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Property’s transformative nature: Space mining, Airbnb, and Apartheid

For the last few years, a new, innovative business model has been on the rise. It is called ‘space mining’ – digging for valuable resources in asteroids and other minor planets in outer space. Big companies with exotic names, like Space X by Elon Musk, or Jeff Bezos’s Blue Origin, pump billions into this future industry. These space miners go for profit; extracting extraterrestrial resources and selling them for big money to the people on Earth. On planet Earth, we have a system for the safeguarding and transfer of value: property law. But property law does not operate beyond national borders, let alone in a different atmosphere. For space mining, a pragmatic solution to the problem was found: we copy-pasted our property law system. Three years have already passed since the U.S. and Luxembourg took the lead in setting up such a system by unilaterally drafting new legislation: companies established in these two countries are indeed now granted property rights over the resources they find in outer space.

The case of property rights over outer space resources is a clear example of property’s transformative nature. The institution of property rights transforms the value of objects in outer space– quite directly. Rocks, stones, and metals without economic value immediately become valuable in the hands of property. And this also works the other way around: If no property system is in place, companies will not go to the moon and beyond to obtain those resources. An effort like this demands an incentive, in the form of safe, transferable property rights. Property can be such an incentive.

A somewhat less Sci-Fi – but nevertheless globally interesting – example of property’s transformative nature can be seen in the effect of Airbnb on cities and neighborhoods around the world. The low-threshold platform of Airbnb enables private homeowners to turn their home into a hotel every now and then in order to make a nice penny. Although these homeowners have made use of their right to rent their property, a right which in most legal systems will be covered by the right of ownership, it has quickly become clear that this novel use of old property rights has literally transformed complete neighborhoods – even cities. Backed by the claim that uncontrolled letting via Airbnb significantly reduces the quality of neighborhood life, decreases available housing, and drives up house prices, new forms of creative and ad hoc regulation are being established to limit these spillover effects.

Airbnb symbolizes how property shapes its social environment and is capable of quickly producing serious effects for the outside world. Around the globe, municipalities and governments have reacted in similar ways. By regulating and limiting the right to property they have given teeth to the strong intuition that owners need to take their environment into account whilst exercising their property rights. Because property comes not only with authority, but also responsibility.

But the most bitter and devastating example of the transformative effects of property law can be found in the former South African Apartheid-regime. The property system of South Africa during Apartheid was fragmented: black people’s land rights were weak and insecure in comparison to the strong and well-embedded civil ownership rights of white people. This made it impossible for black people to acquire and exercise land-use rights, resulting in the now well-known distinction between the haves and the have-nots that is still being fiercely debated in that country today.

As the late professor André van der Walt magnificently stated two decades ago, these effects were only partly attributable to the South African racist state policies of the time. Also to blame was the ’absolutist conception’ of property and the hierarchy of rights that comes with it – ownership at the top and lesser rights below. This property system has become a catalyst for grave injustices, transforming equal human beings into people with and without power, with and without dignity. Property can also be very unfair.

Transformative property law

As we have seen, property law transforms in many ways. It incentivizes, it assigns responsibility, it distributes. How to deal with an institution with so many faces; an institution that is the backbone of, and fully integrated into, private legal systems all over the world? The first step would be to unravel the transformation, to disclose the role property currently plays in shaping societies. Although property law still unyieldingly operates mainly within national borders, its effects are, as we have seen, apparent in both national and international contexts.

But, as my colleagues have already emphasized in their earlier blog posts, this is not where the mission of transformative private law stops – it’s only halfway there. If private law – and property law specifically – changes its environment so greatly, its environment should determine the acceptability of these changes . And if they are not acceptable, consideration should be given as to how the changes can be streamlined – indeed, transforming the transformation –  all while maintaining private law’s objectives of safeguarding people’s autonomy, opportunity, and freedom. This is not an easy task. Luckily, the intellectual pursuit that transformative property law entails does not have to be built from scratch. It already exists, its foundations having being laid by the late professor referred to above. I am in the exciting – albeit comfortable – position of further fueling this scholarly debate. Therefore, I warmly welcome contributions for blogs on property, whether critical, or supportive, of the transformative mission. Let’s talk about ownership models for people and companies, sustainable property law, economic property theory, commons, extraterrestrial private law, and social obligations.

One last semantic note on ‘property’

When viewed among the other categories on our blog, like ‘sustainability’, ‘finance’ and ‘digitalization’, the category of ‘property’ might appear the odd one out. Is taking a centuries-old, dogmatic, and traditional label not contradictory to our transformative focus? Even while brainstorming the initial set-up of the Transformative Private Law blog, concerns were expressed that property might be an outdated label; a categorization that we should get rid of, so that we can really move on. Perhaps this is correct. Yet in spite of its dogmatic and old-fashioned connotations, property is also recognizable, and therefore unifying. Property scholars from different corners understand this notion, whether or not they find it to be a satisfying term. Also, isn’t it intrinsic to the journey of the Transformative Private Law Blog that we try to expose and probe the depths of our own name? That we are defining and redefining, and that we accept a notion’s ambiguity in order to make room for wherever the debate will take us? In this spirit, let us bring the notion of property on board, and see where the voyage will take us.

(Photo: Mathew Schwartz)