) taking property from owners who cannot or will not use the property productively.  
14. In imposing limitations, the state is bound by the principles of social justice (for example, no arbitrary seizure, no arbitrary selection of groups or individuals, clear public policy grounds for the limitation).  It must pay compensation. 
15. Nothing in the foregoing treatment of the right to property precludes the state from pursuing a radically egalitarian policy - for example, setting limits to the amount of property individuals may own.(25) Practical recognition of the right to property of some could require limiting the amount others hold.  The right to property is limited, not just by the common good, but by the nature of the right itself.

As is apparent, in Catholic social thought the right to private property is defended, limited and generally contextualised by the 
common good.

A Rights-based Alternative

Recent years have witnessed the emergence of a rights-based approach.(26) Its origin lies in the various UN and other international documents specifying rights accruing to people as human beings, or as women, children, labourers, migrants, disabled persons, prisoners,and others.(27)    Given that the conceptual framework of rights has acquired international currency since 1948, there is much to be said in its favour.

In the case of the right to property, a rights-based approach would, like the common good approach, provide a context or framework within which that right could be situated.  It would specify its relation to other rights, its place in a hierarchy of rights, and the limitations on its exercise in order to keep it in harmonious balance with the exercise of other rights.

A contextual understanding might also alter the internal understanding of the right.  Recognition of a right to housing and/or shelter might imply that, since those without proper housing are typically lacking property, it is mistaken to think of the right to private property solely as a right to hold property, because this fails to consider the element of being able to acquire property.  One might, for instance, argue that soaring house-prices under certain circumstances constitute a violation of the property rights of, for example, individuals and couples in reasonably well-paid employment yet unable to afford a mortgage.(28)

No doubt, there will be significant developments along this line of thought in the years to come.  Two points are worth noting with respect to that.  First, it may not always fit in with the approach based on the notion of the common good.  Rights are, after all, inherently a notion of something belonging to the individual and applying to groups (if at all) only by extension of that.   To limit the right to property by appeal to the common good and to limit it by appeal to other rights are different strategies (one giving priority to the community, the other giving priority to the individual) leading to theories that both overlap and diverge.

Second, it is sometimes said that the notion of the common good is vague, so it should be dropped, or replaced by the notion of rights.  Yet the notion of a human right is also vague.  While a civil or political right (i.e., the kind of right created and awarded by the state) is understood completely once one understands the law creating it, a human or natural right is something about human beings that the state or international bodies believe they have discerned and which they choose to recognise, but whose scope and limits may be vague and indeterminate.  
Conclusion

Ownership is a complex notion, involving a bundle of rights, rather than one simple right.  There isn\'t just one correct way of understanding that complex notion.  Within the limits set by avoiding the extremes of abolishing the right to property and making it supreme over the common good, a variety of reasonable approaches is possible.  As Ireland grows increasingly wealthy, it becomes more important to discuss and raise awareness concerning the role and purpose of property.


Notes

 

1.    The All-Party Oireachtas Committee on the Constitution (2004), Ninth Progress Report: Private Property, Dublin: Stationery Office, 2004.

2. Report, p. 17.

3. Some submissions proposed inserting socio-economic rights to shelter or housing into Constitution, and making them justiciable (i.e. enforceable by the courts).  However, the Committee decided that the issue of socio-economic rights was not directly relevant, yet important enough to be dealt with at a future time, as part of a treatment of all socio-economic rights.  See Report, p. 19.

4. See Appendix 3, A203-211.

5. In the sense of being exempt from social control, "ownership has never been absolute.  Even in the most individualistic ages, it has had a social aspect .. expressed in such incidents of ownership as the duty to prevent harmful use, liability to execution for debt, and liability to taxation or expropriation by the public authority." (Tony Honoré , "Ownership", in Making Law Bind: Essays, Legal and Philosophical,  Oxford: Oxford University Press, 1987, p. 190)

6. Report, p. 22.

7. James Casey, Constitutional Law in Ireland (3rd ed.), Dublin: Round Hall, Sweet and Maxwell, 2000, p. 677.

8.  Report, A205-206: nn. 21-22.  For reasons of space, I cannot list them here.  The detail offered by the Law Reform Committee of the Law Society provides impressive testimony on the matter.

9. Report, A206: nn. 26-27.  See also n. 28 for reference to similar judgments in the US courts, where the distinction between a \'taking\' and a \'regulation\' determines whether compensation is to be paid. 
10. See John Kelly, The Irish Constitution (2nd ed.) London: Butterworth, 1984, p. 659.  The Report also quotes the Legal Adviser to the Minister of the Environment in the mid-1980s as holding that the Kenny Report\'s proposal would probably be struck down as an unconstitutional attack on landowners\' property rights (p. 25, n. 20).

11. The Law Reform Committee of the Law Society puts it more strongly; see Report, A205, n. 19.

12.  Report of the Constitution Review Group, Dublin: Stationery Office, 1996, p. 358.

13. The Review Group\'s criticism is self-defeating.  It proposes revising the property articles, but holds on to such terms as \'principles of social justice\' and replaces \'common good\' with \'general interest\'.  Yet \'general interest\' is more vague and open to subjective interpretation than \'common good\'.  Either way, the courts will still have to adjudicate.  Second, the Group\'s notion of subjectivity is philosophically naïve.  All knowing is subjective, since there can be no knowing without a knower, no objective judgement without a subject to judge.  As far as possible, people should correct for bias and prejudice: no more can be expected.  Nor can subjectivity be opposed to objectivity.  As the philosopher Lonergan put it, objectivity is "the fruit of authentic subjectivity", where \'authentic\' refers to cognitive virtues such as attentiveness to data, openness to new ways of understanding it, and critical hard-headedness in one\'s judgements.

14.  Report, p. 28.

15. The Law Reform Committee of the Law Society comments: "The .. 1999 Bill represents perhaps the most intrusive interferences with the rights of property owners to be validated by the courts". (Report, A205, n. 17)

16.  Report, p. 31.

17.  Report, A207-208, n. 40.

18. For the Catholic view of property, see Rodger Charles (1982), The Social Teaching of Vatican II (San Francisco: Ignatius Press, pp. 299-312) for a succinct yet comprehensive outline.

19. Contrary to what is sometimes thought, most rights are not absolute.   Most theories recognise hierarchies of rights: some rights outweigh others.  Nor does a right\'s being natural or human, as opposed to civil or political, make it absolute.

20. In its submission to the All-Party Committee, An Taisce rejects the idea that property is a fundamental or human right, arguing (rather confusedly) that it is not "essential to the fulfilment of human potential [or] the maintenance of human dignity and integrity".  Thus it is merely "an \'entitlement\' that may be exercised only where it is in the public interest" (Report, A16).   Against that, the Christian tradition holds that the right to property is essential for those goods, and that its exercise need not be in the public interest, but merely not against it.

21. Taken from Rodger Charles (1982), The Social Teaching of Vatican II, p. 308.

22.  See John Paul II, Sollicitudo Rei Socialis (On Social Concern), Encyclical Letter, 30 December 1987, London: Catholic Truth Society: "Private property, in fact, is under a \'social mortgage\', which means that it has an intrinsically social function, based upon and justified precisely by the principle of the universal destination of goods." (n. 42)

23.  John Paul II identifies solidarity and charity as linked Christian virtues (Sollicitudo Rei Socialis, n. 40).  John D. Rockefeller said that once one got rich, one should give it away, and that it was a disgrace to die rich.

24.  See John Paul II, Centesimus Annus (On the Hundredth Anniversary of Rerum Novarum), Encyclical Letter, 1 May 1991, chapter IV, particularly n. 31 and n. 43 (London: Catholic Truth Society).  Traditionally, Christian thought has given greater moral weight to the right to use property than to the right to hold it.  This emphasis is given a new angle in John Paul II\'s associating the right of economic initiative with the right to private property.

25. It might be neither practical, prudent, nor conducive to socio-economic well-being, for the state to do anything of the kind.  But it would not as such constitute an unjustifiable attack on the right to property.

26.  See Report, A27-28, A34-38, where Jerome Connolly and CORI employ rights-based approaches.

27.  For a compendium of such documents, see Ian Brownlie and Guy S. Goodwin-Gill (eds.), Basic Documents on Human Rights (4th ed.), Oxford: Oxford University Press, 2000.

28. Outstanding here is Jeremy Waldron, The Right to Private Property, Oxford: Oxford University Press, 1988, showing that the right to private property need not at all entail growing inequality.

 

 

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