No For Sale Signs Allowed
In the midst of the worst housing market in modern memory and more than thirty years after the Supreme Court’s ruling in Linmark, there is suburb of Chicago in which For Sale signs are nowhere to be found. This is the first of several posts exploring why. The story, which I am still unpacking, reveals much about what happens when government fails to formally repeal unconstitutional laws and about how community norms can trump Supreme Court precedent.
The single most important (although not the most interesting) element in the story is the following ordinance, which bans most for sale and for rent signs and was adopted in an effort to prevent white flight:
REAL ESTATE FOR RENT AND FOR SALE SIGNS PROHIBITED:
The President and Board of Trustees find as follows:
A. That a prohibition of “For Sale” and “Sold” signs has been recommended by the Commission on Community Relations on the basis that said signs tend to encourage unfair housing practices and tend to defeat the purposes of the Village’s Human Rights Program.
B. That a prohibition of “For Rent” signs has been recommended by the Commission on Community Relations for the following reasons:
1. “For Rent” signs presently are used more frequently in areas that have a greater percentage of occupancy of minority residents. “For Rent” signs are seldom used in connection with buildings that have no minority occupants. The use of these signs therefore tends to “signal” that minorities may be more welcome in some areas of the Village than others and this tends to segregate areas contrary to the policy of the Village to maintain an integrated community.
2. A proliferation of “For Rent” signs encourages panic peddling and block busting.
3. “For Rent” signs may give an appearance of community instability when concentrated in a limited geographic area.
4. A proliferation of “For Rent” signs may infer that an area is less desirable than other areas.
5. A system of apartment management that refers tenants to the source of rentals will encourage greater professionalism in apartment management.
It shall, therefore, be unlawful for any person to construct, place, maintain or install a “For Sale”, “Sold” or “For Rent” sign on any property developed for residential use in the Village. The term “For Sale” sign shall include signs carrying the following or similar words: “Open House” or “Open for Inspection” and shall include any other devices placed on the property to indicate that the property is for sale.
In the case of new construction of residential property or conversion of an existing structure to condominium use where a condominium declaration is recorded, a “For Sale” sign shall be permitted on the property until the property or condominium units are sold, but not to exceed one and a half (1 1/2) years after issuance of a certificate of occupancy for a new building or from the date the “For Sale” sign is posted in the case of a conversion.
In part of the ordinance not reproduced here, the Village allows Open House signs to be displayed for a period of time on Sundays.
In Linmark Associates, Inc. v. Willingboro, 431 U.S. 85 (1977), the Court struck down a similar ordinance. Like the ordinance reproduced above, Willingboro’s law was aimed at maintaining stable, integrated neighborhoods by prohibiting homeowners from placing For Sale or Sold signs on the lawns. While the Court acknowledged the importance of Willingboro’s goal, it nonetheless held that the ordinance unconstitutionally interfered with freedom of speech. Nothing distinguishes the Village’s ordinance from the one in Linmark and all academic and legal commentary I’ve found on the Village’s ordinance agree that it is plainly unconstitutional.
This is what I had always assumed was the explanation why, despite Linmark, the Village has no For Sale signs: Most residents assume that ordinances in the local statutory code are good law; that is, they perceive themselves as being legally prohibited from using a For Sale sign. Those residents who are familiar with First Amendment law are nonetheless deterred from using a sign because (1) there is a residual risk that the Village will try to enforce the ordinance; and (2) there is reason to worry about sending a market signal of “desperation” if you are the sole seller using a sign. As for real estate agents, most know that the ordinance is unconstitutional but they have incentives to comply with it nonetheless. The perceived inability to put a For Sale sign in one’s yard makes it extraordinarily difficult to sell by owner; without the ability to put up a sign, sellers need access to the multiple listing service to make large number of buyers aware that a house is available. Furthermore, as repeat players in the Village, real estate agents may be reluctant to do anything that the Village will view with displeasure. All of these factors worked together, I thought, to chill For Sale commercial speech within the Village.
As I have begun to ask more questions, I am learning that while my initial assumptions were not exactly wrong, they are far less nuanced than what is necessary to fully describe why a de facto ban on for sale signs persists. More on this in later posts.