The Costs of 'Tenancy In Common': Evidence from Indian Land Allotment

Abstract

"From 1906, the U.S. government’s ‘Indian allotment’ policy re-assigned property rights over tribe-owned lands to individual Native American households in 160-acre parcels. Allotted land was initially kept in ’individual trust’, to later be transferred into ‘fee simple,’ thereby giving full property rights. In 1934, this program was shut down prematurely, trapping millions of acres of land in trust status indefinitely. The descendants of the original allottees of in-trust land have rights to rents earned from the land, but have to agree near-unanimously to any changes in its use, or to its sale. They are exogenously, and almost unalterably, locked into ‘tenancy in common’. We utilize exogenous variation in the legal status of individual 160-acre land parcels to estimate the inefficiencies arising from this tenancy form, using present-day satellite imagery."