The Battle Over Property Rights
By: Liam Lavery, General Counsel | October 18, 2006
Every lawyer studies property rights in the first year of law school, but this basic education rarely makes for cocktail chatter. That’s changed this fall. Home owners, property developers, environmentalists, local government officials, and pundits are up in arms over a variety of property rights measures on the ballots in many states.
(Castle Coalition map showing possible eminent domain abuses in U.S.)
On September 30, Louisiana passed the first of these measures. Ten more are up for vote on November 7.
The turmoil dates back to a U.S. Supreme Court decision last year, Kelo v. City of New London. In Kelo, the city of New London, Connecticut, sought to create jobs, increase tax revenues, and "revitalize an economically distressed city" by redeveloping the neighborhood around the former Fort Trumbull naval facility. The city bought land for the project from willing sellers, then used its power of eminent domain to acquire the remaining properties from unwilling home owners. The City’s redevelopment plan called for the resale of acquired properties to private developers, and a group of home owners objected that this was an unconstitutional seizure of their property for private purposes. In a 5-4 decision issued in June 2005, the Court found that the U.S. Constitution permitted the City to seize private land and transfer it to a private developer, as part of a public redevelopment project.
The decision provoked an immediate outcry in the mass market press, and a truly phenomenal outpouring in the blogosphere. City officials hailed the leeway the Court gave local governments to address the economic health of their communities. Property rights advocates, on the other hand, used Kelo as a rallying cry to defend the family homestead and other property holdings.
Polls show that most Americans object to the use of eminent domain for the purposes of private development, although it is hard to frame a poll question to capture the nuances of a Kelo-like situation. In most respects, it appears the opponents of Kelo have had the upper hand. In the 15 months since the decision, 31 states have passed legislation to limit the power of eminent domain by local governments. President Bush signed an executive order forbidding condemnation by the federal government for the benefit of a private developer. And at least one state supreme court has interpreted its state constitution to forbid use of eminent domain in a Kelo-like situation.
Even when a government has the right to take private property, the Fifth Amendment of the U.S. Constitution requires that the owner receive just compensation. Generally, this involves a court action to determine fair market value, with each side presenting expert testimony by appraisers to support a compensation price. If city hall wanted to take your home to redevelop your neighborhood, would you sell? Would it matter to you whether the project were carried out by a government entity or a private developer? Would you feel that a court’s determination of "fair market value" for your home is "just compensation?"
A last set of questions, to shine a light from another angle: If city hall wanted to redevelop the next neighborhood over from yours, would you want city hall to have the power to take homes there via eminent domain? Would it matter to you then whether the actual project was carried out by a private developer?
Any individual truly does not know the answer until it happens to him, but the law struggles to decide the rules ahead of time.
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Comments
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Rich on October 20, 2006 1:44 pm
I think this was an interesting post, Liam, and I decided to post a comment so you didn’t get bummed out that no one else had commented
Personally, I think eminent domain needs a pretty bloody good reason to be exercised, because it is so antithetical to property rights, which i believe are fundamental. It’s hard for me to define what “pretty bloody good” means, but I’ll know it when i see it, and private development ain’t it.
Liam Lavery on October 23, 2006 9:38 pm
I think much of the backlash against the Kelo decision comes from the same place, Rich. In short, it’s the feeling that the government doesn’t get to take private property just because it decides another private use is “better” than the current owner’s use. As Justice O’Connor wrote in her dissent in Kelo, “Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded—i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public—in the process.”
One interesting thing about the Kelo decision is that the 5 member majority decided the other way based on a policy of judicial restraint. Justice Stevens, the most “liberal” justice, wrote that “the question
whether the City’s development plan serves a ‘public purpose’” should be answered in accordance with the Court’s “longstanding policy of deference to legislative judgments in this field.” The majority recognized that there was great public disagreement over whether the New London plan was an appropriate use of eminent domain, but the justices were reluctant to substitute their judgment for that of the elected representatives. As I noted above, 31 legislatures have taken up the opportunity offered by the Kelo majority and trimmed back the power of eminent domain. Reading the majority opinions, you can see that those justices are probably pretty happy with that outcome.