Force Majeure – The Little Clause That Could

[The following is a guest post from Molly Madonia, Law ’16, a prior guest alumni contributor to the Blog.]

What do the great Beyoncé Knowles and force majeure clauses have in common? They both demand that we put some respect on their check.

Force majeure clauses in transactional agreements have often been used arbitrarily, perhaps as a legalese-y afterthought, as an easy exit from the contract, or even added merely to shift the signature blocks onto the proceeding page. However, in the time of an international pandemic, unpredictable supply chain, and abundant contractual frustration of purpose, force majeure clauses are finally getting their time to shine. Now, these often-tertiary little provisions are single-handedly keeping businesses afloat, keeping creditors at bay, and punching well-above their weight class across all types of contracts.

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Enforcing Environmental Laws During The Pandemic

According to basic economic theory, regulated entities will comply with the environmental laws when the expected benefits of doing so (most The Environmental Protection Agency logoprominently, avoiding penalties) outweigh the expected costs of compliance. Theoretically, economists say, there is an optimum level of enforcement where expected sanctions equal expected harm, taking into account the probability that violations will be detected.

Yet the actual level of enforcement of the environmental laws is never optimal, even at the best of times. Enforcement agencies such as the United States Environmental Protection Agency (EPA) and its state counterparts like the Wisconsin Department of Natural Resources (DNR) have imperfect information about ongoing violations. They are not omniscient. And even if they had perfect information, there are often many more potential enforcement targets than can be pursued with limited agency resources. Enforcement, of course, is part of a broad mix of agency responsibilities that also includes rulemaking, standard setting, monitoring, and many other activities. Finally, political leaders may appoint agency heads who drive the pursuit of more or less than the optimal enforcement level.

Enter the pandemic. It adds a new layer of complexity, to understate the matter, in that enforcement agencies must take several new and highly important factors into account, such as the safety of agency personnel and the economic damage some regulated entities are experiencing. Staff who might normally be inspecting permitted facilities or investigating reported violations may be sick, quarantined, or at the very least, working from home. These factors have led some agencies to relax enforcement activities, as discussed in more detail below. Even if they are presumed to be well-meaning, such policies may worsen the situation in communities already disadvantaged by pollution levels that seriously impact public health. In turn, this may expose those communities to additional risks during or following the pandemic.

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Milwaukee’s 2020 Property Assessments take their largest jump since 2006

The 2020 total value of Milwaukee’s tax base is $31.4 billion, up $2.2 billion from 2019, but still $4.1 billion less than the peak in 2007. The city’s total assessment grew 7.6% from 2019 to 2020. This is the largest year-over-year increase since 2005-2006.

Unless stated otherwise, all values in this post are adjusted for inflation to current (2020) values using the Consumer Price Index.

In unadjusted (“nominal”) dollars, the city’s total 2020 valuation exceeded its 2008 peak for the first time. Homeowners who bought their properties near the top of the pre-Recession market will be glad to see their home values approach the sale price, but apart from this the nominal dollar comparison has little value.

line graph of Milwaukee's total assessed property tax base

By law, the assessments released in April 2020 are intended to reflect the value of the property on January 1, 2020, so they do not take into consideration the current economic turmoil facing the entire nation. As research from the Public Policy Forum has shown, municipalities in Wisconsin are disproportionately dependent on property taxes compared to local governments in other states. Usually this lack of a diversified income stream is a bad thing, but in this case it may shelter municipalities from even worse fiscal fallout for at least another year.

The residential picture

The average residential property assessment in 2020 was $115,700. The median home’s assessment grew 9.9% from 2019 to 2020, or $9,800. Home valuations increased for 82% of homes and decreased for 12%.

Among neighborhoods with at least 200 homes, values grew the most in Brewer’s Hill ($46,000 on average). Murray Hill, on the other side of the Milwaukee River, saw the largest decline ($9,000). Other neighborhoods with large increases include Harambee, Mount Mary, Maple Tree, and Riverwest. In addition to Murray Hill, property values declined in Riverside Park, Uptown, Clock Tower Acres, Granville Station, Washington Park, and Sherman Park.

There are a handful of neighborhoods where property values in 2020 are higher than in 2007. They include neighborhoods near the Lake such as Bay View, Fernwood, Harbor View, the Historic Third Ward, and Yankee Hill; the two near-north side neighborhoods of Triangle and Triangle North; and a cluster of far-northwest side developments near Dretzka Park.

These neighborhoods are by far the exception to the general trend. As of 2020, the median home in Milwaukee is assessed at 73% of it’s value in 2007–an average decline of $42,000.

Maps of property value changes by block

Click here for an interactive table showing the median values of residential properties in each Milwaukee neighborhood for the years 2000, 2007, 2019, and 2020.

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