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Pragmatism and Principle: Intelligence Agencies and International Law

“The hell with international law,” Secretary of State Dean Acheson reportedly said during the Cuban Missile Crisis. “It’s just a series of precedents and decisions that have been made in the past.”[1] Although arising in a different context, Secretary Acheson’s observation also aptly summarizes the traditional attitude of states toward international law and intelligence gathering. Intelligence activities are a prime candidate for legal pragmatism—and especially its skepticism toward doctrine.[2] More than this, as Professor Ashley Deeks asserts in her recent article in this publication,[3] commentators have often contested international law’s precise remit in relation to at least some intelligence activities. Reviewing much of this same literature, I have argued that “the international community seems content with an artful ambiguity on the question.”[4] A more recent assessment points to international law’s “policy of silence” as the starting point in understanding the discipline’s relationship to intelligence gathering.[5]

This uncertainty should not, however, be overstated. It has arisen most often, and most credibly, in relation to true intelligence activity in the narrow sense of information collection. “Intelligence” is the “product resulting from the collection, processing, integration, evaluation, analysis, and interpretation of available information concerning foreign nations, hostile or potentially hostile forces or elements, or areas of actual or potential operations.”[6] International law is usually silent in relation to even the most notorious aspect of intelligence—peacetime spying or espionage, through the covert collection of information outside of an armed conflict. And indeed, in the absence of definitive, subject-matter specific law in the area, analysts have arrived at dramatically different conclusions about international law’s relationship with spying.

For instance, in his review, Professor A. John Radsan partitions the academic commentaries on the topic into three categories: those that regard espionage as illegal; those that see it as “not illegal”; and those that describe espionage as neither legal nor illegal.[7] A fourth approach abandons the debate of whether “intelligence gathering” or “espionage” is per se legal or illegal and instead subdivides the world of intelligence collection into constituent state acts. That is, it disregards a preoccupation with form (“intelligence collection”) and instead examines law governing specific conduct (for example, invasive surveillance, conduct of diplomats, interrogation, and so forth).[8]

But international law is much less agnostic in relation to the exercise by states of physical powers on the territories of other states, or in relation to human beings—conduct that when done secretively may fall within the scope of what is generally called “covert action.” Covert action designed to directly affect or influence people or the course of events often engages primordial rules of international law, particularly those of state sovereignty and the concomitant prohibition on intervention in the affairs of other states. International law has not singled out covert action and imposed redundant injunctions against activities that would already be unlawful if done overtly. But the absence of an extra-special admonishment against covert action does not amount to the same silence identified by commentators in discussing the lawfulness of spying. The surreptitious nature of a state’s conduct does not change its legal status, although it may change the politics surrounding it. There is, therefore, no principled basis to conclude that covert action per se falls into an area in which, to quote the famous S.S. Lotus case, states are permitted a “wide measure of discretion.”[9]

That is not to say that covert action lacks for justifications. One defense of covert action against legal formalism may rely on exceptionalism, urging the virtue of the cause prompting states to exercise covert powers.[10] In this respect, covert action may sometimes be assigned the same label as NATO’s 1999 Kosovo air campaign: illegal, but legitimate.[11] A second, possibly related justification may be simple realpolitik. States will not tarry over legal formalism when supreme security interests are at stake. However, both exceptionalism and realpolitik are unappealing justifications in a multipolar world in which many states may now be in a position to partake in potentially destabilizing covert actions. Moreover, their simple invocation risks abandoning legal formalism without superimposing workable policy guidelines to regulate covert action.

Confronted with this problem, Professor W. Michael Reisman and Judge James Baker have described the “myth system” of international law—that is, its doctrine—and juxtaposed it with the quite different state practice in the area of covert actions.[12] Reconciling the doctrinal myths of international law with this “operational code” means “that determinations of lawfulness in particular cases must . . . use a more comprehensive, consequentialist, and policy-sensitive approach.”[13]

In her article, Professor Deeks takes up this challenge by dividing international law applicable to intelligence activities into two “baskets”: a basket of rules that “is relatively detailed and focuses on protecting individuals”—such as international humanitarian and human rights law—and a basket of state-focused “rules such as respect for state sovereignty and territorial integrity, [that] regulates state-to-state activity.”[14]

She then advocates a hybridized, sliding-scale approach to international law and intelligence activity, urging more robust legal compliance in relation to individual-protecting rules and a policy closer to realpolitik in relation to state-centric rules.[15] Her motivation for doing so is largely pragmatic: If legal formalism wishes to “gain traction among states with robust intelligence capacities, it must allow states to adapt their international law interpretations to the special circumstances engendered by secret state activities, accepting that states require greater flexibility in interpreting some bodies of international law.”[16]

In this Essay, I offer a response to this model and review the rules of international law as they relate to intelligence activities. In Part I, I dissect the concept of “intelligence activities” and distinguish international law as applicable to spying from that relevant to covert actions. I urge that while international law is silent on spying per se, it is engaged by specific activities that rise to the level of intervention in a state’s sovereign affairs and that transgress the bar on the extraterritorial exercise of enforcement jurisdiction. There are, therefore, international norms that may readily be violated by at least some sorts of covert actions, above and beyond human rights principles that protect individuals. Ambiguity exists, but should not be overclaimed.

In Part II, I contemplate the virtues of tempering legal formalism in favor of a sliding scale in the area of international law and intelligence activities. While sympathetic to the necessity for pragmatism, I ask whether the sliding scale may result in the weakening of norms better served by being honored in the breach rather than abandoned in the name of realism.

I. International Law and “Intelligence Activity”

Noting the difficulty of definition, Professor Deeks describes intelligence activity as “both intelligence collection and covert activities undertaken by intelligence services, except for uses of force that would implicate Article 2(4) of the U.N. Charter, such as targeted killings overseas.”[17] This definition sweeps wide, and on its face includes everything that falls short of the threat or use of force against another state’s territorial integrity or political independence prohibited by Article 2(4), from open-source information collection to even covert assassinations. This is especially true if “covert action” is defined in accordance with U.S. law: “[A]n activity or activities of the United States Government to influence political, economic, or military conditions abroad, where it is intended that the role of the United States Government will not be apparent or acknowledged publicly.”[18]

A. A Typology of Intelligence

Most commentators focusing on international law and intelligence activities have defined their subject matter more narrowly than Professor Deeks, confining their topic to spying, “peacetime espionage,” or surreptitious intelligence collection.[19] Here, there is little doubt that international law contains no emphatic prohibitions. Where their discussions touch on covert actions, observers have often been much less equivocal about international law’s uncertainty.[20] Put another way, there is a regularly accepted legal dichotomy between spying and covert activity. On the spying side of that divide, international law is largely silent, promoting efforts to piece together rules from various collateral international law disciplines.[21] There may be instances, for example, where methods of intelligence collection trigger international human rights law,[22] although claims in this area should not be exaggerated.[23] On the covert action side, international law is much more certain, a matter I discuss in the next Section.

B. International Law and Covert Action

The frequent starting point for many discussions of international law and both espionage and covert action is the Lotus principle, a reference to the Permanent Court of International Justice’s 1927 judgment in Turkey v. France.[24] Commentators have pointed to this case in urging, “what is not prohibited is permitted in international law.”[25] And building on this doctrine, Commander Michael Adams has urged the existence of a security-preoccupied jus extra bellum—the “state’s right outside of war.”[26]

But permissiveness as the default position on the exercise of state power does not displace rules that do prohibit, or at least constrain, its exercise. This indeed was the position reached by the International Court of Justice (“ICJ”), confronted with the Lotus principle in the Nuclear Weapons Advisory Case.[27]

1. Sovereignty and Nonintervention

Some covert actions that have consequences on individuals obviously engage human rights principles (for example, detention, disappearances, and torture). Here, however, I focus on a less precise but equally obvious constraint on covert action: sovereignty. Sovereignty contains several ingredients, one of which is the principle of nonintervention—part of customary international law.[28] Professor Deeks correctly observes that the precise content of the broad principles such as sovereignty and nonintervention can be nebulous.[29] There are, however, at least some markers. For instance, in Nicaragua v. United States, the ICJ concluded that, at minimum, the principle of nonintervention

forbids all States or groups of States to intervene directly or indirectly in internal or external affairs of other States. A prohibited intervention must accordingly be one bearing on matters in which each State is permitted, by the principle of State sovereignty, to decide freely. One of these is the choice of a political, economic, social and cultural system, and the formulation of foreign policy.[30]

In the particular context of the Nicaragua matter, the ICJ concluded that prohibited interventions included “methods of coercion,” even when these fell short of use of force.[31] On a similar basis, some commentators have concluded that to constitute unlawful intervention, “the interference must be forcible or dictatorial, or otherwise coercive, in effect depriving the state intervened against of control over the matter in question. Interference pure and simple is not intervention.”[32]

Notably, coercion in this context likely means more than direct, physical compulsion. As one authority describes it, “[c]oercion in inter-State relations involves the government of one State compelling the government of another State to think or act in a certain way by applying various kinds of pressure, threats, intimidation or the use of force.”[33] These strictures would clearly implicate some forms of covert action. Thus, commentators have suggested coercive interference includes manipulation of “elections or of public opinion on the eve of elections, as when online news services are altered in favour of a particular party, false news is spread, or the online services of one party are shut off.”[34]

2. Enforcement Jurisdiction

Noninterference is not the only international rule engaged by covert actions. The Lotus decision itself acknowledges more general boundaries. Right after asserting its famous adage that “[r]estrictions upon the independence of States cannot . . . be presumed,” the court voiced an equally famous observation:

[T]he first and foremost restriction imposed by international law upon a State is that—failing the existence of a permissive rule to the contrary—it may not exercise its power in any form in the territory of another State. In this sense jurisdiction is certainly territorial; it cannot be exercised by a State outside its territory except by virtue of a permissive rule derived from international custom or from a convention.[35]

The exercise of state power is known as “enforcement jurisdiction,” and the prohibition on the imposition of nonconsensual enforcement jurisdiction extraterritorially, that is, on the territory of another state, remains a bedrock principle of international law: “[T]he legal regime applicable to extraterritorial enforcement is quite straightforward. Without the consent of the host State such conduct is absolutely unlawful because it violates that State’s right to respect for its territorial integrity.”[36]

Because enforcement jurisdiction rules do impose definite limitations on the powers states may exercise on the territory of other states, the legality of the covert action depends entirely on its nature. International law certainly precludes nonconsensual, extraterritorial conduct jure imperii—that is, involving the exercise of government functions.[37] And so, it reaches a state’s use of physical force on the territory of another state (such as an arrest and abduction).[38] A state agent entering a foreign territory in his or her official capacity without permission also transgresses this standard.[39] As Professor Simon Chesterman argues, the limitation on extraterritorial enforcement jurisdiction

would clearly prohibit unauthorized entry into territory; it would also extend to unauthorized use of territory, such as Italian claims that CIA agents abducted an Egyptian cleric in Milan in February 2003 to send him to Egypt for questioning regarding alleged terrorist activities. It would also cover the use of territorial airspace to transfer such persons as part of a programme of ‘extraordinary renditions.’[40]

The most famous exercise of covert extraterritorial enforcement jurisdiction was the Israeli abduction of Nazi war criminal Adolph Eichmann in 1960, when Mossad agents covertly snatched Eichmann from Argentina.[41] Argentina’s foreign minister protested, declaring the conduct “contrary to international norms,”[42] while Argentina’s ambassador to the United Nations called the kidnapping an infringement of Argentina’s sovereignty.[43] Argentina submitted a complaint to the UN Security Council, precipitating an unusual resolution from the Council.[44] That resolution declared that acts such as the kidnapping “affect the sovereignty of a Member State,” “cause international friction,” and may “endanger international peace and security.”[45] The Security Council further called on Israel to offer reparations.[46] Following negotiations, Argentina and Israel settled the matter, but also issued a joint communiqué acknowledging the role of Israeli nationals in the breach of Argentine sovereignty.[47]

Eichmann-style abduction constitutes an unequivocal exercise of state powers. Some commentators further assert that because of the limitations on enforcement jurisdiction, states are “also disentitled to carry out investigations in a foreign country, if it is their purpose to pursue and enforce its prerogative rights such as its criminal, administrative or fiscal jurisdiction.”[48] Examples include “gathering information in one State for enforcing revenue laws of another State.”[49] More generally, without consent, a state may not “send its police officers, even if they are in civilian clothes, into foreign States to investigate crimes or make enquiries affecting investigations in their own country. Nor can it allow spies or informers to operate abroad.”[50]

As already noted, there is considerable doubt as to the validity of the last statement concerning spying. There is also a view that noncoercive, peaceful investigations undertaken by one state on the territory of another involving the collection of (at least) information concerning the antitrust and tax activities of its expatriates comply with international law.[51] It stands to reason, however, that the international legality of that investigation becomes more doubtful where the territorial state’s laws are breached in the course of the investigation. As one commentator urges in discussing extraterritorial state action, “the local law should be used to determine whether the pertinent exercise of sovereignty can be viewed as a valid exercise of State authority.”[52]

C. International Law and the Cyber Headache

Until recently, there was an obvious territorial element to covert actions—and indeed, almost all intelligence activity —that eased the assessment of legality. For instance, an agent was either acting physically on the territory of a foreign state, or not.

The communications revolution, however, has changed the physical locus of at least some state action and has therefore created awkward questions for geocentric international law. Does the simple act of a state reaching out from a computer on its own territory to penetrate a server in the territory of another violate the server state’s sovereignty? Does this amount to the exercise of extraterritorial enforcement jurisdiction?

The answers to these questions are not obvious. Certainly, the consequence of the hack may color the assessment of its legality. Considerable analysis has focused on whether a cyber act visiting physical damage on the receiving state constitutes a use of force within the meaning of jus ad bellum rules.[53] More difficult are circumstances when the penetration falls short of physical destructiveness, but involves the more passive co-option of, for instance, foreign government communications networks to monitor communications or spread corrupted data.

Intrusiveness of this sort plausibly amounts to the exercise of state power on the territory of another state, raising sovereignty concerns. In 2007, a Canadian Federal Court judge concluded that intrusive surveillance (presumably involving electronic wiretaps) conducted by the Canadian Security Intelligence Service (“CSIS”) on the territory of another state without its consent would violate that state’s sovereignty.[54] A second judge then distinguished that holding where the intercept, while directed abroad, took place entirely from Canadian soil.[55] It was never entirely clear to this author from the limited public record in this case how an intrusive intercept of a foreign communication could be done within Canada without reaching out (electronically) and hacking communications overseas, in presumptive violation of some foreign law. More significantly, subsequent controversy stemmed from CSIS’s nonobservance of this Canadian territorial expectation. CSIS, in coordination with Canada’s signals-intelligence service, outsourced the intercept function to (unnamed) “Five Eyes” partner intelligence agencies, which include the U.S. National Security Agency.[56] Intrusive surveillance was not, therefore, confined to the territory of Canada and was instead conducted by foreign partners.[57] Moreover, this intrusive surveillance by Five Eyes members was not limited to those agencies’ own territories and involved intrusive surveillance in third-party states.[58] In effect, CSIS had outsourced conduct that the first judge had viewed as inconsistent with international law.

The question of whether invasive (but nondestructive) cyber penetration of this sort truly breaches international law was addressed, in part, in the Tallinn Manual on International Law Applicable to Cyber Warfare.[59] A private project involving international experts, the Manual constitutes the most comprehensive treatment of the topic to date; however, it does not resolve the doubt. In keeping with the discussion above, the Manual urges, “international law does not address espionage per se. Thus, a State’s responsibility for an act of cyber espionage conducted by an organ of the State in cyberspace is not [to] be engaged as a matter of international law unless particular aspects of the espionage violate specific international legal prohibitions.”[60] On the topic of cyber operations going beyond spying, the Manual notes:

A cyber operation by a State directed against cyber infrastructure located in another State may violate the latter’s sovereignty. It certainly does so if it causes damage. The International Group of Experts could achieve no consensus as to whether the placement of malware that causes no physical damage (as with malware used to monitor activities) constitutes a violation of sovereignty.[61]

Nevertheless, it concluded that “intrusion into another State’s systems does not violate the non-intervention principle . . . even where such intrusion requires the breaching of protective virtual barriers” such as firewalls or the cracking of passwords.[62] The litmus test is the concept of coercion, discussed above.

However, the Manual does not address the supplemental question of whether remote intrusion onto the territory of another state through cyber means constitutes an unlawful exercise of enforcement jurisdiction. At the very least, applying the doctrine discussed above, it seems likely that a cyber intrusion that requires the manipulation of cyber assets in a foreign state (through hacking or otherwise) does constitute an exercise of extraterritorial state power. This is not like remote sensing involving passive sensors located outside the territory of the state. Instead, this involves the transmission of electrical impulses in a manner that changes (and does not simply observe) the status quo in a foreign state. While it is true that the physical intrusion is minimal, I am not aware of any authority demonstrating that the legality of enforcement jurisdiction depends on the scale of the physical presence.[63] Indeed, to the extent that hacking violates local law, the intrusion is probably better described as an “encroachment of high intensity,”[64] an assertion consistent with the observation above on the role of territorial law in determining the legitimacy of the foreign state’s extraterritorial conduct. This is especially the case where, as here, international treaties oblige states to prohibit cyber hacking.[65] This is not, in other words, an idiosyncratic local law.

II. Sliding Scale, Legitimacy, and Legality

From the discussion above, the state of international law in relation to peacetime intelligence activities might best be described as follows:

Intelligence collection is not per se regulated by international law, although sufficiently intrusive collection can be tantamount to covert action.
Covert action is regulated by international law to the extent it amounts to coercive interference into the affairs of another state or the nonconsensual exercise of state powers on the territory of another state.
In both instances, the precise nature of the intelligence activity may trigger application of more specific international rules concerning, for instance, human rights or other specialized regimes implicated by the state conduct at issue.

Ambiguity occasionally exists in the precise application of these rules, but only on the margins. For instance, it is not entirely clear what state conduct constitutes the improper jure imperii. Does it include, for instance, simple investigations? Does it reach cyber intrusions? It seems safe to say, however, that the more kinetic or physical the state conduct and the more inconsistent with territorial state laws, the more likely it is to amount to a wrongful exercise of enforcement jurisdiction. And the more consequential the impact on the foreign state, the more likely it constitutes intervention violating that state’s sovereignty. While greater definitional precision would always be useful, these are workable standards on which any legal advisor adequately apprised of the facts should be able to give advice.

The take-home point is this: To the extent that commentators are inclined to treat intelligence activities as a unique area immunized from international law or subject to some special, more relaxed lex specialis, they exaggerate considerably. The residual question is, however, the one that animates Professor Deeks’s article: Namely, how should international lawyers respond to the reality that states do and will engage in intelligence activities, regardless of the niceties of international law? Building on the projects of other authors who have suggested their own criteria,[66] Professor Deeks’s solution is a “sliding scale” that retreats from legal formalism in an effort to graft principled policy constraints on intelligence activities.[67]

The resulting guidelines hinge on four variables: (1) risk of error and quantum of harm, (2) state or non-state target involved, (3) the specificity of the international rule applicable to the situation, and (4) covert action done in support of a goal for which other, overt activities are permissible (for example, election bribery undertaken to influence policies that could be influenced overtly through foreign assistance).[68] Applying these factors, Professor Deeks urges:

When engaged in intelligence activities that target actors not associated with governments, states should interpret strictly (in favor of the target) international rules that clearly address themselves to the type of harm the intelligence service is contemplating inflicting and that function to minimize the risk that a state will erroneously undertake a particular harmful activity against an individual. In contrast, when states undertake more traditional intelligence activities that primarily implicate the equities of other states, states should be permitted greater flexibility in interpreting relevant international law.[69]

The Deeks model has the significant virtue of incorporating international law into the intelligence activity calculus. It opens the door to a wide margin of appreciation for states where that law is ambiguous, but also where the consequences are less dire. It narrows that margin where the law is more precise, and especially where the conduct affects human rights. In this manner, it offers a way of prying open the door for law to an area of state conduct in which international law has figured modestly, if at all, in state decision making.

However, at its core, the sliding scale “anticipates and accepts gradations of interpretation of international law.”[70] A clear objection to the approach—as to any form of pragmatism—is that it does not operate to give international law primacy in any instance. Unquestionably, the subordination of international law is the way of the world: International law colors state discourse without governing the outcomes of state decisions, at least for matters of high politics. The residual question, however, is whether it should also be the way of the law. It is quite one thing to say that international law is sometimes ignored. It is another to say its content should vary according to a pragmatic calculus.

Professor Deeks’s bet is that an approximation of international law in intelligence activities, leavened by other considerations, is better than an indifference to it. This is a reasonable compromise of real utility to legal advisors fighting a rear-guard action against expediency. But to the extent these compromises are conflated as the rules themselves, this system risks moderating the (ideally, constraining) political risk that accompanies violations of international law. Legal formalism may not reflect the way things are done, but it is often the looking glass through which state conduct is evaluated. As Professor Nigel White argues, international legal rules may be weak compared to contingent preoccupations that drive state security behavior, “but given that the latter is just a short-hand term for power and self-interest, the formal laws remain as constraints, no matter how weak, on power.”[71]

Put another way, international law approximates a grammar of international relations. Like the grammar of any language, it does not dictate precisely what is said. But it does bind how that thing can be said. With grammar (at least in the English language), no central authority dictates its proper form. Instead, that form is decided organically through shared use. It is subject to change, sometimes even radical change, but it is almost always possible to say a particular usage is grammatical or not at any particular point. And those who use the language are then judged on their command of grammar, creating peer incentives toward conformity with generally-accepted usage.

The trouble with pragmatism as a tool for deciding the actual content of international law is that it loosens these “grammatical” constraints, unmooring international relations from any fixed (or at least slowly evolving) shared index of propriety. For its part, a formalist defense of international law in intelligence activities is not (just) a form of rule-bound inflexibility or naïve idealism. It also stems from a policy preoccupation: It is better to protect law, and accept that questions of expediency may deprioritize legality in the calculus conducted by states, than to “collapse[] any distinction between law and politics, between breach and compliance.”[72]

Professor Deeks’s guidelines are compelling policy, but in trying to bridge the gap between what Reisman and Baker call the “myth” and the actual “operational code” of international law, they are inspired by, but merely approximate, doctrine.[73] As such, they are simply a contingent choice. That makes them arbitrary: They are fully mutable as between states and governments. States would differ in the emphases they place on elements of the Deeks calculus—and on whether they accept those elements at all. And as for governments: They come and go, and some may be willing to place a heavier thumb on those variables, thus permitting a wider range of arbitrary state action. International lawyers should, however, always be able to speak clearly to the legality of this conduct, whatever the mood of any given administration.

[1]Wilhelm G. Grewe, The Role of International Law in Diplomatic Practice, 1 J. Hist. Int’l L. 22, 26 (1999).

[2]For a leading articulation of legal pragmatism and international law, see Michael J. Glennon, The Fog of Law: Pragmatism, Security, and International Law (2010).

[3]Ashley S. Deeks, Confronting and Adapting: Intelligence Agencies and International Law, 102 Va. L. Rev. 599, 600–01 (2016).

[4]Craig Forcese, Spies Without Borders: International Law and Intelligence Collection, 5 J. Nat’l Sec. L. & Pol’y 179, 204–05 (2011).

[5]Iñaki Navarrete, L’espionnage en Temps de Paix en Droit International Public, 53 Canadian Y.B. Int’l L. (forthcoming 2016) (manuscript at 17) (on file with the Virginia Law Review Association).

[6]U.S. Dep’t of Def., JP 1-02, Dictionary of Military and Associated Terms 114 (2010) (as amended through Feb. 15, 2016), http://www.fas.org/irp/doddir/dod/jp1_02.pdf [https://perm‌a.cc/EN7S-YFZP].

[7]A. John Radsan, The Unresolved Equation of Espionage and International Law, 28 Mich. J. Int’l L. 595, 595 (2007).

[8]See Forcese, supra note 4; Navarrete, supra note 5.

[9]S.S. Lotus (Fr. v. Turk.), Judgment, 1927 P.C.I.J. (ser. A) No. 10, at 18–19 (Sept. 7).

[10]To some extent, exceptionalism drives aspects of W. Michael Reisman & James E. Baker, Regulating Covert Action: Practices, Contexts, and Policies of Covert Coercion Abroad in International and American Law (1992).

[11]Indep. Int’l Comm’n on Kos., The Kosovo Report: Conflict, International Response, Lessons Learned 4 (2000).

[12]Reisman & Baker, supra note 10, at 48.

[13]Id.

[14]Deeks, supra note 3, at 604.

[15]Id. at 605–06.

[16]Id. at 606.

[17]Id. at 600 n.1 (internal punctuation omitted).

[18]50 U.S.C.A. § 3093(e) (West 2014).

[19]See Christopher D. Baker, Tolerance of International Espionage: A Functional Approach, 19 Am. U. Int’l L. Rev. 1091, 1091 (2004) (describing espionage as “curiously ill-defined under international law”); Gary D. Brown & Andrew O. Metcalf, Easier Said than Done: Legal Reviews of Cyber Weapons, 7 J. Nat’l Sec. L. & Pol’y 115, 117 (2014); Simon Chesterman, The Spy Who Came in from the Cold War: Intelligence and International Law, 27 Mich. J. Int’l L. 1071, 1072, 1074–75 (2006); Ingrid Delupis, Foreign Warships and Immunity for Espionage, 78 Am. J. Int’l L. 53, 53 (1984); Geoffrey B. Demarest, Espionage in International Law, 24 Denv. J. Int’l L. & Pol’y 321, 323 (1996); Dieter Fleck, Individual and State Responsibility for Intelligence Gathering, 28 Mich. J. Int’l L. 687, 687–88 (2007); Forcese, supra note 4, at 180–81; Manuel R. Garcia-Mora, Treason, Sedition and Espionage as Political Offenses Under the Law of Extradition, 26 U. Pitt. L. Rev. 65, 79–80 (1964); Myres S. McDougal, Harold Lasswell & W. Michael Reisman, The Intelligence Function and World Public Order, 46 Temp. L.Q. 365, 368, 394–95 (1973); Navarrete, supra note 5; W. Hays Parks, The International Law of Intelligence Collection, in National Security Law 433, 433–34 (John Norton Moore et al. eds., 1990); A. John Radsan, The Unresolved Equation of Espionage and International Law, 28 Mich. J. Int’l L. 595, 595–96 (2007); Roger D. Scott, Territorially Intrusive Intelligence Collection and International Law, 46 A.F. L. Rev. 217, 223 (1999); Daniel B. Silver, Intelligence and Counterintelligence, in National Security Law 935 (John Norton Moore & Robert F. Turner eds., 2d ed. 2005) (as updated and revised by Frederick P. Hitz and J.E. Shreve Ariail) (describing the status of espionage in international law as “ambiguous”); Jeffrey H. Smith, Keynote Address at the University of Michigan Journal of International Law Symposium: State Intelligence Gathering and International Law (Feb. 9, 2007), in 28 Mich. J. Int’l L. 543, 544 (2007); Glenn Sulmasy & John Yoo, Counterintuitive: Intelligence Operations and International Law, 28 Mich. J. Int’l L. 625, 625 (2007) (arguing that international law “has had little impact on the practice of intelligence gathering”); Quincy Wright, Espionage and the Doctrine of Non-Intervention in Internal Affairs, in Essays on Espionage and International Law 3 (Roland J. Stanger ed., 1962).

[20]See, e.g., Brown & Metcalf, supra note 19, at 116–17 (noting the legal distinction between cyber-spying and “more aggressive activity in this operations space” may be difficult to maintain in practice); Chesterman, supra note 19, at 1073 (“[C]overt action that causes property damage to the target state or harms its nationals might properly be the subject of state responsibility.”); Demarest, supra note 19, at 330 (“Covert action—whether legally supportable or insupportable when conducted—has a relationship to international legal proscription and mandates already defined by customary international law and the United Nations Charter.”); Fleck, supra note 19, at 692–93 (listing a series of covert actions that “can never be justified under customary law because they are gross violations of commonly accepted legal principles” and stating, “[t]he fact that they are committed through clandestine action offers a strong argument against the existence of any alleged opinio juris covering such conduct in international relations between states”); Smith, supra note 19, at 545 (suggesting that while intelligence collection is tolerated by international law, covert action is prohibited). But see Robert D. Williams, (Spy) Game Change: Cyber Networks, Intelligence Collection, and Covert Action, 79 Geo. Wash. L. Rev. 1162, 1178–79 (2011) (suggesting “[t]he status of covert action under international law is at least as uncertain as the status of espionage” but also noting “there is no bright-line rule regarding the legal status of covert actions: some may be lawful, others unlawful”).

[21]See, e.g., Forcese, supra note 4, at 185; Navarrete, supra note 5, at 44. See also discussion in Simon Chesterman, Secret Intelligence, in 4 The Max Planck Encyclopedia of Public International Law 66 (Rüdiger Wolfrum ed., 2012) (entry last updated Jan. 2009); Christian Schaller, Spies, in 9 The Max Planck Encyclopedia of Public International Law, supra, at 435 (entry last updated Apr. 2009).

[22]See discussion in Forcese, supra note 4, at 180, 186.

[23]Craig Forcese, Creative Ambiguity—International Law’s Distant Relationship with Peacetime Spying, Just Security (Nov. 14, 2013, 8:30 AM), https://www.justsecurity.org‌/316‌8/guest-post-creative-ambiguity-international-laws-distant-relationship-peacetime-spying [https://perma.cc/J5PK-DY73].

[24]S.S. Lotus (Fr. v. Turk.), Judgment, 1927 P.C.I.J. (ser. A) No. 10 (Sept. 7).

[25]Armin von Bogdandy & Markus Rau, The Lotus, in 6 The Max Planck Encyclopedia of Public International Law, supra note 21, at 946, 948 ¶ 15 (entry last updated June 2006).

[26]Michael Jefferson Adams, Jus Extra Bellum: Reconstructing the Ordinary, Realistic Conditions of Peace, 5 Harv. Nat’l Sec. J. 377, 406 (2014).

[27]Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion, 1996 I.C.J. Rep. 226, ¶¶ 21–22 (July 8).

[28]Military and Paramilitary Activities in and Against Nicaragua (Nicar. v. U.S.), Judgment, 1986 I.C.J. Rep. 14, ¶ 202 (June 27).

[29]Deeks, supra note 3, at 643.

[30]Military and Paramilitary Activities in and Against Nicaragua, 1986 I.C.J. Rep. 14, ¶ 205.

[31]Id.

[32]1 Oppenheim’s International Law: Peace 432 (Robert Jennings & Arthur Watts eds., 9th ed. 1992).

[33]Christopher C. Joyner, Coercion, in 2 The Max Planck Encyclopedia of Public International Law, supra note 21, at 296, 297 ¶ 1 (entry last updated Dec. 2006).

[34]Int’l Grp. of Experts, NATO Coop. Cyber Def. Ctr. of Excellence, Tallinn Manual on the International Law Applicable to Cyber Warfare 45 (Michael N. Schmitt ed., 2013) [hereinafter Tallinn Manual].

[35]S.S. Lotus, 1927 P.C.I.J. (ser. A) No. 10, at 18–19.

[36]Menno T. Kamminga, Extraterritoriality, in 3 The Max Planck Encyclopedia of Public International Law, supra note 21, at 1070, 1075 ¶ 22 (entry last updated Mar. 2008).

[37]Guy Stessens, Money Laundering: A New International Law Enforcement Model 280 (2000).

[38]F.A. Mann, The Doctrine of International Jurisdiction Revisited After Twenty Years, in 186 Collected Courses of the Hague Academy of International Law 9, 38–39 (1984).

[39]Alexander Orakhelashvili, Governmental Activities on Foreign Territory, in 4 The Max Planck Encyclopedia of Public International Law, supra note 21, at 553, 556 ¶ 15 (entry last updated July 2010).

[40]Chesterman, supra note 21, at 68, ¶ 14; see also Fleck, supra note 19, at 692–93 (arguing that covert actions that “can never be justified under customary law because they are gross violations of commonly accepted legal principles” include “unauthorized entry into a foreign state’s airspace or territory, illegal exercise of jurisdiction on foreign territory, attempts to destabilize the government of another state, and common crimes, such as bribery, blackmail, unlawful entry into residences, or a breach of data protection laws committed in the course of such acts” (footnotes omitted)).

[41]Stephan Wilske, Abduction, Transboundary, in 1 The Max Planck Encyclopedia of Public International Law, supra note 21, at 4, 5 ¶ 2 (entry last updated March 2009); Raanan Rein, The Eichmann Kidnapping: Its Effects on Argentine-Israeli Relations and the Local Jewish Community, Jewish Soc. Stud., Spring/Summer 2001, at 101, 105.

[42]Rein, supra note 41, at 106 (citing Letter from Arieh Levavi, then-Ambassador to Argentina, to the Foreign Ministry of Israel (June 2, 1960)).

[43]Id. at 108.

[44]Id. at 109.

[45]See S.C. Res. 138, ¶ 1(June 23, 1960).

[46]Id. ¶ 2.

[47]Rein, supra note 41, at 110–11.

[48]F.A. Mann, The Doctrine of Jurisdiction in International Law, in 111 Collected Courses of the Hague Academy of International Law 1, 138 (1964).

[49]Orakhelashvili, supra note 39, at 556, ¶ 14.

[50]Mann, supra note 48, at 139 (footnote omitted).

[51]François Rigaux, Droit Public et Droit Privé dans les Relations Internationales 321 (1977); cf. Stessens, supra note 37, at 281 (discussing that when it comes to noncoercive measures, the question of incompatibility with international law is not as clear-cut as with coercive measures, but that these are still arguably problematic).

[52]Orakhelashvili, supra note 39, at 556, ¶ 14.

[53]See, e.g., Tallinn Manual, supra note 34, at 42.

[54]Can. Sec. Intelligence Servs. Act (Re), 2008 FC 301, ¶¶ 2, 51, 62, 69, 71 (Can.).

[55]X (Re), 2009 FC 1058, ¶¶ 40–47 (Can.).

[56]X (Re), 2014 FCA 249, ¶¶ 6–11 (Can.).

[57]Id. ¶¶ 6–18.

[58]X (Re), 2013 FC 1275, ¶¶ 102–15 (Can.).

[59]Tallinn Manual, supra note 34, at 1–5.

[60]Id. at 30.

[61]Id. at 16.

[62]Id. at 44–45.

[63]For a discussion of whether a de minimis standard should exist for cross-border electronic searches, see Nicolai Seitz, Transborder Search: A New Perspective in Law Enforcement?, 7 Yale J.L. & Tech. 23, 42–44 (2004–05). But see Navarrete, supra note 5, at 24 (arguing that there should be a de minimis concept associated with the physical intrusion associated with cyber surveillance).

[64]Seitz, supra note 63, at 43.

[65]Council of Europe, Convention on Cybercrime, ch. II, sec. 1, tit. 1, Nov. 23, 2001, C.E.T.S. No. 185.

[66]See, e.g., Reisman & Baker, supra note 10, at 1–2, 136–43. For a different set of guidelines, see Loch K. Johnson, On Drawing a Bright Line for Covert Operations, 86 Am. J. Int’l L. 284, 305–09 (1992).

[67]Deeks, supra note 3, at 667–85.

[68]Id. at 671–75.

[69]Id. at 605.

[70]Id. at 669.

[71]Nigel D. White, Advanced Introduction to International Conflict and Security Law 71 (2014).

[72]Id. at 70.

[73]See supra note 12 and accompanying text.

Changing the Face of Urban America: Assessing the Low-Income Housing Tax Credit

On June 25, 2015, the U.S. Supreme Court held that Low-Income Housing Tax Credit (“LIHTC”) allocations could violate the Fair Housing Act (“FHA”) if used to perpetuate racially concentrated poverty.[1] On the heels of this decision, on July 8, 2015, the U.S. Department of Housing and Urban Development (“HUD”) issued its final rule on the FHA’s Affirmatively Furthering Fair Housing (“AFFH”) provisions, mandating that state and local governments use federal housing money to mitigate racial segregation or face sanctions.[2] This Essay reconciles incongruous concerns that the LIHTC is “creaming the crop” of subsidized tenants (that is to say, serving the working poor as opposed to the poorest), thereby displacing the most marginalized households from central cities, with the recent barrage of accusations that the “poverty housing industry” is only further relegating the poorest to slum, blight, and distress. Celebrating the LIHTC as a successful public-private partnership, this Essay suggests that the LIHTC is changing the face of urban America by investing in both high- and low-poverty neighborhoods, bringing higher-income households into the lowest-income urban tracts and very low-income households into the suburbs. Countering criticisms of the LIHTC as redundant because of demand-side subsidies, this Essay concludes that the LIHTC is fostering a more regional distribution of affordable housing, an outcome unattainable by voucher provision alone.

INTRODUCTION

Today, the largest and most important federal housing program in the United States is the Low-Income Housing Tax Credit program,[3] with a size and scale comparable to public housing and the federal Section 8 program.[4] But, quite unlike public housing and Section 8, the LIHTC is not a deep subsidy. LIHTC projects are not targeted at households with very low incomes, nor do rental payments vary with a tenant’s income. Yet, the LIHTC may still be serving the lowest-income families.

The community-level benefits of LIHTC developments far outweigh those of vouchers alone. The LIHTC has revitalized communities, mobilized a corporate lobby, and attracted ambitious professionals to the affordable housing industry, all to the ultimate benefit of low-income tenants. The public nature of U.S. Department of Housing and Urban Development programs means that they alone cannot achieve such outcomes. HUD needs the LIHTC to withstand political risk and to benefit from the incentive structure that only market mechanisms can provide. “Privatization” is not a singular phenomenon, but rather a complex set of relationships between public, private, and nonprofit entities. The LIHTC typifies the kind of place-based double, or even triple, bottom-line real estate investments needed in American cities today to address social problems while producing developer and investor profits. Rather than criticize the “poverty housing industry” for nefariously profiting from “federally financed ghettos,”[5] and further isolating the poor, this Essay celebrates the LIHTC as a successful public-private partnership that achieves a more regional distribution of affordable housing by moving more American households into lower-poverty, less-distressed areas, both urban and suburban.

I. Privatizing Low-Income Housing

The public housing program was born in 1937 as one of the final major pieces of New Deal legislation.[6] Yet public housing construction did not begin in earnest until after World War II.[7] The production of public housing continued to increase from the program’s start until the 1980s.[8] While public housing was originally intended for two-parent middle class families as opposed to the poorest, “[t]he postwar period saw less of the submerged middle class remain in public housing.”[9] The rapid growth of Federal Housing Administration mortgage insurance enabled millions of working- and middle-class families to purchase modest homes in new suburban developments, facilitating “white flight” from city centers.[10] Simultaneously, African Americans in the South were migrating to the rapidly industrializing North in search of economic and social mobility.[11] Facing discrimination in housing markets, very low-income people of color were soon obtaining housing in urban public housing projects.[12] Reflecting this, “the median income of public housing residents fell from 57% of the national median in 1950 to 41% in 1960, 29% in 1970, and less than 20% by the mid-1990s.”[13] The stock of public housing reached its peak in 1994 at approximately 1.4 million units.[14] By 2008, it had declined 19% with a loss of almost 270,000 units.[15] While public housing continues to provide housing to “more than a million households,” its fate is sealed: Active production is rare, while the number of demolitions is significant.[16] And, although the federal government has not built public housing since 1983, the program still faces a severe backlog of repairs and unmet capital needs.[17] Changing the face of urban America, the public housing stock will only continue to contract over time, as the government shifts its resources away from publicly owned housing.[18]

Affordable housing delivery in the United States has evolved toward greater privatization, now constructed and maintained through an assortment of public and private financing tools, most of which public housing is unable to access or leverage.[19] Section 8, the first program to separate federal housing subsidies from the ownership of housing, refers to the voucher program’s statutory authorization under Section 8 of the United States Housing Act of 1937, as amended by the Housing and Community Development Act of 1974.[20] The Quality Housing and Work Responsibility Act of 1998[21] combined the tenant- and project-based rental assistance programs into a single program, the Housing Choice Voucher program, although it is still widely known simply as Section 8.[22]

Under the tenant-based program, a public housing authority (“PHA”) provides a voucher to an eligible family and the family chooses the unit. If the family moves out of the unit, the contract with the owner terminates and the family can move with continued assistance to another unit of choice.[23] Voucher recipients pay toward rent either 30% of monthly adjusted income, 10% of monthly income, the welfare rent, or a PHA minimum rent: whichever is greatest.[24] HUD covers the remaining costs, up to a PHA payment standard.[25] The difference between housing costs in the private market and tenant incomes thus determines the cost to the government of each voucher. About two million families currently receive tenant-based vouchers, including more than one million with minor children.[26]

A PHA can also project-base up to 20% of its available voucher funding.[27] Under the Section 8 project-based rental assistance (“PBRA”) program, a PHA negotiates with a private owner for specific units, and “then refers families from its waiting list to the owner to fill vacancies.”[28] Since assistance is linked to the apartment, if a family moves out of a project-based unit it is not guaranteed continued support. Although Section 8 PBRA is by far the biggest, there are also some smaller PBRA subsidies, such as project-based vouchers (“PBVs”).[29] Unlike with PBRA, families with PBVs are still assisted by voucher payments even when they relocate.[30] PBRA remains an important source of gap financing in today’s affordable housing deals, particularly in the absence of redevelopment funds in California[31] and in the face of further cuts to HUD programs such as the Community Development Block Grant (“CDBG”) and the HOME Investment Partnerships Program.[32] It is likely that many HUD programs will only continue to diminish over time[33] given the “more insistent cries to run government like a business.”[34]

Nevertheless, thanks to the LIHTC, the federal government still has a large and growing footprint in the multifamily affordable housing industry. In fact, the creation of the LIHTC with the Tax Reform Act of 1986[35] marked nothing short of a radical transformation in the provision of subsidized housing, changing the face of urban America. Just as the central city was being cleared of public housing, the LIHTC emerged to drastically change where subsidized housing was being located.

Achieving the long-elusive goal of deconcentrating poverty, the LIHTC fosters a more regional distribution of affordable housing, finally giving low-income families more access to “high-opportunity” neighborhoods. Locating more than one-third of its units in the suburbs, the LIHTC is “meeting, and even exceeding, the . . . [voucher] program in offering opportunities to live in low-poverty suburban settings.”[36] Counterintuitively, the LIHTC is also reducing poverty concentration in high-poverty urban neighborhoods “since [many] residents of tax-credit housing tend to have incomes that are well-above the poverty line.”[37] This is important because “extremely low-income renters are more likely to live in poorer quality neighborhoods.”[38] So-called “gentrification”[39] may in fact create neighborhoods more attractive to minority households.[40] And, although a desire to maximize the amount of LIHTCs received attracts developers to neighborhoods designated as Difficult Development Areas (“DDAs”) or Qualified Census Tracts (“QCTs”),[41] which are often minority and low income, LIHTC neighborhoods are still not as disadvantaged as those with public housing and other project-based federal subsidies.[42] In fact, housing subsidized by the LIHTC is far less likely to be in highly segregated neighborhoods than is public housing.[43] By locating in a wide variety of neighborhoods, then, LIHTC developments may bring both “somewhat higher-income households into very low-income tracts” and “very low-income households into higher-income tracts,”[44] ameliorating poverty’s spatial effects. Perhaps even more significantly, though, beyond the number or quality of units or characteristics of the neighborhoods where these units are built, the LIHTC has overhauled the politics of low-income housing in the United States by gaining credence with profit developers and thus “pushing local politics toward allowing affordable housing rather than opposing it.”[45] Profit developers “are not merely participants” in the program but initiators of the process.[46]

Today, the LIHTC program supports more than 2.5 million units, increasing by about 90,000 to 100,000 units per year, and financing 85,000 subsidized apartments since 2000.[47] Almost all new low-income housing in the United States leverages the LIHTC. It works by encouraging private investors to make equity investments in limited partnership or limited liability company entities that generate tax credits, reducing federal taxes owed dollar for dollar. In return, the units developed have to be rented to households whose initial incomes do not exceed 60% or 50% of the area median income (“AMI”). By applying for LIHTCs, developers agree to set aside either 40% of units for residents earning no more than 60% of AMI or 20% of units for residents earning no more than 50% of AMI.[48] Developers use the equity generated to reduce the debt burden on the properties, thus making it easier to offer affordable rents.[49]

Big banks are motivated to participate in the LIHTC program to receive favorable consideration under the federal Community Reinvestment Act (“CRA”).[50] The CRA was passed by Congress in 1977 and mandates that banks invest resources in the local communities in which they operate.[51] It requires federal regulators to evaluate an institution’s lending in low-income neighborhoods.[52] Fortunately for the development of low-income housing, banks receive positive CRA review for LIHTC investments when they benefit a bank’s assessment area, defined to include where the bank has its main office, branches, and deposit-taking ATMs.[53] For major financial institutions, then, the LIHTC offers a true double bottom-line opportunity.[54] Not only do investors receive a credit that reduces tax liability, plus passive loss benefits, but banks receive credits toward their regulatory ratings under the CRA.[55]

The LIHTC also garners bipartisan support by motivating private-sector investment, and thus reducing reliance on federal grants. Its market-based features please politicians, and the allocation of credits to the states on a per capita basis is supported by Congress. By benefiting more parties than the typical HUD program, the LIHTC has forged a “broad political constituency to advocate for the creation and maintenance of the provision.”[56] Reframing low-income housing’s long-contentious politics, the LIHTC has resulted in “less controversy and more success.”[57]

In fact, the diverse coalition supporting the credit, including housing advocates, financial institutions, nonprofits,[58] and law and accounting firms, has allowed for an enlargement of the credit at a time when comparable spending programs have been constrained. Many members of the American public, and its political leaders, think there is no reason for the federal government to subsidize low-income housing.[59] Criticisms that HUD is too “costly” and “clunky”[60] abound. Yet because of its exclusion from the regular budget process, a tax provision like the LIHTC escapes the annual review required of a direct appropriation.[61] It therefore costs the government in the form of foregone federal tax revenue, but it does not show up as an expense.

II. Creaming the Crop? Refuting Criticisms of the LIHTC

The LIHTC is not a deep subsidy, differing starkly from other forms of federal housing assistance. With most HUD programs, gross rent, defined to include rent and tenant-paid utilities, cannot exceed 30% of actual tenant income.[62] But, with the LIHTC, “maximum unit rents are set at 30% of the applicable income limit under which the unit qualified for tax credits.”[63] Thus, little is actually known about the rent burden of families in LIHTC developments. For example, “[i]f a unit that qualifies as LIHTC at 60% of AMI is occupied by a household with an income lower than that, the maximum rent chargeable does not change.”[64] Tenant advocates are justifiably concerned that tax-credit housing is not reaching the poorest and most vulnerable households.

Since the Internal Revenue Service (“IRS”) does not collect data on LIHTC tenants, very little is known about them. Fortunately, Congress remedied this by recently mandating that the state housing agencies that monitor LIHTC compliance provide HUD with tenant data.[65] However, whether and when these data will become publicly available is uncertain.[66] Until then, the little we do know about LIHTC tenants is based on the small number of studies that presently exist. And LIHTC tenants appear to be much poorer than is popularly assumed.

Unsurprisingly, compared to those living in public housing or Section 8–assisted housing, “a significantly smaller share of LIHTC households have [extremely low incomes],” defined as “at or below 30% of AMI.”[67] While over a full three-quarters of families served by HUD’s largest programs meet this standard, only 45% of LIHTC households do.[68] Nevertheless, the LIHTC is still providing housing for some of the poorest and most vulnerable households, far more than the LIHTC rules require.[69] Approximately 46% of families overall, and more than 70% of extremely low-income families, in LIHTC units are simultaneously receiving some additional form of rental assistance.[70] For example, about 47% of the LIHTC “properties placed in service from 1995 through 2006 house one or more tenants with rental vouchers.”[71] Around 16% of voucher holders are believed to reside in LIHTC developments.[72] This is partly because LIHTC owners, unlike private owners, cannot discriminate based on the source of income and must accept vouchers.[73]

Gap financing from HUD and state and local governments remains imperative if developers are expected to house families with incomes at or below the poverty level.[74] In fact, “rental assistance plays a significant role in allowing LIHTC developments to serve extremely low-income households.”[75] For these reasons, scholars such as David Weisbach contend that the LIHTC should be replaced with more direct spending on tenant vouchers.[76] And, it is true, the late tax scholar Stanley Surrey, known widely as a “dean of the academic tax bar”[77] and “the greatest tax scholar of his generation,”[78] advanced the view that tax expenditures in general are bad tax policy.[79]

According to scholars such as David Weisbach and Jacob Nussim, locating a policy program in the tax code makes sense only if the IRS is a more efficient administrator of that program.[80] This is the case only for programs where measuring income and processing paper predominate, such as welfare benefits.[81] Yet, arguably by political accident, the IRS nonetheless administers the largest supply-side housing program in the United States.[82]

Administration by the IRS may have the unintended benefit of raising the quality of affordable housing, however. Although the IRS does not possess any expertise in housing, over a fifteen-year period it places on investors the risk of recapture of the credits, plus interest.[83] Administration by the IRS thereby effectively privatizes oversight. This provides a needed market check on projects, in turn resulting in higher-quality housing and upgrading the urban environment, possibly by raising property values and spurring commercial activity.[84] Lacking the efficiency and discipline of the private market, HUD is not as adequately staffed or as motivated to provide the same degree of vigilance.

Weisbach nonetheless contends that supply- and demand-side housing subsidies are redundant. And, it is true that, until 1986, the shift to demand-side programs appeared permanent.[85] Even so, much of the criticism of the LIHTC is based on the credit in its infancy.[86] Today, not only have syndication costs decreased, but investors are willing to accept lower returns, due to the stability of the program and in part motivated by the depreciation deductions. There are also growing market types and conditions in which the LIHTC may be more cost-efficient than vouchers, specifically in gentrifying urban communities with high rent.[87]

In fact, the depressed rental housing market of the late 1970s may be the reason for the perceived cost advantages of vouchers.[88] Today, as America’s urban neighborhoods rebound, driving up rents, the cost to the federal government of administering the voucher program continues to grow.[89] The LIHTC may thus be more effective than vouchers both in retaining the original residents of the country’s reviving city centers and in allowing more low-income households to relocate to middle-income suburbs.[90] The LIHTC is also justified as part of an overall community development strategy, which may incur higher costs but triggers neighborhood gains.[91] Extensive investment in affordable housing construction and rehabilitation has been proven to “completely rebuil[d] the urban fabric.”[92]

Since the 1990s, U.S. cities have experienced a revived interest in urban living that is likely not attributable to market shifts alone.[93] Rather, the LIHTC has been a major driver of this urban investment. Bringing higher-income households into the lowest-income urban tracts and very low-income households into the suburbs, the LIHTC is hypothesized to have fostered “place prosperity,”[94] changing the face of urban America.[95] And while a dichotomy is sometimes posed between people-based and place-based policies, “people are place, and place is people.”[96] The widespread regeneration of America’s low-income urban communities has not perpetuated a classic pattern of gentrification. Original residents in the country’s reviving city centers “are much less harmed than is typically assumed.”[97] Nor has urban America’s resurgence disproportionately hurt people of color.[98] Rather, both the voucher and LIHTC programs have grown in importance over recent years, moving more American households into lower-poverty, less-distressed areas.

Despite recent outcry over the retrenchment of federal housing assistance by scholars like Edward Goetz and Lawrence Vale,[99] the reality is that there are far more households assisted by subsidies today than there were in 1997.[100] While in 1997, there were only 699,461 units assisted by the LIHTC program, in 2010, there were 1,971,093.[101] Likewise, while 1,433,000 households received vouchers in 1997, a full 2,300,144 received them by 2010.[102] In total, 6,087,413 households were in assisted housing in 2010, compared to only 4,997,716 in 1997.[103] Homelessness has also fallen since 2007.[104] Rather than “creaming the crop,” then, contemporary federal housing policy is aiding the poorest in consuming existing housing, while offering a smaller “subsidy to assist a less poor population through production of new or fully renovated units,”[105] thereby remedying neighborhood distress.

III. Problematizing the “Ghetto” in the American Cultural Imagination

The LIHTC has long been decried as a tool of gentrification, assisting only the “barely poor” so as to displace the most marginalized from the central city in the name of profit-driven urban “revitalization.”[106] Yet, in the wake of the U.S. Supreme Court’s unexpected decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc.[107] and HUD’s attendant Affirmatively Furthering Fair Housing final rule,[108] the LIHTC is now being called out, unfairly, for failing to provide the poor with access to affluent white suburbs and neighborhoods of “opportunity.” This Essay suggests that the LIHTC has fallen victim to a false dichotomy, an urban/suburban, black/white distinction that is more a vestige of “the iconic ghetto and its relation to the white space”[109] than a contemporary reality. Taking the “history of state-sanctioned racial segregation”[110] most seriously, this Essay demonstrates that the LIHTC has mitigated, not exacerbated, the “impact of structural poverty and racism on the inner-city ghetto”[111] by achieving a more regional distribution of affordable housing. While it is clear that federal policymakers have “promulgat[ed], abbett[ed], and perpetuat[ed]” racial segregation and ghettoization, “the Low-Income Housing Tax Credit is not a significant part of this story.”[112]

The Inclusive Communities Project, Inc. (“ICP”), a Dallas-based nonprofit, sued the State of Texas over how LIHTCs were allocated to the city of Dallas. The ICP alleged that Texas had violated the Fair Housing Act by allocating the vast majority of its LIHTCs to “predominantly black inner-city areas” and supporting too few developments in “white suburban neighborhoods.”[113] The Court held that ICP’s claim could proceed under the FHA, and then remanded the case to the district court to decide whether Texas’s distribution of LIHTCs indeed resulted in a disparate impact on racial minorities.[114]

Two weeks later, HUD issued its final rule on the FHA’s AFFH provisions, bolstering the Inclusive Communities decision by requiring that cities use federal housing money to reduce racial disparities, or face penalties.[115] While rightly lauded as important civil rights advances that revived a FHA that has long laid dormant, this Essay contends that both Inclusive Communities and the AFFH final rule rest on an incongruity. The LIHTC cannot coherently be faulted for sanitizing the inner city, “creaming the crop” of subsidized tenants to make way for white gentrification, while at the same time being attacked for catalyzing a “large and lucrative industry” profiting off the status quo by keeping black families out of the white suburbs.[116] Fortunately, this paradox is unraveled, easily, by a quick look at the data on where LIHTC developments are actually being sited, and the inconsistent policy priorities motivating developers’ locational decisions.

The Qualified Allocation Plan (“QAP”) is what states use to award the competitive 9% credits.[117] By law, states are to give preference to “projects serving the lowest income tenants”[118] and projects located in QCTs, census tracts with 25% of the population in poverty, or where at least 50% of households have incomes below 60% of area median income, “the development of which contributes to a concerted community revitalization plan.”[119] However, since the LIHTC statute provides no guidance on what constitutes such a plan,[120] “there is wide variation across states in the types of neighborhoods where tax-credit units are sited.”[121]

Since 2002, the allocation of tax credits has “shifted away from high-poverty neighborhoods” and “towards moderate- and low-poverty neighborhoods,” while “a few states have adopted large increases in their prioritization of opportunity areas.”[122] Accordingly, more than one-third of all LIHTC developments are now located in the suburbs.[123] And of the LIHTC units built in suburbs, half are in census tracts with poverty rates of less than 10% .[124] However, the suburbs have grown poorer.[125] Today, poverty is growing twice as fast in suburbs as in cities.[126] Suburbs are also increasingly non-white.[127] As Myron Orfield observes, “[i]f the suburbs were ever a homogeneous bastion of untroubled prosperity, they certainly are no longer.”[128] For these reasons, recent polemics stage a false dualism between those seeking “full integration of poor people, and especially poor minorities, into well-off, largely white [suburban] neighborhoods” and the “poverty housing industry” accused of “justif[ying] the placement of affordable housing in the poorest [urban] sectors by arguing it will encourage neighborhood revitalization and economic growth.”[129]

The voucher program was intended to allow poor families to relocate to high-opportunity neighborhoods, but has failed as an instrument of desegregation since landlords are not required to accept tenants who rely on Section 8.[130] Therefore, the LIHTC has been better able to “penetrate the low-poverty suburbs”[131] and is thus doing more to deconcentrate poverty than its critics allow. Since developers “chase points,” the preference in the LIHTC statute for “projects serving the lowest income tenants” works against a desire for more LIHTC projects in high-income areas.[132] If lawmakers are to maintain the preference for QCTs, the mandate of a “concerted community revitalization plan”[133] must be made more concrete if the LIHTC program is to affirmatively further fair housing by “replacing segregated living patterns with truly integrated and balanced living patterns, transforming racially and ethnically concentrated areas of poverty into areas of opportunity.”[134] Otherwise, the LIHTC program cannot be rebuked for not making inroads into “opportunity” neighborhoods when policymakers themselves are conflicted.

IV. Forging an Industry Based on Public-Private Partnership

Today, public-private partnerships are a significant and growing sector of the urban economy, with the LIHTC a pivotal driver of innovation in housing policy at the federal, state, and local levels. The LIHTC has not only broadened low-income housing’s political constituency, but has enlarged the concept of “value.” This benefits America’s poorest households in ways that a cost-efficiency comparison with HUD programs cannot reveal. Rather than assume that social and financial goals must be in opposition, the LIHTC is a paradigmatic example of what Professor Nestor Davidson calls “the practical mechanisms of [a] private ordering.”[135] By this he means that, by aligning the profit motive of a private client with the goal of providing market-rate shelter to poor families, mitigating the impacts of concentrated urban poverty, the LIHTC expands a real estate transaction’s value beyond simply maximizing overall return.[136] Using private means to achieve public ends, the LIHTC invests the government in the outcome of private transacting with unprecedented vigor.

Scholars like Jon Michaels rightly worry about overreliance on the private sector and the concomitant hollowing out of the federal government. And it is true that American privatization is now a “trillion-dollar phenomenon,” with private actors carrying out more and more public functions.[137] Yet, despite its negative connotations, “privatization” may in reality be a complex set of relationships between government at all levels, financial institutions, and nonprofits, always with conflicting goals. It is precisely this diversity of interests represented by any given LIHTC deal that this Essay suggests is propelling policy innovation by attracting ambitious deal makers motivated by private incentives but also driven by public goals.

Conclusion

Perhaps the LIHTC explains why the face of urban America has changed so drastically since the 1990s. Maybe privatization does not have to pose a challenge to the goal of providing housing to the poorest population. After all, it is at least possible that financial institutions can gain from affordable housing’s transformation while nevertheless improving the lives of poor tenants.

[1]Tex. Dept. of Hous. & Cmty. Affairs v. Inclusive Cmtys Project, Inc., 135 S.Ct. 2507, 2525 (2015).

[2]Julie Hirschfeld Davis & Binyamin Applebaum, Obama Unveils Stricter Rules Against Segregation in Housing, N.Y. Times (July 8, 2015), http://www.nytimes.‌com/201‌5/07‌/‌09/us/hud-issuing-new-rules-to-fight-segregation.html [https://perma.cc/YR2F-44‌XU‌].

[3]Alex F. Schwartz, Housing Policy in the United States 103 (2d ed. 2010); Moelis Inst. for Affordable Hous. Policy, What Can We Learn About the Low-Income Housing Tax Credit Program by Looking at the Tenants? 1 (2012), http://furman‌cen‌ter.org‌/file‌s/publicatio‌ns/LIHTC_Final_Policy_Brief_v2.pdf [https://perma.cc/7EEU-G5‌Q4]; Low-Income Housing Tax Credits, HUD USER, http://ww‌w.huduser.org/portal/datasets/lihtc.html [https:‌//perma.cc/6LTR-UC8R] (last visited May 16, 2016). The LIHTC is codified at 26 U.S.C. § 42 (2012).

[4]Katherine M. O’Regan & Keren M. Horn, What Can We Learn About the Low-Income Housing Tax Credit Program by Looking at the Tenants?, 23 Housing Pol’y Debate 597, 597 (2013).

[5]See Op-Ed., The End of Federally Financed Ghettos, N.Y. Times (July 11, 2015), http://www.nytimes.com/2015/07/12/opinion/the-end-of-federally-financed-ghett‌os‌.html?_r=0 [https://perma.cc/2PUU-6NNK].

[6]Schwartz, supra note 3, at 125.

[7]Id. at 126.

[8]Id.

[9]Id. at 129.

[10]Priscilla A. Ocen, The New Racially Restrictive Covenant: Race, Welfare, and the Policing of Black Women in Subsidized Housing, 59 UCLA L. Rev. 1540, 1555 (2012).

[11]See Elijah Anderson, The White Space, Sociology of Race and Ethnicity 10, 11 (2015) (“As blacks arrived and settled in cities, they were typically contained in ghettos . . . .”).

[12]See Schwartz, supra note 3, at 129; Lawrence J. Vale, Purging the Poorest: Public Housing and the Design Politics of Twice-Cleared Communities 17 (2013) (“[P]ublic housing in most large urban centers changed because much of its initial white working-class constituency chose to leave it behind for other housing alternatives . . . .”).

[13]Schwartz, supra note 3, at 129; accord Vale, supra note 12, at 17 (“By 1992, HUD reported that the majority of public housing incomes fell below 20 percent of the median of their metropolitan areas.”).

[14]Schwartz, supra note 3, at 126.

[15]Id.

[16]Kirk McClure & Bonnie Johnson, Housing Programs Fail to Deliver on Neighborhood Quality, Reexamined, 25 Housing Pol’y Debate 3–4 (2014), http://www.tand‌fonli‌n.com/doi/pdf/10.1080/10511482.2014.944201 [https://perma.cc/D7WW-U33X].

[17]Schwartz, supra note 3, at 139; see also Rental Assistance Demonstration, U.S. Dep’t Housing & Urb. Dev., http://portal.hud.gov/hudportal/HUD?src=/RAD [https://p‌erma.cc/UL8S-KPC3] (last visited May 16, 2016) (estimating a $25.6 billion backlog of public housing capital improvements).

[18]McClure & Johnson, supra note 16, at 29.

[19]Criticized as privatization, yet celebrated as “cost-neutral,” HUD’s Rental Assistance Demonstration is a recent attempt to allow public housing agencies to leverage private debt and LIHTC equity investments. Rental Assistance Demonstration, supra note 17.

[20]Pub. L. No. 93-383, tit. II, § 201(a), 88 Stat. 633, 662–66 (codified as amended at 42 U.S.C. § 1437f (2012)); Schwartz, supra note 3, at 177–78.

[21]Pub. L. No. 105-276, tit. V, § 545, 112 Stat. 2518, 2596–604 (codified as amended at 42 U.S.C. § 1437f (2012)).

[22]Schwartz, supra note 3, at 180.

[23]Id.

[24]Lan Deng, The Cost-Effectiveness of the Low-Income Housing Tax Credit Relative to Vouchers: Evidence from Six Metropolitan Areas, 16 Housing Pol’y Debate 469, 488 (2005).

[25]Id.

[26]Deven Carlson et al., The Benefits and Costs of the Section 8 Housing Subsidy Program: A Framework and Estimates of First-Year Effects, 30 J. Pol’y Analysis & Mgmt. 233, 234 (2011).

[27]Project-Based Voucher Program, U.S. Dep’t Housing & Urb. Dev., http://portal.‌hud‌.‌gov/hudportal/HUD?src=/hudprograms/projectbased [https://perma.cc/Y6BH-3MD‌E] (last visited May 16, 2016).

[28]Deng, supra note 24, at 493.

[29]Policy Basics: Section 8 Project-Based Rental Assistance, Ctr. on Budget & Pol’y Priorities 2 (June 1, 2015), http://www.cbpp.org/files/PolicyBasics-housing-1-25-13‌P‌BRA.pdf [https://perma.cc/8G74-RYY3].

[30]Id.

[31]See, e.g., Angela Kopolovich, California Supreme Court Upholds Law Dissolving Redevelopment Agencies, St. Ct. Docket Watch (Federalist Soc’y for L. & Pub. Pol’y Studies), Spring 2012, at 5 (discussing California Redevelopment Ass’n v. Matosantos, 267 P.3d 580 (Cal. 2011), which upheld a state law eliminating redevelopment agencies entirely).

[32]See, e.g., Obama’s FY 2015 Budget Requests $46.7 Billion for HUD Programs, Nat’l Housing & Rehabilitation Ass’n (Mar. 5, 2014), https://www‌.hou‌sing‌online‌.com/201‌4/‌03/05/obamas-fy-2015-budget-requests-467-billion-for-hud-programs/ [https://perma.cc/93‌E3-L6L9] (reporting that President Obama’s fiscal year 2015 budget “reduc[es] funding for the CDBG to $2.8 billion and HOME to $950 million, which combined is $280 million less than [the] 2014 enacted level”).

[33]McClure & Johnson, supra note 16, at 7.

[34]See Jon D. Michaels, Running Government Like a Business . . . Then and Now, 128 Harv. L. Rev. 1152, 1152 (2015) (reviewing Nicholas R. Parrillo, Against the Profit Motive: The Salary Revolution in American Government 1780–1940 (2013)).

[35]Pub. L. No. 99-514, tit. II, § 252(a), 100 Stat. 2085, 2189–205 (codified as amended at 26 U.S.C. § 42 (2012)).

[36]McClure & Johnson, supra note 16, at 10–11, 18 (concluding that the LIHTC performs as well as the Housing Choice Voucher program in “making entry into the suburbs, migrating away from the distress so often found in central-city neighborhoods”).

[37]Schwartz, supra note 3, at 115.

[38]Joint Ctr. for Hous. Studies of Harvard Univ., The State of the Nation’s Housing 29 (2014).

[39]Adam Gopnik, Naked Cities: The Death and Life of Urban America, New Yorker, Oct. 5, 2015, http://www.newyorker.com/magazine/2015/10/05/naked-cities [https://perma.c‌c/93DH-MM72] (“[T]he chief way that cities have renewed and restored themselves in recent times is through the process that has the ill-given name of gentrification—ill-given because it is dehumanizing to fix under the label ‘gentry’ the mixture of social types who reenter the urban arena, ranging from real-estate keeners to young gay couples to painters seeking space, just as it is to label a similar mixture of social types an ‘underclass.’”).

[40]See John Buntin, The Myth of Gentrification: It’s Extremely Rare and Not as Bad for the Poor as You Think, Slate, Jan. 14, 2015, http://www.slate.c‌om/arti‌cles/n‌ews_and_politics/politics/2015/01/the_gentrification_myth_it_s_rare_and_not_as_bad_for_the_poor_as_people.html [https://perma.cc/PG4Q-2BCS] (suggesting the real problem is “gentrification” too often bypassing black neighborhoods).

[41]David Black et al., Office of the Comptroller of the Currency, Low-Income Housing Tax Credits: Affordable Housing Investment Opportunities for Banks, Community Dev. Insights, Apr. 2014, at 12 & nn.38–39 (stating that projects in QCTs “with a poverty rate of at least 25 percent or . . . where 50 percent of the households have incomes below 60 percent of the area median income,” or in DDAs with “high construction, land, and utility costs relative to the area median gross income,” may receive a “basis boost” of 30% more eligible costs in the LIHTC calculation).

[42]Schwartz, supra note 3, at 115; McClure & Johnson, supra note 16, at 10.

[43]Alex Schwartz, The Low-Income Housing Tax Credit, Community Development, and Fair Housing: A Response to Orfield et al., 26 Housing Pol’y Debate 276, 277 (2016).

[44]Ingrid Gould Ellen & Katherine O’Regan, Exploring Changes in Low-Income Neighborhoods in the 1990s, in Neighborhood and Life Chances: How Place Matters in Modern America 103, 117 (Harriet B. Newburger et al. eds., 2011).

[45]McClure & Johnson, supra note 16, at 12.

[46]Id.

[47]Schwartz, supra note 43, at 277; McClure & Johnson, supra note 16, at 6.

[48]Schwartz, supra note 3, at 105.

[49]Id.

[50]12 U.S.C. §§ 2901–2908 (2012).

[51]Schwartz, supra note 3, at 281.

[52]Id.

[53]Community Reinvestment Act, Partnership for Progress, http://www.fedpart‌ner‌ship.g‌ov/bank-life-cycle/topic-index/community-reinves‌tment‌-act.cfm [https://perma.cc/R63N-Y5PF] (last updated Sept. 6, 2013).

[54]See Alison Lingane & Sara Olsen, Guidelines for Social Return on Investment, 46 Cal. Mgmt. Rev 116, 117 (2004) (conceptualizing “social bottom line” as the social parallel to a firm’s “financial bottom line” and defining the term as “[t]he net social benefit from business operations”).

[55]Black et al., supra note 41, at 2 n.3, 7, 9–12 (discussing passive loss benefits, the CRA, and tax credits).

[56]Clinton G. Wallace, Note, The Case for Tradable Tax Credits, 8 N.Y.U. J.L. & Bus. 227, 269 (2011).

[57]McClure & Johnson, supra note 16, at 12.

[58]Federal law requires that 10% of each state’s annual housing tax credit ceiling be set aside for projects involving nonprofits. 26 U.S.C. § 42(h)(5) (2012).

[59]See, e.g., Josh Barro, Romney Is Right: Abolish HUD, Forbes (Apr. 16, 2012, 10:52 AM), http://www.forbes.com/sites/joshbarro/2012/04/16/romney-is-right-abolish-h‌‌ud/ [http‌s://perma.cc/M5MN-2MYV].

[60]But see Michaels, supra note 34, at 1177, 1181–82 (advocating for a celebration of government’s clunkiness as what “enables businesses to run like businesses” (emphasis omitted)).

[61]Wallace, supra note 56, at 271.

[62]O’Regan & Horn, supra note 4, at 599.

[63]Id.

[64]Id. at 605.

[65]Id. at 598; see Moelis Inst. for Affordable Hous. Policy, supra note 3, at 2 (“The Housing and Economic Recovery Act (HERA) of 2008 required state housing finance agencies to begin reporting tenant incomes and rents to HUD.”).

[66]O’Regan & Horn, supra note 4, at 598.

[67]Id. at 602.

[68]Id. at 602–03; accord Moelis Inst. for Affordable Hous. Policy, supra note 3, at 4.

[69]Moelis Inst. for Affordable Hous. Policy, supra note 3, at 4 (“[A]lmost two-thirds of LIHTC units serve households whose incomes fall well below the maximum permitted income levels.”).

[70]Id. at 3; New Study Reveals Incomes and Rent Burdens of LIHTC Households, Nat’l Low Income Hous. Coalition (July 13, 2012), http://nlihc.org/article/new-study-rev‌e‌a‌l‌s-incomes-and-rent-burdens-lihtc-households [https://perma.cc/T4X2-HCT7].

[71]Schwartz, supra note 3, at 113.

[72]McClure & Johnson, supra note 16, at 7.

[73]O’Regan & Horn, supra note 4, at 604.

[74]See Joint Ctr. for Hous. Studies of Harvard Univ., supra note 38, at 32 (“[T]he private sector is simply unable to provide additional low-cost housing without subsidies. For lowest-income renters, government assistance is the only means to secure housing . . . .”).

[75]Moelis Inst. for Affordable Hous. Policy, supra note 3, at 4.

[76]David A. Weisbach, Tax Expenditures, Principal-Agent Problems, and Redundancy, 84 Wash. U. L. Rev. 1823, 1827 (2006).

[77]Obituary, Stanley S. Surrey, 74; Taxation Law Expert, N.Y. Times (Aug. 28, 1984), http://www.nytimes.com/1984/08/28/obituaries/stanley-s-surrey-74-taxation-la‌w-expert.html [https://perma.cc/3WNF-UJ7V] (quoting Louis Loss, Cromwell Professor Emeritus at Harvard Law School).

[78]Erwin N. Griswold, In Memoriam: Stanley S. Surrey – A True Public Servant, 98 Harv. L. Rev. 329, 331 (1984).

[79]Stanley S. Surrey, Tax Incentives as a Device for Implementing Government Policy: A Comparison with Direct Government Expenditures, 83 Harv. L. Rev. 705, 734 (1970).

[80]See David A. Weisbach & Jacob Nussim, The Integration of Tax and Spending Programs, 113 Yale L.J. 955, 957 (2004) (“[T]he tax expenditure decision . . . is solely a matter of institutional design.”).

[81]Id. at 959.

[82]See Doug Guthrie & Michael McQuarrie, Privatization and Low-Income Housing in the United States Since 1986, in 14 Research in Political Sociology: Politics and the Corporation 15, 32–36 (Harland Prechel ed., 2005) (detailing how key interest groups capitalized on opportunities that expanded community development through the LIHTC).

[83]Joint Ctr. for Hous. Studies of Harvard Univ., The Disruption of the Low-Income Housing Tax Credit Program: Causes, Consequences, Responses, and Proposed Correctives 3 (2009).

[84]See Michael Rubinger, Op-Ed., Two Tax Credits That Work, N.Y. Times (July 13, 2013), http://www.nytimes.com/2013/07/13/opinion/two-tax-credits-that-wo‌rk.html?_r=0 [https://perma.cc/ABS9-S6AQ] (suggesting that the LIHTC’s private-sector incentives “lead to greater accountability and superior project performance when compared with federal grant programs”).

[85]From the 1930s to 1980s, there was a decided shift away from supply-side housing programs; the federal government has not built public housing since 1983. In its place, rental assistance was provided in the form of vouchers. However, in 1986, Congress unexpectedly enacted the LIHTC, transforming the low-income housing industry. See generally Guthrie & McQuarrie, supra note 82, at 26–32 (outlining the political history of the LIHTC).

[86]See Schwartz, supra note 3, at 106 (detailing changes between “the years immediately following the establishment of the credit” and after the credit was made permanent); see also id. at 116 (describing “criticisms [that] were leveled during the first years of the program”).

[87]See Edward Glaeser, How to Make San Francisco’s Housing More Affordable, BloombergView (Dec. 13, 2013, 9:33 AM), http://www.bloom‌bergview.‌com/arti‌cles/2‌013-12-13/how-to-make-san-francisco-s-housing-more-affordable [https://p‌erma.c‌c‌/‌CFK2-JHGS] (“In constrained cities, supply-side policies such as the Low-Income Housing Tax Credits are more likely to make an impact.”).

[88]Deng, supra note 24, at 474.

[89]Joint Ctr. for Hous. Studies of Harvard Univ., supra note 38, at 30.

[90]Schwartz, supra note 3, at 115.

[91]See Ellen & O’Regan, supra note 44, at 114–16; see also Rubinger, supra note 84 (arguing that the LIHTC is partially responsible for the “rebirth” of neighborhoods across the United States).

[92]Schwartz, supra note 43, at 281.

[93]Lan Deng, Assessing Changes in Neighborhoods Hosting the Low-Income Housing Tax Credit Projects 37 (Univ. of Mich. Ctr. for Local, State & Urban Policy, CLOSUP Working Paper Series No. 8, 2009), http://closup.umich.edu/files/closup-wp-8-lihtc.pdf [https://perm‌a.cc/XH3G-N42V].

[94]See Louis Winnick, Place Prosperity vs. People Prosperity: Welfare Considerations in the Geographic Redistribution of Economic Activity, in Essays in Urban Land Economics 273, 273 (1966) (coining the term “place prosperity,” but rejecting place-based policies in favor of people-based programs); see also Nestor M. Davidson, Reconciling People and Place in Housing and Community Development Policy, 16 Geo. J. Poverty L. & Pol’y 1, 1–2, 6–7, 10 (2009) (rejecting the people/place dichotomy, observing that “people-based” vouchers’ emphasis on individual mobility “somewhat ironically elevates the centrality of place,” and concluding that “project-based subsidies can alleviate rather than contribute to concentrated poverty and segregation if new construction and subsidies for the preservation of existing housing focus on a diverse set of communities”).

[95]Ellen & O’Regan, supra note 44, at 117.

[96]Davidson, supra note 94, at 1–2 (noting that “[t]he debate about place-based versus people-based approaches has been etched in the evolution of housing and community development policy since at least the post-War era,” and arguing that “this dichotomy is much more illusory than the traditional debate assumes”).

[97]Ingrid Gould Ellen & Katherine M. O’Regan, How Low Income Neighborhoods Change: Entry, Exit, and Enhancement, 41 Regional Sci. & Urb. Econ. 89, 97 (2011).

[98]See Terra McKinnish, Randall Walsh & T. Kirk White, Who Gentrifies Low-Income Neighborhoods?, 67 J. Urb. Econ. 180, 180–81 (2010) (“[T]he demographic flows associated with the gentrification of urban neighborhoods during the 1990s are not consistent with displacement and harm to minority households.”).

[99]See Edward G. Goetz, New Deal Ruins: Race, Economic Justice, & Public Housing Policy (2013) (analyzing the effects of the dismantlement of public housing); Vale, supra note 12 (detailing examples of cleared public housing).

[100] McClure & Johnson, supra note 16, at 7.

[101] Id.

[102] Id.

[103] Id.

[104] Joint Ctr. for Hous. Studies of Harvard Univ., supra note 38, at 31.

[105] McClure & Johnson, supra note 16, at 8.

[106]See generally Op-Ed, Affordable Housing, Racial Isolation, N.Y. Times (June 29, 2015), http://www.nytimes.com/2015/06/29/opinion/affordable-housing-raci‌al-isolation.html [https://perma.cc/C78V-JDTS] (discussing racially discriminatory aspects of the FHA).

[107]135 S. Ct. 2507, 2525 (2015).

[108]Affirmatively Furthering Fair Housing, 24 C.F.R. §§ 5, 91, 92, 570, 574, 576, 903 (2015).

[109]Anderson, supra note 11, at 20.

[110]Id. at 11. By underwriting all-white suburbs “with the explicit requirement that blacks be excluded from them,” the federal government created racial ghettoization to begin with. See Richard Rothstein, The Supreme Court’s Challenge to Housing Segregation, The American Prospect, July 5, 2015, http://prospect.org/article/supreme-courts-challenge-housing-segregation [https://perma.cc/VLA5-2DDU].

[111]Anderson, supra note 11, at 13.

[112]Schwartz, supra note 43, at 276.

[113]Inclusive Cmtys., 135 S. Ct. at 2514.

[114]Id. at 2525–26.

[115]See Davis & Applebaum, supra note 2.

[116]See Gayle Reaves, The Fight for Fair Housing, Texas Observer (Aug. 4, 2015), https://www.texasobserver.org/texas-lawsuits-affordable-fair-housing-inclusive-com‌munities/ [https://perma.cc/T8TQ-3V9W] (intimating that the LIHTC program is “serving a lot of people before it serves poor people”).

[117]States are allocated both competitive 9% LIHTCs, which are capped, and 4% LIHTCs used together with tax-exempt bonds. See Ingrid Gould Ellen et al., U.S. Dep’t of Hous. and Urban Dev., Office of Policy Dev. and Research, Effects of QAP Incentives on the Location of LIHTC Properties, Multi-Disciplinary Research Team Report (2015).

[118]26 U.S.C. § 42(m)(1)(B)(ii)(I) (2012).

[119]Id. § 42(m)(1)(B)(ii)(III).

[120]Historically, most states simply prioritized QCTs in the QAPs and ignored the requirement of a “concerted community revitalization plan.” See Jill Khadduri, Creating Balance in the Locations of LIHTC Developments: The Role of Qualified Allocation Plans, Poverty & Race Research Action Council 10 (2013).

[121]Ellen, supra note 117 , at 13.

[122]Id. at 12, 13. Only since the Housing and Economic Recovery Act of 2008 have states been able to set their own priorities. See Schwartz, supra note 43, at 279.

[123]Kirk McClure, The Low-Income Housing Tax Credit Program Goes Mainstream and Moves to the Suburbs, 17 Hous. Pol’y Debate 419, 434 (2006).

[124]Id. at 437 tbl. 2.

[125]See Elizabeth Kneebone & Alan Berube, Confronting Suburban Poverty in America (2013).

[126]Brad Plumer, Poverty is Growing Twice as Fast in the Suburbs as in Cities, Wash. Post (May 23, 2013), https://www.washingtonpo‌st.com/news/wo‌nk/wp/201‌3/05/‌23/poverty-is-now-growing-twice-as-fast-in-the-suburbs-as-in-the-city/ [https://perma.cc/6E4B-SZ3L].

[127]The Brookings Inst. Metro. Policy Program, State of Metropolitan America: On The Front Lines of Demographic Transformation 61 (2010).

[128]Myron Orfield, Metropolitics and Fiscal Equity, in The City Reader 338, 341 (Richard T. LeGates & Frederic Stout eds., 2016).

[129]See Thomas B. Edsall, Op-Ed, Where Should a Poor Family Live?, N.Y. Times (Aug. 5, 2015), http://www.nytimes.com/2015/08/05/opinion/where-should-a-poor-family-live.h‌tml [https://perma.cc/RWV8-B5T8].

[130]See Alana Semuels, How Housing Policy is Failing America’s Poor, Atlantic (June 24, 2015) http://www.theatlantic.com/business/archive/2015/06/section-8-is-failing‌/396650/ [ht‌tps://perma.cc/KS8Y-73JE].

[131]McClure, supra note 123, at 439.

[132]26 U.S.C. § 42(m)(1)(B)(ii)(I) (2012).

[133]Id. § 42(m)(1)(B)(ii)(III).

[134]Affirmatively Furthering Fair Housing, 80 Fed. Reg. 42,272, 42,353 (July 16, 2015) (to be codified at 24 C.F.R. § 5.152).

[135] Nestor M. Davidson, Values and Value Creation in Public-Private Transactions, 94 Iowa L. Rev. 937, 943 (2009).

[136] Id.

[137] Jon D. Michaels, Privatization’s Pretensions, 77 U. Chi. L. Rev. 717, 724 (2010).

One Last Word on the Blackstone Principle

In the American legal system, the party that bears the burden of persuasion usually gets the last word. Prosecutors and plaintiffs get final closing statements before their cases go to the jury, appellants are permitted rebuttals during oral argument, movants get to file reply briefs. It thus seems particularly fitting for me to offer just a few more words in light of Joel Johnson’s well-done and thoughtful response[1] to my article, The Consequences of Error in Criminal Justice (“CECJ”).[2] Fitting, that is, both because CECJ implicates questions about evidentiary burdens and, more importantly, because the article itself faces a concededly heavy burden in its attempt to disrupt settled thinking.

In this short reply, I offer some thoughts on Johnson’s arguments, while also addressing two other recent responses to CECJ. While I will use this opportunity to clarify and defend some of my claims, my gaze faces forward, not behind me. I hope to help frame further conversations about the Blackstone principle while also offering a few larger thoughts on criminal justice scholarship. I will focus my attention on three points: First, I will address criticism of CECJ’s core argument about the costs and benefits of the Blackstone principle. Second, I will explore the implications of CECJ’s analysis for rules of criminal procedure. Third, I will discuss the relationship between the Blackstone principle, equality, and political structure in our criminal justice system.

I. The Consequentialist Calculus

CECJ critiqued the “Blackstone principle”—shorthand for a rule about how errors in criminal justice should be distributed. Simply put, the Blackstone principle instructs that in distributing errors in criminal punishment, our justice system should strive to minimize false convictions, even at the expense of creating more false acquittals and more errors overall.[3] As I showed, the traditional arguments for this principle are, at the least, undertheorized and incomplete.[4] As relevant here, CECJ called into question the most common argument for the Blackstone principle: a consequentialist account that justifies the principle on the ground that false convictions are more costly than false acquittals.[5] CECJ argued that this justification is inadequate because it myopically focuses on the costs of errors in individual cases. When it comes to system design, rather than asking whether, and how much, one false conviction is worse than one false acquittal, we must instead ask whether a system that strongly prefers to create false acquittals leads to better consequences, on balance, than a system with no such preference.

CECJ took a first cut at that latter question. It did so by making an imaginative comparison between two systems: one that adhered to the Blackstone principle and one that did not.[6] While recognizing the considerable amount of speculation inherent in that exercise, CECJ tried to show that the costs of following the Blackstone principle might plausibly outweigh the benefits, even focusing solely on the class of people that the principle is supposed to protect: innocent defendants.[7] For example, while the Blackstone principle helps some innocent defendants go free, it may result in harsher punishment for other innocents, given that the probability of conviction and the severity of punishment are substitutes for deterrence purposes.[8]

Here, Johnson enters the fray. Johnson accepts CECJ’s basic approach; he works within a consequentialist framework, and he also agrees that my “dynamic” perspective is the right way to evaluate the Blackstone principle.[9] Where he quarrels with CECJ, however, is on how to conduct the dynamic analysis. He argues that CECJ’s consequentialist accounting was one-sided; that it overstated the extent of the principle’s perverse effects for the innocent, while ignoring or minimizing significant benefits for innocent defendants. Johnson carefully walks through a number of the dynamic effects CECJ identified, and tries to weaken the argument that the Blackstone principle could hurt innocent defendants. He disputes, for example, CECJ’s claims about how various actors in the criminal justice system—police, prosecutors, legislators, and voters—will respond to the Blackstone principle in ways that counteract the principle’s benefits.[10] As Johnson argues, many of the forces CECJ identifies will exist regardless of whether the system is designed to skew errors in favor of false acquittals.[11]

Professors John Bronsteen and Jonathan Masur, in another response to CECJ, offer a critique that is in some ways similar to Johnson’s. Drawing on their extensive research into the social science of happiness and its implications for law and legal theory,[12] they offer additional reasons to think the magnitude of some of the Blackstone principle’s perverse effects may be smaller than CECJ suggests. They argue, for example, that hedonic psychology studies suggest that whether a person is convicted has a much greater impact on his well-being than the length of his sentence.[13] For this reason, they argue that even if CECJ is correct that the Blackstone principle results in more severe punishments for some number of innocent defendants, this cost is likely outweighed by the benefits to other innocents who avoid conviction entirely.[14]

Both Johnson and Bronsteen & Masur offer powerful critiques of CECJ’s argument. To be sure, I could quarrel with each somewhat. While Johnson endorses CECJ’s dynamic approach, he seems unwilling to embrace fully the implications of that perspective. CECJ observed that “if a Blackstonian system produces more crime than a non-Blackstonian system, that will affect the total number of arrests and convictions, and thus the opportunities for errors. So even if the Blackstone principle lowers the rate of false convictions, it could still increase the total number of false convictions.”[15] Yet even though this possibility alone could wipe out the Blackstone principle’s putative benefits, Johnson ignores it.

For their part, Bronsteen and Masur also seem unable to fully escape the pull of the static perspective. Their argument depends on research into the negative effects of conviction and punishment on convicted defendants.[16] Yet one of CECJ’s key points was that the substance and social meaning of criminal convictions are partially constructed by the way in which the system is perceived to create errors. The formerly incarcerated will suffer worse collateral consequences from their convictions in a society where it is believed that the innocent are rarely punished than in a society more willing to acknowledge the risk of false convictions. And so to the extent that Bronsteen and Masur treat the costs of conviction as constants, based on research into how criminal punishment functions in our own, putatively Blackstonian system, they seem to me to be fighting the premise of CECJ’s imaginative exercise.

Ultimately, however, this is mostly quibbling. Both Johnson and Bronsteen and Masur make trenchant—and well taken—criticisms of some of CECJ’s more speculative claims. They offer good reasons to think that CECJ’s dynamic analysis was incomplete and one-sided, and that it did not carry the weighty burden of persuading readers that the Blackstone principle is, on balance, harmful to innocent defendants. Yet I think that CECJ’s key contribution stands nonetheless.

Let me try to recapitulate what I see as CECJ’s core insight. The Blackstone principle is justified by intuitions about individual cases. If any of us were acting as combined judge and jury in a case where serious punishment was on the line, we might strongly prefer—likely for a mix of consequentialist and nonconsequentialist reasons—to err in favor of not punishing. Yet if we are approaching this question not as an individual judge or juror, but instead from the perspective of the system designer, those individual case-based intuitions provide surprisingly little useful guidance. Even if we think that one false conviction is ten times worse than one false acquittal, it does not follow that in each criminal trial we necessarily want jurors to err strongly in favor of letting the guilty go free. Even if protecting the innocent is the sole or paramount value, a Blackstonian system is not inevitably better for the innocent than a non-Blackstonian one. Criminal justice is a complex system with many moving parts, and so to evaluate the costs and benefits of any particular rule, one needs some theory of how that rule will affect the system as a whole. And yet for centuries, criminal justice theorists and judges have extolled the virtues of the Blackstone principle, relying on myopic arguments based on the perspective of the individual case.[17] My hope was to show the inadequacy of this approach.

To be sure, CECJ did try to persuade the reader that the Blackstone principle might hurt the innocent on balance.[18] But my ultimate goal was not to conclusively establish that the Blackstone principle has bad effects—a conclusion that depends on empirical questions that CECJ did not even try to answer. Instead, the goal was only to make it seem plausible that the Blackstone principle’s second-order effects could swamp the benefits of its first-order protections for the innocent. Just raising some doubt about the extent of the principle’s benefits is enough to establish that, in thinking about the justifications for the Blackstone principle, we simply have not been asking the right questions. To the extent that CECJ reads at points as if it was trying to establish conclusively that the Blackstone principle is socially costly, that was a mistake of tone and framing. Simply showing the shortcomings of our old ways of thinking was enough.

In this effort, CECJ was not breaking totally new ground. Professors Lewis Kaplow and Steven Shavell, for example, have noted that scholars evaluating legal rules often fail to account for relevant effects because they take an “ex post perspective” that “focus[es] on particular outcomes.”[19] And Kaplow has shown that across both civil and criminal law, which burden-of-proof rule best advances social welfare turns not on theorizing about the relative costs of errors, but instead on “empirical facts that are likely to be quite difficult to ascertain and that . . . vary by context.”[20] Yet these insights have not been sufficiently internalized in criminal law, where—as CECJ recounted—the simplistic, individual case-based argument about the relative costs of errors prevails as the leading justification for the Blackstone principle.[21] CECJ hoped to show that, given its inattention to systemic effects, this conventional argument cannot carry the weight of the Blackstone principle. And, despite valid criticism by Johnson and Bronsteen & Masur, I believe it succeeded in that goal.

II. Other Justifications and Procedural Rules

If I am right about that last point—if CECJ did show that the most common argument for the Blackstone principle relies on an incomplete perspective—where do we go from there? We should not be ready to immediately abandon the Blackstone principle. There are other potential grounds for the principle, including potential nonconsequentialist justifications even if the traditional costs-of-errors argument is insufficient. Moreover, showing that the leading consequentialist argument for the Blackstone principle rests on questionable empirical assumptions is not the same thing as making a strong consequentialist case against the principle. Given that the burden of proof is usually placed on the person arguing for changing the status quo, we might desire a lot more confidence that the Blackstone principle hurts the innocent before rejecting it.

For these reasons, it would be quite premature for me to advocate any actual changes to our justice system. Two less drastic steps, however, seem advisable. First, we should think more carefully about different kinds of justifications for the Blackstone principle. CECJ analyzed those that have been offered thus far, and found them generally lacking.[22] But it may be that these arguments have not been sufficiently developed simply because the traditional costs-of-errors argument has been bearing so much weight. Second, we should try to clarify some of our thinking about the relationship between the Blackstone principle and particular rules of criminal procedure (which can have both Blackstonian and non-Blackstonian justifications), and try to figure out what the Blackstone principle’s real role in our procedural system is. CECJ took small steps in this direction,[23] but more needs to be done.

Because the intuition underlying the Blackstone principle is so deeply entrenched in our thinking, both of these tasks are surprisingly difficult. On the justification front, the fact that the principle is so universally assumed to be true tends to impede careful and rigorous examination of the arguments for and against it. On the procedural implications, the principle has become so synonymous with defendant-friendly rules (most importantly, the reasonable doubt standard) that commentators often find it hard to disentangle the two.

A response to CECJ by Professor Laura Appleman[24] provides apt examples of both of these problems. First, Appleman shows why serious analyses of the Blackstone principle are so few and far between. In responding to CECJ, Appleman briefly tries to explain the justifications for the Blackstone principle. But she mostly manages to convey only her fervent belief that the principle is so obviously correct that it needs no justification. For example, she accuses CECJ of “gloss[ing] over” the fact that in criminal law “the two parties involved . . . are the accused and the State,”[25] a fact which in Appleman’s view makes all the difference. But this claim is puzzling, because CECJ spent many pages grappling with deontological arguments expressly premised on the special role of the state in criminal punishment.[26] She goes on to stress: “[O]nly in the criminal justice system does conviction result in loss of liberty, privacy, and sometimes life.”[27] Yet as CECJ argued, in a world where punishment is never a binary choice between freedom and death, the severity of criminal sanctions does not require a Blackstonian approach; there is a choice between punishing a smaller number of people harshly or a larger number more leniently.[28] Appleman also objects to CECJ’s “cost-benefit analysis” by asserting that criminal justice is “about the public good.”[29] Yet this is a nonsequitur. Precisely because the criminal justice system is meant to advance the public good, it is critical to evaluate the system in terms of its effects on overall welfare.

Appleman concludes by invoking a biblical command: “Justice, justice, shall you pursue.”[30] Yet, like many others, Appleman is so transfixed by the Blackstone principle that she is unable—or unwilling—to recognize that the very question of what justice requires is a surprisingly difficult one. And this is the very problem that CECJ sought to lay bare. The Blackstone principle may well be a morally necessary element of a system of punishment. But if so, its proponents need to develop more sophisticated arguments to explain why that is the case.[31]

In defending old ways of thinking, Appleman also illustrates the muddled nature of conventional wisdom about the relationship between the Blackstone principle and procedural rules. As CECJ explained, that relationship is complicated; only some pro-defendant procedural rules even purport to be justified by the Blackstone principle, and those may also have good non-Blackstonian justifications.[32] Yet Appleman is uninterested in separating out these distinct conceptual threads. For example, blowing past CECJ’s extensive caveats, she reads the article as a full-throated call for the abolition of any procedural rules favoring defendants.[33] She also repeatedly lumps all pro-defendant rules together, without attending to whether those rules have any connection to the Blackstone principle. For example, she repeatedly refers to Fourth Amendment protections,[34] even though in criminal cases that amendment protects only the guilty, not the innocent (via the exclusionary rule).[35] But if we are to think carefully about the Blackstone principle and its role in our procedural system, we cannot just think about rules in terms of which team—defendants or the government—they help. We need to identify which rules, precisely, the Blackstone principle justifies, try to decide whether those rules have other good justifications, and do our best to figure out if supposedly Blackstonian rules are actually working the way we want them to. None of this is straightforward or easy, but it is necessary if deeper understanding is the goal.

In Appleman’s sharp reaction to CECJ’s arguments, I believe there is something more at work than simply reflexive adherence to conventional wisdom. I believe that those of us who study or work in the criminal justice system on behalf of defendants sometimes suffer from what is best understood as a “siege mentality.”[36] After the high-water mark of the Warren Court’s criminal procedure revolution, recent decades have seen the Supreme Court slowly and continually chipping away at defendants’ rights.[37] At the same time, the law has become harsher and broader, while subjecting more and more people to severe punishment.[38] Seeing all this can have the same effect as living in a real state of siege: Those afflicted are likely to perceive threats and negative intentions where none are present.[39] Thus, an argument for reevaluating a theoretical principle underlying some pro-defendant procedural rules is treated instead as a Trojan horse whose purpose is to eradicate defendants’ remaining, hard-earned procedural protections.

This mentality is, I think, understandable. There is little to praise in the state of our criminal justice system today. And it is hard to dispute that the judiciary has been too deferential to the political branches in criminal cases over recent decades. Nonetheless, this mentality should be resisted. First of all, if the goal of scholarship is to increase our understanding, rather than merely to advocate particular policies, we must be willing to follow ideas to their conclusions, regardless of any distaste for the substantive outcomes to which such inquiry might lead. More importantly, though, even those whose main goal is protecting the rights of defendants should avoid the way of thinking I have described. For reasons I will explain in a moment, the very forces that have led to the siege mentality are themselves reasons why we should be more willing to evaluate ideas and proposals that might initially seem unpalatable.

III. Equality and Political Structure

Let me address one more charge by Appleman: that CECJ “never wrestles with the fundamental flaws of modern criminal justice: that its weight falls most heavily on the most challenged among us — the impoverished, the mentally ill, the poorly educated, those on society’s edge.”[40] As it happens, I see that as the central problem with criminal justice today. I see it as a problem in its own right, but I also see it as a self-reinforcing cause of the problems with criminal justice. That is, criminal law treats the underprivileged badly—and precisely because those that the law treats badly are underprivileged is why these problems are so difficult to fix within the political process.

This claim should not be particularly controversial. As CECJ notes, it is essentially the consensus view among criminal law and procedure scholars.[41] From Professor John Hart Ely on, the conventional prescription for this problem has been to argue that courts must fill the void. If the political process cannot sufficiently protect defendants’ interests, it falls to judges to do so.

The problem with this argument, however, is that courts are themselves influenced by the same political defects that justify judicial involvement in the first place. As Professors Eric Posner and Adrian Vermeule put it: “[J]udges do not stand outside the system; judicial behavior is an endogenous product of the system.”[42] Although Supreme Court Justices serve for life and do not stand for election, they are appointed by an elected President and confirmed by an elected Senate. For that reason, there is little reason to hope that they can form a permanent bulwark against a rising political tide. To be sure, under the right circumstances you can get the Warren Court—for a while. Over time, however, the political forces conspiring against defendants will shape the composition of the judiciary; Supreme Court Justices will look less like William Brennan and more like Samuel Alito, and defendants’ rights will diminish accordingly. And indeed, as I suggested above in discussing the siege mentality phenomenon, I believe this is exactly what has happened in our system over recent decades.

If courts cannot be relied upon to consistently counteract political defects plaguing criminal justice, what can be done? There is an alternative. What if structural changes to the system could counteract those political defects? Political forces do not exist in a vacuum; they are shaped by the governmental and social structures in which they operate. And so it seems possible that different structural arrangements might ameliorate—or exacerbate, as the case may be—some of the political problems that cause our system to treat criminal defendants poorly.

To be sure, this strategy is not immune to the inside/outside critique leveled above against the idea that the judiciary will serve as defendants’ protector. Structural changes require assent of political actors; won’t the same political pathologies we are seeking to correct simply prevent structural fixes from being adopted in the first place? But I think there is a story one can tell in which structural changes are a more viable and durable strategy than relying on courts. It is plausible that there may be certain moments when tough-on-crime passions temporarily cool, making positive reform possible. If such reforms were actually effective at reshaping political forces, and so long as they were entrenched in some way, either formally or functionally,[43] they could solve the political problems in criminal justice going forward. Relying on courts to protect defendants, by contrast, demands constant judicial supervision. This creates the risk that when support for reform recedes, and as the composition of the judiciary changes, victories for defendants will fade away.

There are many plausible structural changes to our system that might improve the politics of criminal justice. Ending felon disenfranchisement is a good example of such a strategy that many would support; if it is a problem that voters do not sufficiently identify with criminal defendants, removing the voters who have experienced criminal punishment from the electorate can only be making the problem worse. But there are many other possible reforms. One potentially radical strategy—and this is where my own work comes in—is to try to change the system to better expose politically powerful groups to the downsides of criminal punishment. If, as the conventional story tells us, a problem with the politics of criminal justice is that ordinary voters just cannot imagine being arrested or going to prison, perhaps our system might be more just if it threatened criminal sanctions more broadly. Oddly, increasing the apparent severity of the system could actually make it more lenient in practice.

And this is where CECJ, in trying to imagine a world without the Blackstone principle, was coming from. Again, it is agreed that part of the political problem with our system is that ordinary voters do not commit crimes and thus do not anticipate being on the receiving end of criminal sanctions, and also lack sympathy for those who are punished.[44] If so, it seems to follow that changing the perception of whether the system convicts innocent people could affect the politics of criminal justice. A typical voting citizen may feel especially comfortable ignoring the interests of defendants in a system where it is thought that innocents are essentially never punished; that same citizen might feel differently, both as a matter of self-interest and of sympathy, in a world where the risk of false convictions was more widely acknowledged. Or so CECJ argued.[45]

Appleman disagrees; she claims that abandoning the Blackstone principle, rather than ameliorating any political defects, would actually impose an “extra burden on those already marginalized by our communities.”[46] Unfortunately, Appleman has not provided a substantial argument to support this assertion. But as luck would have it, Johnson has: One of his Note’s central arguments is that eradicating the Blackstone principle would reinforce, rather than eradicate, the inequities that plague our justice system.[47] This challenge demands a response.

Johnson’s argument is that in a non-Blackstonian world, the prosecution would bring more cases overall, thus leading to more cases on the border between legal guilt and innocence.[48] This change, he argues, would make poorer defendants worse off relative to wealthier ones. The former group is represented by overtaxed public defenders who can scarcely work any harder, whereas the latter can afford private counsel whose quality would not decline even if the number of borderline cases throughout the system increased.[49] The result, Johnson argues, is that poor defendants would receive even worse representation, relative to wealthy defendants, than they do today—exacerbating the advantages enjoyed by the rich and powerful in criminal justice.

I think Johnson raises a valid concern, but I am not yet convinced. I think Johnson errs by focusing simply on litigated cases at the borderline. Just as important in the comparative exercise, I think, is considering the number of cases that are never brought at all in a Blackstonian world simply because the prosecutor thinks they would be too difficult to prove. In a world (a) with a demanding standard of proof and (b) where defendants’ ability to contest charges varies with the quality of counsel they can afford, it is eminently plausible that prosecutors decline to bring otherwise winnable cases when they know that defendants will be represented by top-flight private counsel. Put another way, it is plausible that defendants who can afford high-quality counsel receive a de facto heightened charging standard not enjoyed by the bulk of defendants who rely on appointed counsel or public defenders.[50]

If that is right, then it seems plausible that even if, say, lowering the burden of proof at trial increased the number of borderline cases, it could also have the effect of exposing some wealthy defendants who otherwise would have escaped. It would, however, also have the effect of subjecting some poorer defendants to charges they would have avoided. And so it seems to me that whether this reform helps or hurts the equality problem is an empirical question that turns on which effect predominates: Would the number of new charges brought against wealthy defendants outweigh the number of new prosecutions against less wealthy defendants? And even if so, would that effect trump the borderline-case problem that Johnson identifies? It is not clear. But even if Johnson has not convinced me that abandoning the Blackstone principle would make our system’s inequalities worse, he has convinced me that I (and others) need to spend more time thinking about the principle’s distributive effects among the pool of potential criminal defendants.

For these reasons, I am nowhere near confident that abandoning our system’s professed commitment to the Blackstone principle would have ameliorative effects on the political process, or that any benefits would be large enough to outweigh the costs of that change. I am confident, however, that we need to at least be willing to consider arguments like this one. The last few decades should have taught us that we cannot count on courts to reliably protect defendants and to keep the system’s punitive impulses from spiraling out of control. We must keep our minds open to alternative solutions to our system’s many problems—even solutions as seemingly off-the-wall as those CECJ offered.

Conclusion

I began by noting that I could not resist offering one final word—a closing statement—about the Blackstone principle. Of course, given the principle’s historical pedigree and the powerful place it holds in our collective intuitions, it would be foolish to imagine that I—or anyone—could ever have the last word about the Blackstone principle. Instead, the best one can hope for is to offer something new to a conversation that has been going on for as long as criminal punishment has existed, and one that will no doubt continue long after the current participants have departed the scene. I am glad to have been able to contribute to that conversation, and I am grateful to Johnson, Appleman, and Bronsteen & Masur for adding their voices after mine.

[1]Joel S. Johnson, Note, Benefits of Error in Criminal Justice, 102 Va. L. Rev. 237 (2016).

[2]Daniel Epps, The Consequences of Error in Criminal Justice, 128 Harv. L. Rev. 1065 (2015).

[3]Id. at 1068–69.

[4]See id. at 1087–1140.

[5]See id. at 1087–1124.

[6]See id. at 1094.

[7]See id. at 1110–24.

[8]See id. at 1110–13.

[9]See Johnson, supra note 1, at 246–47.

[10]See id. at 252–75.

[11]See id. at 253, 259, 265–67.

[12]See generally John Bronsteen et al., Happiness and the Law 3–6 (2015) (discussing how the science of happiness can affect the law).

[13]See John Bronsteen & Jonathan S. Masur, The Overlooked Benefits of the Blackstone Principle, 128 Harv. L. Rev. F. 289, 292 (2015).

[14]See id. at 293.

[15]See Epps, supra note 2, at 1112–13.

[16]See Bronsteen & Masur, supra note 13, at 292–93.

[17]See Epps, supra note 2, at 1077–81, 1088–89.

[18]See id. at 1112–24.

[19]Louis Kaplow & Steven Shavell, Fairness Versus Welfare 48–49 (2002).

[20]Louis Kaplow, Burden of Proof, 121 Yale L.J. 738, 763, 771 (2012).

[21]See Epps, supra note 2, at 1088–89.

[22]See id. at 1131–42.

[23]See id. at 1143–48.

[24]Laura I. Appleman, A Tragedy of Errors: Blackstone, Procedural Asymmetry, and Criminal Justice, 128 Harv. L. Rev. F. 91 (2015).

[25]Id. at 95.

[26]See Epps, supra note 2, at 1131–40.

[27]Appleman, supra note 24, at 96.

[28]See Epps, supra note 2, at 1084–85. Moreover, as Kaplow notes, the severity of criminal sanctions “make erroneous acquittals more troublesome as well; note that multiplying the consequences on both sides of a balance by a common factor has no effect on which way the scale tips.” Kaplow, supra note 20, at 744.

[29]Appleman, supra note 24, at 95.

[30]Id. at 98 (quoting Deuteronomy 16:20) (internal quotation marks omitted).

[31]Indeed, that effort is already underway. See generally Alec Walen, Proof Beyond a Reasonable Doubt: A Balanced Retributive Account, 76 La. L. Rev. 355 (2015) (offering a careful and insightful retributivist defense of a high burden of proof in criminal punishment and engaging closely with CECJ’s arguments).

[32]See Epps, supra note 2, at 1144–47.

[33]See Appleman, supra note 24, at 97 (reading CECJ as “seeking to remove some of the protections currently afforded to the defendant, whether ascribable to the Blackstone principle or not”).

[34]See id. at 91, 94, 95.

[35]See Epps, supra note 2, at 1073.

[36]For a definition of this phenomenon, see Daniel Bar-Tal, Siege Mentality, in 3 The Encyclopedia of Peace Psychology 996, 996–97 (Daniel J. Christie ed., 2012).

[37]For a discussion of how the Burger and Rehnquist Courts subtly eroded the Warren Court’s landmark criminal procedure rulings, see Carol S. Steiker, Counter-Revolution in Constitutional Criminal Procedure? Two Audiences, Two Answers, 94 Mich. L. Rev. 2466 (1996).

[38]See William J. Stuntz, The Collapse of American Criminal Justice 251–67 (2011).

[39]See Bar-Tal, supra note 36, at 997.

[40]Appleman, supra note 24, at 97.

[41]See Epps, supra note 2, at 1115–17.

[42]Eric A. Posner & Adrian Vermeule, Inside or Outside the System?, 80 U. Chi. L. Rev. 1743, 1764 (2013).

[43]For a fascinating analysis of methods for informal, functional entrenchment mechanisms, see Daryl Levinson & Benjamin I. Sachs, Political Entrenchment and Public Law, 125 Yale L.J. 400 (2015).

[44]See Epps, supra note 2, at 1102–06.

[45]See id. at 1115–21.

[46]Appleman, supra note 24, at 97.

[47]See Johnson, supra note 1, at 275–82.

[48]See id. at 278–79.

[49]See id. at 279.

[50]For a fascinating analysis of charging standards, see William Ortman, Probable Cause Revisited, 68 Stan. L. Rev. 511 (2016).

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