Though property rights were undermined by the Supreme Court
10 years ago, the struggle against excessive use of eminent domain continues. By SCOTT
BULLOCK NICK SIBILLA Updated July 3, 2015, Barrons
Ten years ago last month, the U.S. Supreme Court issued its
notorious Kelo v. New London decision. Ruling against Susette Kelo and six
other homeowners, the court upheld a plan by New London, Conn., to use the
power of eminent domain, not for a public use, like a courthouse or a bridge,
but to build a private development project. The court said the government could
legally seize ordinary Americans’ homes and businesses and hand them over to
politically connected private interests.
In Kelo’s aftermath, thousands of Americans were uprooted,
with victims more likely to be black, Hispanic, elderly, or poor. Far beyond
New London, the Supreme Court’s outrageous decision empowered municipal
officials to abuse eminent domain.
In the first year after Kelo, the Institute for Justice,
which represented the New London homeowners, found that “local governments
threatened eminent domain or condemned at least 5,783 homes, businesses,
churches, and other properties so that they could be transferred to another
private party.” Most Americans were surprised that the court could
rubber-stamp such a blatant land grab. Determined to channel that outrage into
real, sweeping change, the Institute for Justice launched an ambitious
litigation, public-affairs, and lobbying campaign.
In the decade since the Kelo case, 47 states have enacted
legislative reforms or issued court decisions to protect property owners from
eminent-domain abuse. Working with activists nationwide, IJ has saved more than
16,000 homes, businesses, places of worship, and other properties from
demolition.
Slow Progress
More needs to be done. Loopholes mar nearly half of the
state-reform statutes. Most commonly, local governments can declare well-tended
homes and businesses blighted, and then seize them with eminent domain.
Bogus blight designations threaten homeowners like
Charlesetta Taylor. For over 70 years, Taylor has lived in the same three-story
red brick house in St. Louis. When her family first moved to the neighborhood
in 1945, she says, “We were the first African-American family I know on this
block.” Today, after housing three generations of her family, Taylor, now 79,
lives alone. Yet, St. Louis will not let this woman live in peace. Earlier this
year, the city declared Taylor’s home and almost 50 other residences blighted,
using vague criteria like obsolete platting and inadequate street layout. St.
Louis thus gave itself authority to use eminent domain to seize those homes, in
the hopes of luring a new federal intelligence-agency campus.
Nearly 100,000 people have signed a petition to support
Taylor and her neighbors; news reports say the agency is considering three
other sites that wouldn’t involve having to bulldoze occupied homes and
relocate families.
In Charlestown, Ind., a town with fewer than 8,000
residents, the mayor proposed a plan to demolish 354 homes. Under the guise of
eliminating blight, hundreds of people would have been dispossessed. Last
December, the city council rejected the proposal, thwarting what would have
been one of the largest land grabs in the nation.
Disproportionate Effect
Before the Supreme Court issued the Kelo decision, the AARP,
NAACP, and the Southern Christian Leadership Conference filed a prescient
amicus brief. These organizations documented how eminent domain for private
development “disproportionately harms racial and ethnic minorities, the
elderly, and the economically underprivileged.” They asserted that
“condemnations in predominantly minority or elderly neighborhoods are often
easier to accomplish because these groups are less likely, or often unable, to
contest the action.”
In 2007, the Institute for Justice examined nearly 200 areas
targeted by eminent domain for private development projects in 26 states and
Washington, D.C. After compiling census data, IJ found that these project areas
had greater proportions of minority residents, more renters, more people living
below the poverty line, and a greater proportion of residents with less than a
high school education.
Developers, land-use planners, and bureaucrats often dismiss
concerns about eminent domain’s disproportionate impact on minorities and the
working class. Instead, many developers say seizing private property for a
private redevelopment project would create new jobs and boost tax revenue.
In the Kelo case, the Supreme Court upheld the condemnations
for precisely those reasons. Last October, academics at the Mercatus
Center at George Mason University analyzed private-to-private takings before
and after the Kelo decision, as well as the level and growth of local and state
tax revenue. Contrary to the claims of developers, the Mercatus study found
“virtually no evidence of a positive relationship between eminent-domain
activity and the level of state and local tax revenue.”
In 2008, the Institute for Justice examined economic trends
in states that reformed their eminent-domain laws and “found no significant
changes in trends in construction jobs, building permits, and property-tax
revenues as a result of eminent-domain reform.” Protecting property rights had
“no ill economic effect.”
Unchecked Government
Promises of redevelopment are often wildly exaggerated. New
London spent $84 million in local, state, and federal subsidies on its
redevelopment project to complement a Pfizer pharmaceutical-research center,
which had received tax subsidies. As soon as those tax breaks expired, Pfizer
pulled out, torpedoing New London’s grandiose plans. Instead of an “urban
village” for well-heeled Pfizer employees, feral cats prowl empty, overgrown
fields.
Taking homes and businesses to jump-start the economy can
backfire. Kelo stands as a testament to the dangers of unchecked government. As
Justice Sandra Day O’Connor eloquently warned in her dissent, “The specter of
condemnation hangs over all property. Nothing is to prevent the state from
replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or
any farm with a factory.” But the case also demonstrates how citizens can stand
up for their rights and foster meaningful change.
Source: Barrons, SCOTT BULLOCK and NICK SIBILLA work at the
Institute for Justice. A Blighted Decade: Whose Domain Is It, Anyway?
online.barrons.com
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