SCOTUS Debates Land Grab Legality

Those of us who vehemently oppose The Crony State™, will be watching with great interest today when the Supremes hear Kelo vs. New London. From an AP story at Yahoo News:

Residents trying to hang onto their homes in a working class neighborhood of New London, Conn., are waging a battle in the Supreme Court over their city government's attempt to seize property for private economic development.

Susette Kelo and several other homeowners filed a lawsuit after city officials announced plans to bulldoze their residences to clear the way for a riverfront hotel, health club and offices. The residents refused to move, arguing it was an unconstitutional taking of their property.

The case's outcome will have significant implications for so-called eminent domain actions.

There have been over 10,000 instances in recent years of private property being threatened with condemnation or actually condemned by government for private use, according to the Institute for Justice. The group represents the New London residents who filed the case.

The issue revolves around whether a government is serving a public purpose when it uses its power of eminent domain to take land. The Fifth Amendment prohibits taking private property for public use without just compensation. The New London case is not about the amount of compensation being offered, but whether the government can take the property at all.

Many court watchers anticipate a definition of "public use." A strict interpretation would argue that whatever structures were built on the land that was taken must actually be public, such as would be the case with a highway. On the other hand, cronyist whores would argue that the potential of generating sales tax revenue with a new mega-mall that exceeds the tax revenue generated by homes and small businesses that were targeted for seizure would constitute public use, because those additional tax dollars benefit the entire community.

I'm still undecided on this issue. I can't decide if proponents of eminent domain for private development should be burned at the stake, or drawn and quartered. Perhaps I'll consult Alberto Gonzales on that matter.

Here's my test for "public use":

1. The benefit must be real, not speculative. Forecasts of increased tax revenue would not qualify if they could not be guaranteed.
2. It must be possible for ALL members of the community to benefit. Any use that necessarily excludes part of the community from the benefit would not qualify.
3. The value of the benefit must clearly outweigh the negative consequences of the taking.

When they finally write the opinion on this case, expect a bunch of opaque bullshit that can be translated into "it's up to the citizenry to defend themselves from the depradations of snake oil salesmen. We love property rights, but connected developers have rights too. Can't we just all get along?"

I hope I'm wrong.

Comments

[Edens]

Another factor in this is scale. To say a neighborhood is "blighted" typically masks the fact that, while there are some properties that probably are, there are others, perhaps a majority, that aren't (or at a point where the judgement is at least subjective). Faced with this situation, a city typically has two options - exercising eminent domain to essentially grab an entire neighborhood and level it for redevelopment or using more or less the same tool to seize only those parcels that are vacant/abandoned/unihabitable and market them for redevelopment (note that, in many instances, "the market" is unable to accomplish this on its own due to various things such as clouded titles, probate issues and, often, outright abandonment where the owner of record cannot be traced). Obviously the first option allows for flashier powerpoint presentations and bigger ribbon cuttings, while the second calls for far more legwork and less immediate returns. So, naturally, which option do most cities opt for?

The challenge, in some ways, is figuring out how to curb one option without complicated the other. Assuming, of course, you consider one more legitimate than the other.

[lobbygow]

To say a neighborhood is "blighted" typically masks the fact that, while there are some properties that probably are, there are others, perhaps a majority, that aren't

Yep. Also, the designation of "blight" itself does not have a bright line definition, and is therefore vulnerable to abuse. I've also heard several folks make a convincing case that it amounts to institutional racism or class warfare when the demographic of the neighborhood is strongly slanted to an identity class that has little political power.

The title research issue has always been sticky. I worked on redesigning TVA's process for obtaining right of ways for transmission line construction. The title research was the single most complicated set and offered the greatest legal exposure. Still, I don't think one can make a compelling moral argument that the difficulty of achieving the acquisition of condemnable property through "normal" means justifies the use of this police power. Eminent domain should be a matter of necessity, not convenience.

[Edens]

Yes race and class played (plays) a large part in such sweeping blight designations as were done during urban renewal or in the New London case. Parts of east knoxville around the Coliseum were cleared, btw, because they were a "potential" slum...

However, regarding title search and what-not I'm going to have to call bullshit. You're talking about TVA - a large quasi-government institution, I'm talking about reviving the housing market in fragile neighborhoods where it essentially has ceased to function. By shoving all the burden off on potential buyers you're dooming a neighborhood to eventual destruction.

Oh and my experience of the vacant and abandoned property that the city has purchased through emminent domain is that it typically results in a windfall for the owner. By a process that continues to mystify me, The "appraised value" almost always works out to be more than any of these properties would bring on the market.
Assuming you could find someone to buy them in the first place.

[lobbygow]

By shoving all the burden off on potential buyers you're dooming a neighborhood to eventual destruction.

I'm not arguing against legitimate condemnations to free up individual properties that are in violation of code or have been abandoned. I'm arguing against the sweeping application of ED typically associated with big developer projects. In those case, the burden should COMPLETELY lie with the buyer. Taxpayers and residents shouldn't be compelled to fund anyone's dreams just because they have political access.

>I'm not arguing against legitimate condemnations to >free up individual properties that are in violation of >code or have been abandoned.

Maybe, but when you say "No Eminent Domain in the service of private development ever." (Which, granted, you said elsewhere, not here) That is essentially what you are saying. Seizing said property rather than simply demolishing it is, from the legal stanpoint, an eminent domain function. The city taking one abandoned house via ED and reselling it to a homeowner for the purpose or rennovating it is still using ED in the service of private development.

[lobbygow]

Seizing said property rather than simply demolishing it is, from the legal stanpoint, an eminent domain function.

I'm not that interested in the legal definition of ED, but in a particulary type of taking.

When a scofflaw's car is discovered on the street, the city may put a boot on the car to keep it from being used until the fines are paid up. If the car owner remains delinquent, they may tow the car and presumably sell it at auction. While it's clear the government has taken the scofflaw's car, I have no sympathy for her, and I don't feel her property rights have been violated.

However, if the government decided my car could be better put to use by someone else, and towed it in the dead of night. I would probably entertain thoughts of shooting everone involved.

Condemnations to address neglect, default on taxes, or abandonment are NOT in the service of private development. The fact that a buyer from the private sector might benefit when the public sector puts it up for sale is an ancillary benefit, but it is not the proximal cause of the condemnation. The cause of the condemnation is the violation.

OTOH, if a promise of superior tax revenue from a given parcel of land is the proximal cause of ED proceedings, then it most assuredly IS in the service of private development. But for the desire to develop, the ED would not have occurred.

I realize this is a bit of an artificial distinction since the desire to remove negative conditions is often accompanied by the desire to improve conditions. However, I'm going to say I successfuly defended my dogma for now. Like most dogmatists, I am my own referee.

[Edens]

>I'm not that interested in the legal definition of ED

The courts, on the other hand...

>I don't feel her property rights have been violated.

She may disagree.

> I'm going to say I successfuly defended my dogma for now.

Well, it is your website.

[lobbygow]

She may disagree.

Who cares? It only matters if the courts think her property rights have been violated. Right?

The courts, on the other hand...

Sheesh. Of course they're interested in legal definitions, but the argument in Kelo v. London is not really about the definition of "Eminent Domain," it's over the definition of "public use," or so the petitioners thought. In the end, the court completely sidestepped that question in my view.

What about you Edens. What do you really believe? Do you think the potential for improved tax revenue is by itself a justification for taking property?

And if your answer is "it depends," what, exactly, does it depend on?

[The Heretik]

Re: Here's my test for "public use":

1. The benefit must be real, not speculative. Forecasts of increased tax revenue would not qualify if they could not be guaranteed.
2. It must be possible for ALL members of the community to benefit. Any use that necessarily excludes part of the community from the benefit would not qualify.
3. The value of the benefit must clearly outweigh the negative consequences of the taking

First, I appreciate you taking on this topic because it shows where our society has come to or fallen to.

As far as "public use" goes, as a general principle, the government should not be an agent anyone's private and commercial gain. Using "eminent domain" to build shopping centers for profit is quite different from building roads or setting aside parkland for everyone's use.

As far as points one, two, and three:

1. Everything in life is speculative, with no guarantee. And any argument that weighs benefits first without considering immorality of means is both corrupt and bankrupt. No good fruit may come from a poisoned tree.
2. Any public condemnation by eminent domain that benefits first and foremost a private for profit entity does not benefit the public, but rather harms it by setting a most terrible precedent. In taking such actions, the state loses any sense of neutrality in public discourse. In siding with commercial interests first rather than working to "ensure the General Welfare" mentioned in the preamble to the U.S. Constitution, government would descend to the rule of the jungle, the survival of the fittest. Is that a society anyone but a top dog really wants?

3. No tangible real value for the few can mitigate the damage to all.

[lobbygow]

No good fruit may come from a poisoned tree.

I agree fully. Unfortunately, I've come to understand that many of my fellow Americans don't view the seizure of private property for private gain as immoral. I suppose it's because they can't conceive of it happening to them.

[grannyinsanity]

This neighborhood is not blighted, I've seen it on television. It is a middle class neighborhood.

Neighborhood as in the families have all been there for a long time, their children all grew up together.

Fair market value cannot replace relationships and memories like that.

The people who have invested their lives in their communities could not buy what they lost, and even if they could, what would stop it from happening again somewhere else?

Atrios has actually been there and he doesn't believe it is blighted either.

[Gordon]

The way the early Anglo Californians stole the land from the Spanish Land Grant grandees was to institute property taxes, which the Spaniards, land rich and cash poor, couldn't come up with.

[dilettantedude]

Everyone appears to be arguing this from the viewpoint of legality. I think that's too narrow a view.

The question to me really is one of how much power do you want the state to exercise over individuals? Is the individual preeminent, or do the needs of society take precidence?

Are you a Jeffersonian or a Hamiltonian?

In a primarily rural society in an undeveloped country, the takings clause made have made more sense than it does today.

What's the implied contract with society when we buy and develop a piece of land or other real property, assuming we follow the law and pay our taxes, etc.? If we assume the society's needs take precidence over the individuals, is payment of 'fair value' sufficient? Who decides? I think I might personally be better able to accept a taking if some independent, credible entity made the decision, such as an independent arbitrator, vs. a government that is biased by its business contacts, contributors and tax revenue potential.

I think we need to answer the question of what the implied contract with society is more definitively before I can take sides on this issue.

The question to me really is one of how much power do you want the state to exercise over individuals?

Yes and no. The "individual" in question here is not just the property owner whose home or business is being taken to give to another. The individuals in the surrounding neighborhood are also affected by a number of variables including:

1) The "hole" left when neighbors or business owners are forced out of the community via eminent domain. Cascading extinctions occur in nature. I think they can also occur in neighborhoods. Sometimes this could be the result of a state-sponsored perturbation.

2) The impact of the development project itself. What is the effect on runoff, light levels, noise levels, crime, pest populations, aesthetics, traffic, etc?

3) The impact on tax dollars. Many of these projects require initial investment from the taxpayers in the form of land grants, tax abatements, etc. What will the ROI be to the taxpayer.

So yes, "individuals" are impacted, but these individuals are part of a community. I think it is virtually impossible to separate the impacts on the individual from the impact on the community.

I think think the question is quite simple, but also quite specific:

Is it correct to force one private property owner to sell their property to another private property owner for purposes of economic benefit to the state if they have not violated any law or neglected to pay their taxes?

In a capitalist society, the answer should be NO.

Some would argue that the "neglected to pay their taxes" isn't even valid because the state has the ability to raise taxes and effectively force someone into delinquincy (see Propostion 13).

Most Conservatives would define the Kelo v. New London scenario as eminent domain abuse. So would most Liberals. All Libertarians would see it that way. It is a frustrating to me that projects like this still get the greenlight in this country.

This SCOTUS case certainly isn't the last word. I predict a groundswell, grass roots movement to get the laws changed state by state. Some states have already made the practice of employing ED for economic development illegal. I expect many more will follow, because opposition to ED is like supporting mom and apple pie. It's a no lose proposition with the voters.

The question to me really is one of how much power do you want the state to exercise over individuals?

Yes and no. The "individual" in question here is not just the property owner whose home or business is being taken to give to another. The individuals in the surrounding neighborhood are also affected by a number of variables including:

1) The "hole" left when neighbors or business owners are forced out of the community via eminent domain. Cascading extinctions occur in nature. I think they can also occur in neighborhoods. Sometimes this could be the result of a state-sponsored perturbation.

2) The impact of the development project itself. What is the effect on runoff, light levels, noise levels, crime, pest populations, aesthetics, traffic, etc?

3) The impact on tax dollars. Many of these projects require initial investment from the taxpayers in the form of land grants, tax abatements, etc. What will the ROI be to the taxpayer.

So yes, "individuals" are impacted, but these individuals are part of a community. I think it is virtually impossible to separate the impacts on the individual from the impact on the community.

I think think the question is quite simple, but also quite specific:

Is it correct to force one private property owner to sell their property to another private property owner for purposes of economic benefit to the state if they have not violated any law or neglected to pay their taxes?

In a capitalist society, the answer should be NO.

Some would argue that the "neglected to pay their taxes" isn't even valid because the state has the ability to raise taxes and effectively force someone into delinquincy (see Propostion 13).

Most Conservatives would define the Kelo v. New London scenario as eminent domain abuse. So would most Liberals. All Libertarians would see it that way. It is a frustrating to me that projects like this still get the greenlight in this country.

This SCOTUS case certainly isn't the last word. I predict a groundswell, grass roots movement to get the laws changed state by state. Some states have already made the practice of employing ED for economic development illegal. I expect many more will follow, because opposition to ED is like supporting mom and apple pie. It's a no lose proposition with the voters.