Property Owners Fight to Keep Their Land: Bitter disputes play out nationwide as cities seeking to improve their economies condemn homes and businesses for private development. That is the headline of this story published today in the LA Times and a number of other papers.
Bitter disputes are playing out nationwide as city leaders eager to improve their economies condemn homes and small businesses — not for highways, airports or other public projects, but for private development. Local planners struggling to rejuvenate their downtowns or aging suburbs say that sometimes the public good outweighs the property rights of individuals. * * *My favorite quote from the story was: "Almost any home in the country would produce more tax money and more jobs if it was a Costco."
The Constitution says that so long as owners receive just compensation, private property can be taken for "public use." In 1954, the Supreme Court ruled that this includes plans that serve a "public purpose," even if the land ends up in private hands. At first, governments targeted slums for redevelopment. "Now they take areas that are in pretty good shape that a developer would want — good, solid, safe areas near the highway or with a beautiful view." * * * Local planners say property seizures can lead to new businesses that add jobs and boost tax revenue that pays for local services.
Not surprisingly, there are many similar stories available. An opinion piece from The Cincinnati Post, dated 5/2/03:
The Constitution seems pretty clear on the point: Private property shall not be taken for public use without just compensation. Fair enough; sometimes the public good outweighs property rights. But here in Greater Cincinnati, and across the country, there is mounting evidence that local governments are abusing the definition of "public good'' to help developers acquire property that ought to remain subject to the free market laws of supply and demand. Most often, these abuses involve property taken for retail or commercial development. * * * This is a practice that needs to be curtailed. If the world really does need more retail stores and restaurants, let the developers buy the land themselves. Better yet, let them redevelop the tired strip centers that line such of the land along our commercial arteries.Here is a link to the libertarian Institute for Justice publication, “Public Power, Private Gain,” mentioned in the Post story.
The Gotham Gazette (read about the Gazette itself here), has a lengthy and comprehensive story from 3/4/02 that includes this information:
"The fact that there might be some incidental benefit to certain private individuals or private businesses, doesn't undermine the overriding public purpose that we would be seeking to accomplish," said Joe Petillo, a lawyer for the Empire State Development Corporation. He and other supporters of the private condemnations point to those that sped West Harlem's recent renewal.But [Michael] Rikon, the lawyer for several of the businesses being condemned in East Harlem, points out that once the Empire State Development Corporation sells the developer the seven-acre plot, no law requires him to build the promised store. Minic himself says that the existing businesses already employ 144 people full time, people whose jobs would be in jeopardy, and that many of the jobs at Home Depot might not be full-time, nor as well-paying.
Rikon, who has published extensively on the need to reform condemnation law, said that this new business-oriented approach to condemnations dates back to 1981 and the legal case Poletown Neighborhood Council v. City of Detroit. The Michigan Supreme Court ruled that a community could be condemned to allow General Motors to build a factory, accepting the argument that it would revitalize the community. "Because of that case, cases hereafter have approved almost anything that has come along," Rikon said.
He also referred to the landmark 1954 United States Supreme Court case Berman v. Parker, when the court said slums could be condemned for the public use of beautifying a city. The expanded definition of public use from these cases remains the most useful legal precedent for private developers who hope to acquire private property by condemnation.
The Poletown decision is used in a number of Law & Economics courses. Here is one link to the decision. The Detroit News has a great special resource page, titled "Auto plant vs. neighborhood: The Poletown battle." (Be sure not to miss the Click here for more photos option.)
Posted by Marcia Oddi at May 11, 2003 04:00 PM