Eminent Domain Abuse is Making a Comeback

As the economy recovers, a rise in eminent domain to favor connected players looms, despite so-called reforms

End eminent domain abuseInstitute for JusticeThe use of eminent domain to seize mortgages from investors has been in the news recently. But, because of efforts to rescind protections enacted by state courts and legislatures, we’re likely to hear more about traditional eminent domain abuses: the seizure of modest, well-maintained homes and businesses to benefit wealthy, politically connected developers.  

Eminent domain abuse has dropped off considerably since its high-water mark in 2005 when, in Kelo v. New London, the Supreme Court ruled that local officials can condemn property solely because they can imagine an alternate use for it that might generate greater tax revenue.

Faced with outraged electorates, legislators in some 45 states have now rewritten their eminent domain laws to protect property owners from grabby local governments, or at least give the appearance of doing so. Some of the most abusive states—Florida, California, and Ohio—have enacted the strongest reforms by statute, initiative, or court ruling.

There is no doubt that the economic downturn played a role by dampening developers’ appetites for property. Even in states like New York, which have done precisely nothing to rein in abuse post-Kelo, new takings are rare. But as the economic recovery gains steam, Kelo-style takings threaten to re-emerge.

In March, Alabama reneged on its reforms, which had provided significant protections for property owners. Lawmakers, perhaps inadvertently, included condemnation authority in a statute that expands tax subsidies for industrial parks.

In California, under the guise of promoting “transit-oriented development” and affordable housing, legislators are plotting to revive eminent domain authority for private projects. The effort failed this fall but will be taken up again in January.

A bill in New Jersey (A3615) that would weaken protections for property owners sailed through the legislature, bolstered by support from the New Jersey League of Municipalities and the New Jersey Builders Association. Governor Chris Christie signed it into law last month. According to the bill's authors, the law codifies two state court rulings requiring cities to prove that property is a threat to public health and safety before seizing it and also provide “fair and adequate” notice to property owners when eminent domain is authorized.

In reality, the law attempts to remove the protections proponents say it codifies. “This law is transparently an attempt to go back to the old way of doing business,” says Peter Dickson, a New Jersey-based land-use attorney.

For instance, far from demanding cities prove a property is a threat to health and safety, the law says officials need only assert that the property somehow impedes land assembly—a standard that puts virtually every property in the state at risk.

The law also allows for the creation of “non-condemnation redevelopment areas” where officials do not have eminent domain authority—unless a property owner refuses to sell. In the case of such refusal, a non-condemnation area can be transformed into a condemnation area. The intended effect of the provision is to confuse property owners.

“If you’re in a non-condemnation area,” says Dickson, “you’re going to say, ‘why should I go hire a lawyer and spend tens of thousands of dollars to challenge this designation if it doesn’t put me under eminent domain?’” But failing to challenge the designation within 45 days means you lose the right to challenge it, even if condemnation occurs many years later.

In New London, Connecticut, the site of Kelo, after tens of millions of dollars in public spending, the redevelopment zone is a barren waste. Pfizer Inc., the intended beneficiary of the plan, abandoned the city after its tax incentives expired. "Successful" projects still rely on public subsidies for years after completion, and their contribution to the tax rolls remains debatable at best.

As a new chapter in urban renewal history begins, post-Kelo and post-recession, there is some cause for optimism. People across the political spectrum despise eminent domain abuse. And, when legislators have yielded to powerful interests, state courts are increasingly skeptical of calling private development a public use. But without effective safeguards, this chapter may look suspiciously like the last. 

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  • Kill all the economists||

    the Supreme Court ruled that local officials can condemn property on the basis that there may be an alternate use for it that might generate greater tax revenue.

    You wanted a federal government that does nothing, and you got one. What's the complaint?

  • Irish||

    I'm having a difficult time figuring out how a government that kicks people off their own property 'does nothing.'

    I don't understand why you keep showing up here. Based on the other thread, you're obviously our resident dumbass racist troll. Wouldn't you be more comfortable at Stormfront?

  • Wizard4169||

    in these cases, the feds aren't "kicking people off their own property", they're just failing to do anything to prevent it. So, yeah, doing "nothing".

    While I usually endorse the government doing nothing, in this case I think the feds are doing evil by failing to intervene in a clear case of injustice. If government has any legitimate purpose whatsoever, it is to prevent wrongdoing.

  • Jquip||

    You have a small thinking problem. Try thinking big: How much more effective would the IRS be at raising revenue, if auditors were better armed?

    Using discounted prices for used merchandise, the IRS could purchase every firearm in America for a rather modern-meager sum nearby $150 billion.

    Selling points: More revenue. Less gun violence.

  • OneOut||

    Our complaint is that the local government has abused eminent domain with the OK of the Feds. The Supremes saying they can is hardly a Federal gov not doing anything. In case you haven't noticed the Supremes are the Feds.

    Your snark/argument is self defeating.

  • Overt||

    It's a no-brainer why the governments are using kelo so much less: The housing crash has significantly undermined the profitability of a private company developing land. As a result, they are less likely to PERSUADEbribe local politicians to EXERCISEabuse their powers of EMINENT-DOMAINcrony-capitalism

  • Irish||

    There's also the little issue of D.C.'s possible eminent domain abuses.

    Sacramento and Washington, D.C. were both considering using eminent domain for sports stadiums.

  • Anonymous Coward||

    Kelo v. New London should hold a place of shame with such decisions as Wickard v. Filiburn, Korematsu v. US, Gonzales v. Raich, Plessy v. Ferguson and Scott v. Sandford.

  • R C Dean||

    You left out NFIB v. Sebelius. Not sure why.

  • Anonymous Coward||

    I haven't read the majority opinion NFIB v. Sebelius, mainly because I was so disgusted by the outcome that I didn't want to give John Roberts that small courtesy.

  • Francisco d Anconia||

    Smith v. Maryland

  • Anonymous Coward||

    That one I forgot about (the pen register case). Harry Blackmun was a piece of shit.

  • Eduard van Haalen||

    Ooh, ooh, can I suggest one?

  • Acosmist||

    Infants aren't people, because penumbras.

  • mad libertarian guy||

    Kelo v. New London should hold a place of shame . . .

    It isn't already?

  • The Late P Brooks||

    You wanted a federal government that does nothing, and you got one.

    Derpitty derp derp.

  • Teaganl||

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  • carminahultgren||

    my buddy's aunt makes $87 an hour on the internet. She has been laid off for six months but last month her payment was $19984 just working on the internet for a few hours. great post to read
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  • ||

    EMINENT DOMAIN IS LIVE AND WELL IN FLORIDA
    JOHN K ROSS did an excellent job reviving the subject of EMINENT
    DOMAIN.
    The conspiracy used by officials in small and large towns is amazing.
    The perpetrators come in sheep cloths they manage to join and become
    members of the the local boards , start the process rolling, hire
    the proper lawyers,paid by the peaceful average citizen who will be
    footing the future rise in Taxes. Once they have achieved what they
    wanted they move on to another town or go on selling more real estate.
    If you dare object to the process they will accuse you of selfishness.
    This is one of the forms of Greed . Yes I know there will always be a
    God Fearing honest looking member of a board who will argue about fairness and why not "We will let the judge determine"or "we will
    even pay for your lawyer" but what they miss is what is a fair price
    for a piece of dirt that we need and will call it for the price of proper drainage and health and well fair as well as public safety.
    David Nehme MD
    Sewalls point Florida

  • juliajuli314||

    my roomate's mother makes $82/hour on the internet. She has been without a job for 9 months but last month her check was $15166 just working on the internet for a few hours. look at this now
    =========================
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    =========================

  • CLamb||

    In N.J. the state isn't even bothering with eminent domain for flood protection projects. The governor is just bullying people into accepting them by ridiculing folks who refuse to grant the government the right to build any "erosion control and storm damage reduction measures together with appurtenances thereto" including the right to remove any structures without compensation. For an example see http://www.bricktownship.net.p.....rev516.pdf

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