Should Eminent Domain be used to transfer property between private owners?

[TXlib]

Eminent domain (ED) allows goverments to seize private property, provided the owner is justly compensated, for the greater public good. Traditionally, this has been used for public works such as roads, schools, etc. More recently, it has been used to eliminate slums.

Increasingly, however, governments, particularly municipalities, are using ED to transfer property from one private owner to another, e.g., to turn a neighborhood into a mall, under the justification that the economic development increases the tax base and serves the public good.

I am very uncomfortable with this use, or IMHO, misuse, of ED, for two reasons: first, how a government decides "just compensation" may have little to do with the market value of the property. Second, and more importantly, this use of ED has great potential to be abused for the sake of well-connected developers.

There's an article on CNN.com that addresses this issue.

[StClone]

1. W got a New Ranger Stadium via ED

His private party wanted the land and went the ED route and made millions by under-valuing the property. He got rich the owners had no recourse. Hatfield's book Fortunate Son has all the details.

[Ravenseye]

4. The Really Nasty Thing About That

Was that they got a ton of land for the ballpark. The used ED to snatch the land at a really really low price, then after the ballpark was built they had a ton of land left over, and sold it to other developers for a huge profit. It's not like he just used the land to build the ballpark, they got a ton more and then made money on it.

Totally uncool.

[Ironpost]

6. I say criminal

[JoeMemphis]

23. President Bush might file an amicus brief against homeowners

siding with New London, according to the Cato Institute.

Bush isn't going to stop the one government program that let him get rich, is he?

[Coastie for Truth]

2. In several states ED is like a Lotto Ticket

if your home or business is taken -- you have hit the Lotto (Big Time). Most states you lose -- but in Pennsylvania you win big -- they pay you enough to "go away happy." Don't say "They couldn't pay me enough." In Pennsylvania they do pay you enough.

I-95 and I-70 and I-79 and the Philadelphia's "Society Hill" and Pittsburgh's original Three Rivers Stadium left a lot of retirees and working people comfortably fixed (so comfortable that they could leave Pennsylvania for Florida or Arizona :) )

I was pissed that they didn't take my house for SkyBus Rapid Transit (then I could have paid cash for a house in Upper St Clair or Mt Lebanon). Even the merchants who had to move for PPG Place -- all did very well.

You can thank Governor Milton Shapp and Judge Nicholas Papadakis for a very pro-home owner, pro-displaced business owner ED law.

You folks complaining - you live in stingy states with stingy ED laws. You need to elect folks like Governor Milton Shapp and Judge Nicholas Papadakis.

[TXlib]

5. If ED has to be used, this is the way to do it.

I feel that all use of ED is tyranny, but that in rare circumstances it is needed. As such, it ought to be expensive to the government to employ, to reduce the incentive to corruption.

I also think that ED law needs to be written to that the land taken by ED is used for a very specific purpose -- the one given when the land was taken. If it turns out the land wasn't needed for exactly that purpose, then the land is returned to the former owner, who gets to keep the money given for taking it to start with. This would help with situations like the Bush stadium land grab.

[MadHound]

3. No, it shouldn't be used to transfer property between private owners

In fact I think that ED should have a few more restrictions on it even when it is used for public works. My family, and many others have been screwed by ED. The phrase "just compensation" is very relative, and is open to abuse. I've known people who had their land cut off for widening a road, received the proper monetary amount for the land, yet then had to turn around and spend all of that cash and more repairing the damage done by the city when the road was widened.

This case before the Supreme Court is a crucial one. If the court rules in favor of the city, then our private property laws aren't worth the paper they're written on. All of our property will owned only at the whim of developers and commercial interests, for these folks can always use the excuse that they're development will provide greater good by bringing in more taxes.

If this goes through, I predict that within a decade or less, we'll be reading in the paper about some average American, getting rolled over by corporate America via ED, locked into an armed standoff as they try to keep their land from being developed.

[Coastie for Truth]

8. An aggressive, avaricious, hungry lawyer

who knew ED would have been a big help.

[TXlib]

9. Is there any other type?

[Coastie for Truth]

10. More avaricious, aggressive, and hungry then the average lawyer

--after all, it's your house!

[TXlib]

7. kick

[ProdigalJunkMail]

11. where is the "fuck no" option? n/t

[TXlib]

12. Who voted "Yes"? I'd like to hear your argument.

[goodhue]

15. I voted yes, despite loaded wording.

The argument is that economic development is a "public use" under the fifth amendment. Courts should defer to a legislative finding of a public use unless that finding lacks a rational basis, even where a private actor stands to benefit. Heightened scrutiny would be unworkable and would transform courts into super-legislators.

The term "public use" was never intended to limit eminent domain only to condemnations where the public would own or have access to the expropriated property. The takings clause does not impose any limitations other than the payment of just compenstation.

Local communities across the country face economic challenges that must be addressed through redevelopment programs requiring the use of eminent domain. The private sector often cannot accomplish the job alone due to a range of market failures, including holdouts, brownfields, clouded property titles.

[JoeMemphis]

17. The only market failure ...

... is that the developer doesn't want to pay a price that the property owner is willing to accept for his/her property, so the developer gets the government to do the dirty work for him. Private property ownership means deciding if to sell, to whom to sell, and how much to sell for.

Brownfields are not at issue. There are already laws to allow for the condemnation and seizures of abandoned or unsafe properties. What New London is trying to do is take property from middle-class homeowners because the homeowners have simply managed to own a piece of property that someone with more money wants. Democrats do support the middle-class, right?

If New London prevails over Kelo, then everyone's private property rights will be directly proportional to the tax revenue and jobs they create. Dangerous precedent.

[goodhue]

20. The holdout problem

"The just compensation clause -- 'nor shall private property be taken for public use, without just compensation' -- does two things. It recognizes the sovereign power to take property through eminent domain, and then conditions that power upon the payment of just compensation for any taking.

The recognition of the power of eminent domain is as important as the condition, for it protects the public from being held hostage by holdouts. Without the power to condemn property, owners could extort windfall profits from the taxpayers when they happen to hold key property necessary to complete a proposed road, park, or other public project. Or they could stop needed community initiatives by refusing to sell.

In construing the just compensation clause, the Supreme Court avoids the holdout problem by measuring compensation for any taking based on the claimant's loss, not by the public's gain. For example, when the government requisitioned private ships for use during World War II, just compensation did not include any increase in value due to the government's urgent need of the vessels. Instead, long-standing case law makes clear that just compensation should simply return the claimant to the same position monetarily but for the taking. The claimant is made whole for any direct monetary loss, but is not allowed to extract an unfair profit by exploiting a pressing public need for the property."

http://www.communityrights.org/Newsroom/OpEdsLetters/LT1-20-03.asp

[JoeMemphis]

21. This isn't a public initiative in question -- it's a private business

<i>Without the power to condemn property, owners could extort windfall profits from the taxpayers when they happen to hold key property necessary to complete a proposed road, park, or other public project. Or they could stop needed community initiatives by refusing to sell.</I>

I don't think you'll find one person to disagree with the use for eminent domain and preventing homeowners from holding out on price for public use items like a school. This is not the case.

What is happening in New London is taking from Owner A and selling to owner B because the government says owner B can make a more productive use of the property. This is not a community initiative where the property would be publicly owned and accessible -- New London wants to take property for the benefit of a private business. If a private business wants land, they should be required to find willing sellers and negotiate with them without buying off politicians to do that form them.

I'm sure that the land I own would generate more taxes and jobs if it were converted to a Wal-Mart Super Center. I'm hoping for Kelo to prevail here, and I'm actually siding with Antonin Scalia big time here. I don't want my private property ownership rights to be determined by how much tax I pay or how many jobs I create.

[Book Lover]

13. ED is wrong in general

And I would campaign to remove it from the books and the federal Constitution. I don't like any government having that kind of power; the current SCOTUS case is a good exemplar of the unavoidable expansion. The way the arguments went yesterday, it sounds like this crew is going to OK ED if it merely raises tax revenues!

[goodhue]

14. Your question is push polling.

Your question suggests there has been a recent change in use of eminent domain. In fact, the practice of post-taking transfer to private party is longstanding and has been repeatedly upheld by the courts.

In 1954, in Berman v. Parker, 348 US 26, the US Supreme Court upheld eminent domain to take non-blighted property in Washington DC for urban redevelopment. The taken property was transferred to private developers. And in 1984, the supreme court again upheld the practice in Hawaii Housing Auth v. Midkiff, 467 US 229. If the supreme court rules against the City of New London, they will effectively have to overule Midkiff.

The courts decide just compensation not the taking government. The fact that a power may be abused does not mean it should be taken away.

Most popular accounts of the issue read as if literally written by right wing anti-government Institute for Justice. http://www.ij.org/

For another point of view, check out Community Rights Counsel
http://www.communityrights.org/PDFs/Briefs/Kelo.pdf

[Blue Wally]

16. This is one of the few issues

on which you will find liberals and conservative lining up on both sides. While eminent domain goes back to English common law, its expansion into econiomic development has slowly evolved from building housing projects in place of slums into tasaking land just to increase the tax base. Unless SCOTUS reverses this and modifies the earlier decisions, you will find many existing functional neighborhoods condemned just because some developer has convinced the local council to let him build McMansions on it with fewer schoolkids and more tax dollars.

[Disturbed]

18. Hell no!!!!

"Our private property laws aren't worth the paper they're written on."

[Walt Starr]

19. It's amazing, Scalia seemed to be leary of this usage of eminent domain

I was reading some of the questioning and basically, it seems the justices agree this is basically using the governement to move property from person A to person B because person B has more money.

[bleedingheart]

22. I am okay with it for specific public use

Specifically for mass transit.

Otherwise I think it is typically unfair.

Schools, hospitals etc...can be built on other sites but mass transit lines are hard to place.