Thursday, June 23, 2005

Gimme That House!

Kelo v. City of New London, Conn. (view text here) — OR — 
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In cases involving redevelopment, cities can now take Peter's house, and give it to Paul the developer. Many of us thought it to be the opposite. We thought cities could use eminent domain to seize property (like your house) only if it was for public use, which was generally interpreted as something like a roadway, or rail line. It was something that was needed for the good of the community. This did not mean you could take a neighborhood away and put a shopping mall in its place. But we were proved wrong today in the case of Kelo V. City of New London, Conn.

The Associate Press reports that Justice John Paul Stevens wrote for the majority, which included Justice Anthony Kennedy as well as the court's liberal wing of justices David H. Souter, Ruth Bader Gindburg and Stephen G. Breyer. In his opinion, Stevens said:
"Promoting economic development is a traditional and long accepted function of government."

To support this contention, he goes on to cite Berman v. Parker, 348 U.S. 26 (1954) in which the High Court upheld a redevelopment plan that targeted a blighted area of D.C., in which most of the housing for the area's 5,000 residents was beyond repair. As a part of the plan in that case, the area was to be condemned and part of it utilized for the construction of streets and schools and other public facilities. The remainder was to be leased or sold to private interests for the purpose of redevelopment, such as the construction of low-cost housing. From that ruling, Stevens quoted the following:
"The public end may be as well or better served through an agency of private enterprise than through a departmentof government — or so the Congress might conclude. We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects."

What that appears to mean to the Kelo case is that the city of New London can pay market value for homes and wave goodbye to the residents, who may, or may not, be able to find comparable housing elsewhere. In the meatime, the land can then be used for a commercial development that includes a riverfront hotel, a health club and offices that the city believes will be of great benefit to the economy of the entire city. I might add that it may also be of benefit to the pockets of the developers who pursue this venture, though success is never guaranteed in redevelopment projects (if you doubt this I suggest you visit Flint, Michigan).
There have been cases similar to Kelo before. This is well noted by Justice O'Connor in the dissenting opinion (joined by Chief Justice William H. Rehnquist, Justice Scalia and Justice Thomas). O'Connor quotes Justice Chase, who wrote more than 200 years ago:
"An ACT of the Legislature (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority … A few instances will suffice to explain what I mean. … [A] law that takes property from A. and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with SUCH powers; and, therefore, it cannot be presumed that they have done it." Calder v. Bull, 3 Dall. 386, 388 (1798) (emphasis delieted).

It's hard enough to find a home, let alone lose one for the development of a hotel, etc... It is a difficult issue. What do you do when a city has been so poorly planned, or which has seen its industry change so dramatically that it has no choice but to bulldoze homes to stimulate growth in the economy? It is a hard thing. But it is also dangerous to entrust to cities this kind of power. It is not too far a trip to imagine local city council candidates in any town receiving campaign contributions from big businesses interested in land that has been unattainable for purchase for whatever reason. Nonetheless, Stevens does offer one bit of hope:
"In affirming the City's authority to take petitioners' properties, we do not minimize the hardship that condemnations may entail, notwithstanding the payment of just compensation. We emphasize that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power. Indeed, many States already impose "public use" requirements that are stricter than the federal baseline. Some of these requirements have been established as a matter of State constitutional law, while others are expressed in State eminent domain statutes that carefully limit the grounds upon which takings may be exercised. As the submissions of the parties and their amici make clear, the necessity and wisdom of using eminent domain to promote economic development are certainly matters of legitimate public debate. This Court's authority, however, extends only to determining whether the City's proposed condemnations are for a "public use" within the meaning of the Fifth Amendment to the Federal Constitution. … [O]ver a century of our case law (interprets) that provision dictates an affirmative answer to that question …"

Let's be honest. "Redevelopment" does not occur in upper class neighborhoods. It occurs in depressed, or poor neighborhoods where many of the residents are renters. As renters, they aren't party to any of the fair-market value price paid the owner. There may be other laws that might require the landlord to compensate them with a little extra dough to relocate, but where's that? The next town down the road? The next county? Next state?