A Parable on Property Rights

Imagine you have just purchased a two-bedroom condo in New York City. You had saved money for 10 years to buy it. It is conveniently located, has a beautiful view and you plan to turn one of the bedrooms into a home office for your consulting business. You paid $300,000 for the condo, but you are thrilled to have it.

After signing the check for the down payment, you are all set to move in your furniture, computer and personal effects. You hear a knock at the door. Two armed agents from the U.S. Fish and Wildlife Service want to talk to you about your condo and your plans to run a consulting business from that second bedroom. You see, your condo has been designated as critical habitat for the endangered Manhattan cockroach.

The Manhattan cockroach once roamed freely all over the island of Manhattan, but human activities like the construction of high-rise condominiums, subways, roads and X-rated movie theaters have reduced the habitat of the cockroach by more than 98.5%. Their numbers have fallen drastically, according to a study done by a New York University graduate student in his apartment just off Times Square. Last August, he discovered 20 roaches in a three-hour period. This year he could locate only 10. From these data, he recommended that the roach be listed as an endangered species based on a 50% reduction in its population. Since no one submitted contrary claims to the Fish and Wildlife Service, it used this “best available data” and made the listing.

As a result, the agency’s agents say that your second bedroom must be set aside for the cockroach. You are not allowed to put any furniture, clothes or computer equipment in that room. You may not vacuum the floor in that room, as doing so might eliminate the roach’s food supply. If you enter the room, you must be careful not to step on, harass or intimidate any roaches that you might see. Turning on the light suddenly, for instance, frightens the roach. If you do any of these things, it will be considered an unauthorized “taking” of the roach and you will be prosecuted to the full extent of the law: a year in prison and a $100,000 fine for each harassed roach.

In addition to setting aside your second bedroom for the roach, you must allow for a “migration corridor” through your kitchen so that the roach may move from one habitat (your bedroom) to its next nearest habitat (the bedroom of the family next door). The agents inform you that the family next door used a vacuum cleaner in the roach’s habitat, accidentally sucking up five roaches. The agency brought charges, and when the family fought prosecution, the government subpoenaed their tax returns, immigration records and car rental receipts to see if they were good citizens. The family soon complied with all the provisions of the Endangered Species Act.

Being a good citizen, you agree to the conditions. Weeks pass, and you notice that the roaches are not content to remain in their habitat or in their migration corridor, but tend to get up into your grocery shelves. The smell from the second bedroom is getting pretty bad. Since you cannot operate your business from home, you rent office space. But the prices are so high, you soon have to give it up.

You decide that your condo is not worth the trouble and put it back on the market. But you discover that since your property was declared a critical habitat for the Manhattan cockroach, no one wants to live there. The best available offer is $25,000 from the Save the Cockroach Assn. of Manhattan. SCAM is a nonprofit organization that buys up cockroach habitats. It bought your next-door neighbor’s condo for $25,000 and sold it to the federal government the next day for the original pre-habitat price of $300,000.

You find this a bit on the unethical side, but just before you take the $275,000 loss, your upstairs neighbor’s water bed bursts and floods your condo, completely annihilating the population of roaches. Believing it to be a sign from heaven, you start mopping up in order to begin your life anew when you hear a knock at the door. There you find two armed agents of the U.S. Army Corps of Engineers. Your condo has just been designated a wetland.

Sound farfetched? Law-abiding, tax-paying residents of the Western states have actually been subjected to every kind of government abuse described here. Countless property owners and their families have had their lives and livelihoods ruined by endangered flies, beetles, rats and shellfish. But not cockroaches--not yet.