"In our post-Kelo world, the vocabulary of economic development takings may have changed, but in many states the substance will not."
June 23, 2007
By CARLA T. MAIN
Wall Street Journal
In Brandon, Ore. there lives a one-armed man named Scott Cook who owns income-producing timberland. The state revoked his license to drive a truck on account of his having only one arm. Then the government decided it wasn't quite through with him: Now his land is being taken by the town by eminent domain, so his neighbor's golf resort can be expanded. The town likes the resort because it supplies jobs. Mr. Cook feels certain he will never get what his land is worth. He is outraged that his town would take land from one man to give to another.
This is called an "economic development" taking, and two years ago -- June 23, 2005 -- the nation was up in arms over this sort of thing. On that day the Supreme Court decided Kelo v. New London, and said that it is constitutional for the government to take your property and give it to someone else if doing so will rake in greater taxes for your town.
Americans were instantly united in bipartisan fury. The U.S. Congress swiftly passed a resolution condemning Kelo, and the House and Senate introduced a slew of bills, to curb what so many perceived as the power of eminent domain run amok. More than a hundred bills were introduced in state legislatures to accomplish the same end, and two states passed moratoriums on economic development takings. Pundits spilled ink declaring that the Founding Fathers were spinning in their graves. Spittle flew as politicians grabbed the nearest mike, rushing to condemn Kelo as the unquestioned death knell of American property rights.
But how is it we still have someone like the soon-to-be-timberless Mr. Cook? Well, a year went by and the moratoriums were lifted. Congress never did pass any of the bills. Reform was left to the states. Some states, such as Oregon (hence Mr. Cook's bad luck), California, New York and New Jersey passed no meaningful reforms. The latter three are among the most active in these kinds of takings.
Some 28 states have passed substantive eminent domain reform since Kelo. Many enacted laws that prohibited private-to-private transfers for purposes of economic development. Sounds grand, right? But there's a loophole: blight.
Armed with a blight exception, private property in nearly all of the loophole states may still be condemned and ultimately used for economic development. Put another way, once a finding of blight is made, it's anchors away to build whatever the city or a private developer fancies. This leaves property owners vulnerable to unholy alliances between municipalities and developers, with condemnation processes that can lack transparency and due process.
In 1954, Supreme Court Justice William O. Douglas unleashed municipalities with the ruling in Berman v. Parker: The liberal court at its apex unanimously agreed with the notion that the elimination of blight is a "public use" under the takings clause of the Constitution. But what is blight? A half-century of experience has demonstrated only that it is in the eye of the beholder, or perhaps more to the point, in the eye of the power holder.
Blight standards are notoriously subjective; it just isn't that hard to find when one goes looking for it. And Congress conveniently passed statutes that rewarded municipalities with federal dough for slum clearance. Bingo! Cities found ever more blight to remove, often and not coincidentally in neighborhoods inhabited by blacks and Latinos.
Now, even in the backlash against Kelo, eliminating blight as a ground for eminent domain has proven to be close to impossible. The importance of this problem must not be underestimated if we are to understand why takings for economic development have been so hard to stop. Even when common sense would dictate that a project is economic in purpose, it can still be pursued under an urban renewal plan, i.e., to eliminate "blight." In our post-Kelo world, the vocabulary of economic development takings may have changed, but in many states the substance will not, especially as towns learn to teach to the test.
Only Utah and Florida passed statutes that eliminated the blight loophole -- stating plainly, no economic development takings, ever. The relief in Utah was short-lived. On March 20, 2007, Utah reversed course. Gov. Jon Huntsman signed a bill that restores blight to the table and allows the taking of private property for private development so long as 80% of one's neighbors concur -- a democratic scenario one homeowner called "mob rule."
Florida's law was passed under the white-hot intensity of the Riviera Beach controversy, a massive project that gained national media attention right after Kelo. This development was the brainchild of former Mayor Michael Brown, who wanted to "save" his mostly black city by ejecting some 1,000 homeowners from their modest seaside bungalows that sit on valuable land not far from Palm Beach. Then a great condo and yacht marina complex could be built on this formerly "blighted" land.
The post-Kelo media wave, with support from then Republican Gov. Jeb Bush, helped push Florida's reform bill through and oust the Riviera Beach council, thus killing the project. It remains to be seen how long condo and yacht club developers, big box retailers and the lawmakers they lobby will wait in the wings before obtaining changes in Florida's law.
Fellow legislators wonder too. Ohio conducted a year-long, post-Kelo dog-and-pony show of hearings by an eminent domain task force. It issued a lengthy report -- but the legislature has passed no laws. One member of the task force, unable to envision a world without eminent domain bulldozers, commented to me about Florida's law: "I don't know how they plan to renovate their barrios down there."
At the other end of the spectrum from Utah and Florida there is New Jersey, which has seemingly never met an eminent domain project it didn't like. Events in the Garden State are an object lesson in how post-Kelo politics can devolve. New Jersey Public Advocate Ronald Chen, appointed by Gov. John Corzine, has championed the cause of basic reforms such as giving homeowners notice before condemning their property, improving compensation, and putting the burden on powerful developers to justify a taking by showing that the property is blighted.
As a result, Mr. Chen has found himself mired in the down and dirty muck one finds at the intersection of real estate and money in New Jersey politics.
State senators have publicly excoriated him in a legislative hearing for something as ordinary as daring to file amicus briefs in eminent domain cases.
Meanwhile, change has come at an excruciatingly slow pace. Reform bills have been introduced, but none has passed. Working class octogenarians in Long Branch continue their fight to keep their small oceanfront homes -- now valuable -- from the grasp of condo builders; trailer park residents in Lodi have to litigate to hold on in a town that wants to upgrade its residents. In Paulsboro, the taking of empty warehouses and vacant land was challenged; the New Jersey Supreme Court held it does not pass muster to say a property is blighted simply because it is "not fully productive."
The decision was hailed, though it did not invalidate the redevelopment law that spawns such takings. Still, it's a faint light in a very dark tunnel, and similar to a decision by Ohio's Supreme Court, Gamble v. Norwood, in which a working class neighborhood was slated for urban renewal, not because it was deteriorated, but because it was "deteriorating." The court struck the term down as unconstitutionally vague.
In the summer of 2005, even as impassioned speeches to protect private property rights were made to the media on state house steps around the country, resistance was brought to bear inside by interest groups. The result is a national landscape that continues to include barely fettered economic development takings under the blight umbrella.
With each Kelo anniversary, the politics will become more partisan as we forget our initial outrage. While the reforms can improve due process, such as those Mr. Chen recommends, many have aimed at narrowing -- but not eliminating -- blight exceptions. We need to take care. Developers will always look for eminent domain bargains, and towns for ways to raise revenue or rid themselves of undesirable populations. It is not hard to imagine a time when they will set their sights on the surest bets -- the poor and minorities -- resetting eminent domain on its most pernicious historical path.
Ms. Main is the author of the forthcoming "Bulldozed: 'Kelo,' Eminent Domain and the American Lust for Land" (Encounter Books).
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