'The Best Interests of the City'

Jacob Sullum | November 10, 2004

Yesterday the Norwood, Ohio, City Council voted, 8-1, to dispossess Carl and Joy Gamble of the home they've lived in for 35 years. In another example of the eminent domain abuse the U.S. Supreme Court will consider this term, the city is taking the property on behalf of a wealthy developer who plans to build offices, shops, housing, and restaurants. The justification is that the new development will bring in more tax revenue.

The Gambles, represented by the Institute for Justice (which also represents the New London, Connecticut, property owners whose case will be heard by the Supreme Court), have been fighting the seizure for two years. "I don't like to remove anyone from their home," one city council member said. "But it is in the best interests of the city to take this property."

Comments

|11.10.04 @ 10:14AM|#

It sickens me that a city can evict a person from property they own. This is the liberty we're supposed to guard from terrorists? This is what creates the conditions that birth terrorism.

I hope the people of Ohio have the good sense not to patronize a developer who had to destroy people's lives so that he could get rich. In fact, I hope they have the good sense to sabotage construction.

|11.10.04 @ 10:16AM|#

"They negotiated sale prices with the other 66 property owners who want to sell and move out."

This is why I'm not enthused about this being a useful issue for anarchists: I gives the appearance of nutcases rushing to the aid of nutcases.

Whether we own our bodies or not?
There is an issue Joe Sixpack could be persuaded to understand.

|11.10.04 @ 10:20AM|#

I bet there are a lot of Joe Sixpacks who would understand the real meaning behind being forced to "negotiate" the sale of their beloved house with the threat of eviction and demolition hanging over their heads.

|11.10.04 @ 10:22AM|#

"I hope they have the good sense to sabotage construction."

I couldn't agree more.

|11.10.04 @ 10:23AM|#

The larger issue, but even harder to make the case: Why must governments be in the real estate business?

|11.10.04 @ 10:28AM|#

Rhenquist's potential absence from the court for the eminent domain cases makes me wonder whether we will get some 4-4 decisions out of the court, thus leaving the circuit decisions standing, and perhaps pushing off to the future some uniformity in these matters.

|11.10.04 @ 10:33AM|#

Ruthless, if you think that "Joe Sixpack" will glom onto "whether we own our bodies or not" before he comprendes being evicted from his own goddam house that he paid for, well, it just shows you don't know many Joe Sixpacks.

|11.10.04 @ 10:36AM|#

Joe?

:)

|11.10.04 @ 10:40AM|#

Let's see...
"How much beer and how many cigarettes could I buy with the profit these idiots are offering me for my house?"

|11.10.04 @ 10:43AM|#

I'm agin' it.

Condemnation for municipal facilities, sure. Condemnation to arrest genuine cases of blight, sure.

But condemnation to increase the tax yield? No way. Doesn't even come close to meeting the "public purpose" justification.

And it's bad planning practice to boot. Successful neighborhoods need to have a mixture of building styles, ages, prices, and conditions. This diversity of buildings allows a diversity of users, so that people from different walks of life can interact. That's where the spark of genius, the dynamism you libertoids hold so dear, comes from. The old clearance model of urban design ignores this, and ends up filling an entire neighborhood with buildings of the same age and, most importantly, cost (high). So you end up trading the real, messy, fine-grained city for a fake, homogeneous replica. Then you tack on some faux-victorian trim, and pretend it's all ok.

|11.10.04 @ 10:51AM|#

As for the "being forced to negotiate with the threat..." bit, that isn't actually how it works. If the City condemns your house, they're required to offer you fair market value, as determined by a collection of independent appraisers and analysts. Then, if you don't like the price, you can tie up the city in court for years, imposing legal costs on them and delaying the taking to the point that the deals fall through.

In practice, the city ends up offering significantly more than the property would command on the open market, just to make sure the deals go through smoothly and quickly.

Not that that changes the principles at stake.

|11.10.04 @ 10:59AM|#

All of which means absolutely nothing if the price still isn't high enough to make you want to move. The market has one supplier - a monopoly. The average value of surrounding properties is economically irrellevant. The city should be forced to let the owner name their price - that would be fair market in this case.

|11.10.04 @ 11:00AM|#

Ain't no uppity city councilwoman gonna get me outta this here house.

|11.10.04 @ 11:06AM|#

"Then, if you don't like the price, you can tie up the city in court for years, imposing legal costs on them and delaying the taking to the point that the deals fall through."

In a lot of states, the government has the advantage of "quick-take" procedures, under which they take your property now, and if you don't like the price they offer you, then it's up to *you* to spend years litigating to get fair value. In the meantime, you need to buy another house (or shop, or whatever). Under those conditions, it's not surprising that many property-owners just settle for what the government is offering them.

Just think, if King Ahab had had the advantage of modern eminent domain law, he wouldn't have had to kill Naboth to get his vineyard (see 1 Kings 21:16-29).

|11.10.04 @ 11:08AM|#

I don't know... I don't think I'd be able to blame people in these sorts of situation were they to put a bullet in the head of some council members.

Highway|11.10.04 @ 11:11AM|#

joe, I think J. was referring to the developer and city pointing to the other 66 owners who had already negotiated settlements, and indicating that some of those negotiations may have occurred under duress, such as "If you don't sell it to us voluntarily, we'll just get the city to condemn it." And while you and I realize that this is usually a higher payment than market value, I would imagine most people don't realize that, and take the earlier settlement to avoid court costs and perceived depression of property value.

They also condemned four other properties, and each is the same awful practice. Just because those owners hadn't lived there for 35 years doesn't make their screw job more right. I wish those others would get the same kind of publicity, because that would point up the fact that it's not just some dingbat old people with some silly sentimental attachment that don't want to sell. It's ordinary people, too.

|11.10.04 @ 11:23AM|#

"I don't like to remove anyone from their home," one city council member said. "But it is in the best interests of the city to take this property."

The quote is based on an automatic assumption that the council member has an actual right to "remove anyone from their home". This is nothing short of tyranny. And joe, I don't care if they want to build a midnight basketball court. Theft is theft.

|11.10.04 @ 11:30AM|#

"Ownership is the power of disposal ..."

If something is not for sale, it is not for sale.

"... nor shall private property be taken for public use, without just compensation."

Tax revenues are not a "public use". The town is taking something real from one citizen and giving it to another because the second citizen can pay more taxes. By this logic, any citizen can bribe the state into seizing for him any property that he might desire.

And, Joe, who defines blight? If I like my broken down house, why should the state have the power to drive me out for other than public use?

|11.10.04 @ 11:38AM|#

Highway said:
"And while you and I realize that this is usually a higher payment than market value, I would imagine most people don't realize that, and take the earlier settlement to avoid court costs and perceived depression of property value."

Still with us here, Mr. Sixpack?

|11.10.04 @ 11:44AM|#

If you aren't willing to sell your house for $X, then $X is not the market value, no matter what commissions of independent appraisers and whatnot may say. A notion of "market value" divorced from the seller's willingness to sell is not market value at all. Prices being determined by panels of experts is nothing to do with a market at all.

|11.10.04 @ 12:06PM|#

Excellent point, Grant. The market price is set by the interaction of buyers and sellers, always.

|11.10.04 @ 12:07PM|#

"All of which means absolutely nothing if the price still isn't high enough to make you want to move."

Well, it means SOMETHING - that you aren't actually losing economic value in the transaction. Though as I said, this is irrelevant to the personal issues involved.

The Renquist Court really screwed up in the Barrier Islands case, where they ruled that the government had taken a piece of land, even though they hadn't actually taken it, just changed its value through regulation. This changed the definition of property ownership by eliminating the connection between a person and a parcel, and reducing it to merely a financial relationship. In doing so, they made it easier to kick people off their land by giving them a check, because hey, ownership is primarily about value, and if you haven't lost your value, you haven't really lost anything.

|11.10.04 @ 12:12PM|#

Seamus, even in quick take procedures, the extended court battles cost the government money, time, and reputation. While they allow projects to go forward faster, the government is still wise to avoid them whenever possible.

Highway, I would imagine that the owners have lawyers, as with every other property transaction, who make it clear to them that they are in strong position to negotiate. I've seen these deals happen, and though owners may have preferred to stay, they never walk away financially poorer for the experience. Back in the bad old days, that wasn't true, but today, developers line up to buy land that is likely to be listed for condemnation, because they make a killing off the process.

|11.10.04 @ 12:17PM|#

Grant Gould,

Great post.

|11.10.04 @ 12:24PM|#

Mr. Nice Guy, take it up with the Constitution - actually, it goes back farther than that - the government can take private property for public use, as long as it pays just compensation.

Fabius, you raise the question that IJ is likely to argue, once they've thoroughly trashed the "tax and jobs" justification: does the arrest of blight count as a public purpose? You're question "who defined blight" is just silly - who defines a military threat that justifies war? Who defines when an impact is a nuisance? Who defines when a public speech act incites a riot? Who defines when a contract has been violated? The executive, legislative, and judical branches of government make judgement calls, applying general rules to the specific circumstances of a situation.

But as to why people with crappy, vacant buildings or lots can have their property taken, the answer is related to your right to swing your fist. If a house, no matter how crappy, isn't doing anyone any harm, then it is not a blight. It's just an ugly house. If your house was slowly collapsing, and dropping 2x4s onto the sidewalk as people passed, the government would have the right to protect the public. Somewhere in the middle is the issue of blight; that is, when a number of properties, through their vacant and deteriorating condition, are encouraging disinvestment, squatting, arson, and generally reducing the ability of the neighbors to enjoy the use of their property, including its economic use.

This is not an aesthetic issue - something doesnt' become blighted because it is ugly. This is an issue of economics, and the deleterious effects that vacant, deteriorating properties can have on the properties around them, and the district as a whole.

|11.10.04 @ 12:27PM|#

Grant, if I can convince somebody that a gumball is worth $10, is that gumball really worth $10?

Anyway, if a piece of land is needed to build a road, how SHOULD the government go about figuring out fair market value? Take the owner's initial offer of $1 million/square foot?

|11.10.04 @ 12:31PM|#

Grant,

When collecting property taxes, the government applies a rate of so many pennies for thousand dollars of value.

When determining this value, should the government just use whatever figure the property owner says he'd need to get in order to sell?

Because there are a lot people who own crappy 900 square foot ranches that wouldn't leave for a million dollars. I, for one, don't think they should be taxed at that value.

|11.10.04 @ 12:39PM|#

Russ D,
You're right, Norwood's finances are hurtin' for certain.

|11.10.04 @ 12:40PM|#

I live in Cincy and shopped in this very mall (the one to be expanded) for four years. Never again.

Last year I stopped there and walked through the disputed neighborhood. I saw no evidence of the blight Norwood claimed was there. Of course, that designation was just an excuse to condemn the property of those occupants who did not want to voluntarily leave their homes or businesses.

Many of the people who sold early are angry that their sales were in limbo during the court cases. To them I say that their neighbors' houses were not theirs to sell, in much the same way as the man in the apartment next to mine has no right to sell my dining table to a third party without my consent, no matter whether a government agent holds a gun to my head to force the matter.

Worth noting is the fact that the mall will still be hemmed in by highways on one side, and will not be much bigger even after expansion. Will the neighborhood adjoining the mall -- as unblighted as the condemned one -- be safe from future expansion and future need for city revenue? And how many people who live THERE voted into office the Norwood councilmen who evicted their neighbors?

|11.10.04 @ 12:40PM|#

'The Best Interests of the City' essentially means "It's for the common good." Same argument, different words. Gotta love the collectivist mindset.

|11.10.04 @ 12:44PM|#

Norwood lost a GM assembly plant years ago and never seemed to adjust to the lower tax revenues. I'm not surprised by the scheme to kick people out of their homes.

|11.10.04 @ 12:46PM|#

Joe,
You just brought up another plausible government tactic. The lady that won't sell must pay the taxes as if the property were fully developed. That's an offer you can't refuse.

|11.10.04 @ 12:53PM|#

Josef,

"Who defines a military threat that justifies war?" The Congress of the United States. You can read it in the constitution. It's that congressional power (unused) and the treaties we are a party to that make our attacks on Serbia, Iraq, et. al. legally dubious (not considering morality here, just the legality). And, yes, that does mean that Congress can declare war on just about anyone they please for any reason, although they've only done it 11 times.

"Who defines when an impact is a nuisance?" You answered thus, "If your house was slowly collapsing, and dropping 2x4s onto the sidewalk as people passed, the government would have the right to protect the public." I would only change "right" to "power". In this case, those injured or threatened with injury could take you to court and/or government could seize your property after proving, in a court of law, that you refused to make repairs.

"Who defines when a public speech act incites a riot?" The riot occurs and/or the speaker says, "Now go out there and kick ass!" or "Kill the Jews" or words to that effect and a jury agrees. That's why we have criminal courts.

"Who defines when a contract has been violated?" I would think, a civil court in most cases, unless the parties can agree.

You'll notice that to none of your questions is the answer, "The City Council of Norwood, Ohio decides you aren't paying enough taxes so you find another place to live."

fyodor|11.10.04 @ 1:02PM|#

Well, it means SOMETHING - that you aren't actually losing economic value in the transaction.

As others have pointed out while addressing related issues, economic value is determined by the individual, not by the going price. Therefore it is impossible to say whether an individual is "losing economic value," even if they are paid more than the going price. Ie, economics covers everything that goes into a choice, not just dollars and sense. Y'know, joe, you once claimed that ecnomics professors didn't understand that people were motivated by more than money, to which my response was that that was an extreme misreading of what economics was about. I now wonder if your misreading was downright projection! Some people wouldn't sell their houses for all the money in the world, so being forced to sell it for any price would be "an economic loss."

|11.10.04 @ 1:06PM|#

Joe,
Prices are relative. Why is a rock star's guitar "worth" more than the same model not owned by someone famous? Why would some people never sell the cabin their father built? There is more than the amount of labour put into an item that determines its price. This is why, as Grant said, you can't divorce the property from its owner to determine a "fair market value." Things are worth both what the seller will sell them for and what the buyer is willing to pay.

|11.10.04 @ 1:11PM|#

A prescription for planned diversity is still a prescription. Some people prefer uniformity, without mixing uses and peoples, while others trade the benefits (usually economic) of settling in a new uniform development against the monotony. Over time, the allegedly sterile monotony evolves into individuated diversity. Unless the state uses its power to interrupt the inevitable dynamic process. Such flowering is not the result of planning, but the expression of the natures of the people. Amending the urban soil in preference for a particular kind of growth is an arrogant prejudice, not an enhancement of liberty.

A step toward liberty might be limiting the definition of blight to just those cases where long-term vacancy and lack of upkeep can be demonstrated. Common law has provisions for nuisance and negligence; let the neighbors sue for forfeiture before we resort to the heavy hand of the state. To put blight into only economic terms invites abuse of the kind in Norwood.

The gumball was worth at least ten bucks to the person who paid for it. Unless the goverment required possession of said gumball as condition for some other activity which was the buyers true aim.

fyodor|11.10.04 @ 1:14PM|#

if I can convince somebody that a gumball is worth $10, is that gumball really worth $10?

To that person, yes! That's all "worth" is actually about, what someone else is willing to pay!

That doesn't mean you could convince someone else to pay that. But that just means that worth, like some other stuff, is in the eye of the beholder. Sometimes we talk about it differently, but that's because we're addressing different issues. Certainly a wise buyer will consider his available alternatives when making his choice. But a home is still worth what ever it's worth to its owner, not what it's worth to other owners nearby.

drf|11.10.04 @ 1:17PM|#

"The gumball was worth at least ten bucks to the person who paid for it"

welllllll - probably the gumball was worth more than that to the consumer. because of consumer's surplus and all - remember the h20 in florida? due to quantities demanded, people were willing to pay more than "the market rate" then.

hey fyodor! that reminds me of the financial aid form story:
Q: estimated value of parents
A: sentimental only

:)
drf

fyodor|11.10.04 @ 1:39PM|#

Good one, drf!

|11.10.04 @ 1:42PM|#

The Renquist Court really screwed up in the Barrier Islands case, where they ruled that the government had taken a piece of land, even though they hadn't actually taken it, just changed its value through regulation. This changed the definition of property ownership by eliminating the connection between a person and a parcel, and reducing it to merely a financial relationship.

No it didn't. It recognized that ownership of property can be denied or limited by something falling short of outright seizure. It expanded protections for property rights, and did not debase them at all.

Nice try, joe, but no cigar. At any price.

|11.10.04 @ 1:50PM|#

Eminent domain is already an appalling affront to rights; this power should be lessened and limited, not expanded.

Long-term planning is generally futile, especially in the US, especially when markets (as opposed to purely public lands such as parks for instance) are directly involved.

My evidence: please show me a well-planned community. Was it really *planned*, or did it just happen?

The first principle of those with an interest to plan the future is, would you like the future you think you are creating? Are you building something for your children, or for yourself? This applies to individual planners as well as collectively to a city's decisions.

|11.10.04 @ 2:24PM|#

Someone who uses L'Enfant's name wants an example of a well planned city? Er...ok. Savannah Georgia. Lowell, Massachusetts. Or more recently, Hale Center, Florida.

"Some people prefer uniformity, without mixing uses and peoples, while others trade the benefits (usually economic) of settling in a new uniform development against the monotony." No, this isn't about individual preference. An individual's feelings don't determine the amount he's able to pay for space for his business. A district with a high diversity of costs of space (old buildings getting low rents, new buildings getting high rents; big spaces, small spaces; you know, something for everyone) will attract a broad range of users, while a big project that goes up all at one time, like a mall (whether its creation involved government intervention or not) must initially command high prices for all of its retail space, which limits the breadth of activities that can occur there, and thus the diversity (economic, intellectual, cultural) of the people who work there and the businesses that employ them. Of course everyone would like to a have a place that's in tip top shape, but mom n pops, and small start up businesses, can't afford them. So if you only offer high cost, high quality space, you end up without the real diversity and cross pollination that drives our innovation-based economy.

"Over time, the allegedly sterile monotony evolves into individuated diversity." Over time, sometimes. But if you eliminate this diversity, and impose a uniform order, you are condemning the district to the uniformity for decades. And what's more likely to happen is that the shopping center that replaced the diversity of storefronts goes from uniformly high cost to uniformly medium cost to uniformly crummy. It's best not to screw around with the messy diversity of "organically grown" districts unless there are extreme circumstances, and even then it's best to do light-touch "weeding," rather than broad clearance. This, btw, also reduces the likelihood of taking a property that from an unwilling seller, since you have more freedom to work around him.

|11.10.04 @ 2:41PM|#

And Dynamist, you're assertion of the inevitability of renaissance in distressed areas just isn't how the real world works, regardless of what your model predicts. There is such a thing as a death spiral for city districts, in which the blighted condition of all the rest of the properties precludes the possibility of investment in one property generating a reasonable return. This is what's known as blight, not simply an aesthetic judgement about how some buildings look.

Fabius, you ducked the issue. Congress has to make a judgement call about war. Sometimes, it will get it wrong. When a building is in bad shape, what justified declaring it a nuisance - falling 2x4s? Falling paint chips? Broken windows that invite trespass? Again, a judgement call. You admit that a jury must make a judgement call in the case of inciting a riot, so I'll congratulate you on getting the point.

Pointing out that blight declarations are judgement calls no more makes them illegitimate than pointing out that Congress must make a judgement call in case of war makes that power illegitimate.

Now, do any of you have the sack to argue that the government SHOULD assess crummy ranch houses as $2 million, if that's what the emotionally-attached owner would need to agree to sell? Why is the government's assessment of the property's market value more accurate in that case, but not in other cases?

|11.10.04 @ 2:53PM|#

Dynamist is right, though, that describing blight as being only about economics is incorrect. That was sloppy phrasing on my part. Blight is about the dynamics of urban development, of which economics is only factor.

Analyzing this only as economic differentials ignores the unique characteristics of real estate, and the unique bonds that exist between people and places. A parcel of land is not a stock certificate or a collection of data in a bank's computer room.

|11.10.04 @ 2:54PM|#

To all those arguing about "market value" for property:

You're both right and wrong. The market value of a property cannot be accurately determined without taking into account what the property owner is willing to accept for his property. However, the government cannot use this value in determining what it will pay in eminent domain cases. Why? Because that would encourage property owners to demand exorbitant prices for their land, even if they would be willing to accept a lower value in a free market. Think about it. How many people would, as joe said, demand a million dollars a square foot? And if the government needed that property to build a road, and had to buy it at "fair market price," no roads would ever be built.

This is a strong argument for limited use of eminent domain. Unlike some, I think there is a legitimate use for this power. But it should be limited for this very reason. It's a situation where you either have a monopoly or a monopsony, and in either case "market value" has very little meaning. This is a clear abuse of eminent domain, as are (in my opinion) almost all condemnations for "blight." But you can easily go too far in the opposite direction.

This is not an aesthetic issue - something doesnt' become blighted because it is ugly. This is an issue of economics, and the deleterious effects that vacant, deteriorating properties can have on the properties around them, and the district as a whole.

This just begs the question as to why the government is deciding that this area should be much nicer, and thus is blighted. Maybe it's "blighted" because no one wants to live there, for good reason. Why is the government involved in deciding that more people "should" be living in a district, or that its economy should be more "lively"? Just let people live their lives, rather than spending a bunch of taxpayer money so that a city can fit some planner's vision of how it "should" be.

No, this isn't about individual preference. An individual's feelings don't determine the amount he's able to pay for space for his business. A district with a high diversity of costs of space (old buildings getting low rents, new buildings getting high rents; big spaces, small spaces; you know, something for everyone) will attract a broad range of users, while a big project that goes up all at one time, like a mall (whether its creation involved government intervention or not) must initially command high prices for all of its retail space, which limits the breadth of activities that can occur there, and thus the diversity (economic, intellectual, cultural) of the people who work there and the businesses that employ them. Of course everyone would like to a have a place that's in tip top shape, but mom n pops, and small start up businesses, can't afford them. So if you only offer high cost, high quality space, you end up without the real diversity and cross pollination that drives our innovation-based economy.

The question here is, why do high- and low-cost areas have to be mixed in the same district? Why can you not have a high-cost district and a low-cost? There's absolutely nothing wrong with liking cookie-cutter shopping malls and fast-food restaurants. A "sprawling" area is just as organic as an old neighborhood with all those wonderful mixed uses. It might not fit your sense of aesthetics as well, but that doesn't mean that it's wrong or bad. I happen to much prefer living in suburbia with all of its flaws, however much I hate sitting in traffic. Given all the tradeoffs, "sprawl" is much preferable to a densely populated area for me. I wouldn't want to live in an area planned according to your principles, and a lot of other people I know would feel the same way. Why not let us do so, and let the market sort out preferences?

|11.10.04 @ 2:55PM|#

A mall is a different beast than a community or a district. The mall, being owned by a single entity, may be the uniform public square, as the owner wishes. A lessor is free to figure out if he can pay the rent, or if he should lease in a "blighted area" until his fortunes build. The state, guided by planners, or developers aided by state power are frequently responsible for the elimination of low-cost space. As you've written, one can't build new, inexpensive square feet.

"Condemning to uniformity" shows prejudice. Some people want uniformity. And why is waiting decades for free actors to reveal their preferences a problem? Do you have something to prove, or are you certain of what is the best future? As you throw your shoulder out patting yourself on the back about Lowell, remember that "light-touch" weeding relies on state coercion as its Garden Weasel.

If it is best not to screw around with organic development, of what benefit are public planners?

fyodor|11.10.04 @ 3:12PM|#

You're both right and wrong. The market value of a property cannot be accurately determined without taking into account what the property owner is willing to accept for his property. However, the government cannot use this value in determining what it will pay in eminent domain cases. Why? Because that would encourage property owners to demand exorbitant prices for their land, even if they would be willing to accept a lower value in a free market.

True enough.

And...

Now, do any of you have the sack to argue that the government SHOULD assess crummy ranch houses as $2 million, if that's what the emotionally-attached owner would need to agree to sell?

No.

But our point is that "just compensation" never really makes emminent domain seizure a good deal.

Now, for some folks, that makes emminent domain seizure unjust, period, despite that it's allowed in the Constitution.

For others, it means the government had better had a damn good reason for it.

Either way, the point is that you can't just point to "just compensation" and say, so what.

Joe, in previous threads you've said, hey, I'm just raising a point for the sake of intellectual honesty, I'm not going with it where you're accusing me of going (such as with the "supersizing" issue).

Well, ditto here. Whatever any of us concludes about emminent domain, our point is that what you can't conclude is that as long as "just compensation" in the Constitutionally required sense is satisfied, that no injustice is being done to the homeowner. Joe, you seem to think that the only reason not to invoke emminent domain is if it's bad planning. Our position is that because it should only be done when very necessary if at all.

Now, if and when it's done, the government should try its best to offer "just compensation" based on the limited and imperfect criteria that are available. Just don't pretend this is a perfectly good outcome for all seized property owners.

fyodor|11.10.04 @ 3:17PM|#

"had" should have been "have"

strike that extra "because"

And fire my damn editor!!!

|11.10.04 @ 3:17PM|#

grylliade: Owners may demand a million, but the market price is what they actually sell for. There is an incentive for a seller to resist and hold out, and there are non-government solutions to address that issue (no deal until all sign, social persuasion, profit-sharing...).

Private tollways are counterevidence to your road example. Is the government a necessary partner in providing transportation?

|11.10.04 @ 3:26PM|#

How many people would, as joe said, demand a million dollars a square foot? And if the government needed that property to build a road, and had to buy it at "fair market price," no roads would ever be built.

History shows that the number of people demanding such a price is well below 100%. I'm indirectly involved in such a "buyout" right now, the difference being the party who wants to buy out the properties is a private developer who is not asking the government for assistance. The final holdout is a personal friend, the attorney for the developer trying to buy is also a personal friend (I love coincidences). The attorney told the holdout "You can do what you want, of course. But realize that the development will proceed, they will just have to build around your property. You will just have a large clinic running 24 hours a day as your next door neighbors." An honest assessment of the situation. The hold-out was none too happy, and over time both parties agreed to a price, the homeowner knew he had some leverage, but didn't hold all the cards. In some cases the other property owners were glad to sell at a modest profit and move on, others were not so eager.

This is in fact how most roads get built, it was excatly how most of Chicago's elevated system was built. "Building around" is a common occurrence, eminent domain is the cheap (tax-payer funded) way out.

|11.10.04 @ 3:44PM|#

grylliade, you've got some definitional problems. There is ALWAYS a good reason why areas become blighted. Blight is not a situation in which a certain neighborhood, or a certain housing type, becomes unfasionable, and can only command low rents, and low income people move in. That is natural, organic change, and should left well enough alone. Places go into and come out of those cycles all the time. Declaring a lower income neighborhood blighted just because it is lower income, and not highly desireable in its current condition, is an abuse of the blight designation.

Blight is about a large scale disruption that so distorts the real estate market that it cannot settle at an equilibrium, and will continue falling. An example would be a mill district, in which abandoned, polluted mill buildings cover 50% of the land. With the loss of the hundreds of jobs, the economic base supporting the neighborhood businesses drove them out of business, or at least put them decades behind on maintenance. The buildings could not command the rents necessary to justify their maintenance, so they're in bad condition too. Given the loss of jobs, the continued deterioration of the building stock, and the fall in spending power of the remaining residents, no new investment is attracted to the area, causing more buildings to be abandoned. Blight is a vicious cycle, not simply a step down in "liveliness." And it creeps, sucking in the next few streets, then the next few, and on and on. Often, as in the case of the St. Louis or Detroit metro areas, this process continues in central cities even as the economy expands in the region as a whole. By its very nature, it cannot be solved by the natural play of the market, because nothing one homeowner can do will arrest the process, and the "good reasons" that exist for people not to live there are also good reasons that private investors avoid it.

Allowing blight to spread across a city is entirely natural. So is allowing fires to spread from building to building, except blight takes a little longer. It doesn't take a planning degree to recognize that a self-sustaining process that systematically destroys the economic value of each abutting property in turn needs to arrested.

|11.10.04 @ 3:53PM|#

"The question here is, why do high- and low-cost areas have to be mixed in the same district? Why can you not have a high-cost district and a low-cost?"

Because the peripheral benefits of mutually supportive businesses, spinoffs, and innovation are drastically curtailed if you don't have the mixture of types. Do you really not understand why organically-created downtowns do better than those that were cleared and renewed? It's about the dynamism of messy, uncoordinated business, versus the stasis of rigidly planned commercial districts. This is a dynamic I would have expected libertarians to get instinctively.

"A "sprawling" area is just as organic as an old neighborhood with all those wonderful mixed uses." It's not, really. Sprawl development occurs almost exclusively in areas that are zoned for it (as in, most of the United States). When developers are given the choice of more units or fewer on a parcel of land, they choose more. When they are given the choice of entirely residential developments, or the inclusion of commercial, they include the higher-paying commercial. Go figure.

I'd be thrilled to let the market determine the sizes of lots in subdivisions, and whether stores go in at the intersections of arterial streets. But if it did, your neighborhood would look a lot more like the planned developments you so kindly attribute to me, and a lot less like sprawl as you know it.

|11.10.04 @ 4:10PM|#

Dyanmist gets the definition of "blighter area" wrong, too. Blighted and low rent are not equivalent terms. There are many, many thriving, dynamic commercial districts that have mainly a low-rent tenancy. This conflation of "not rich" with "failed" lies behind most of the planning atrocities that plagued the urban renewal area.

"If it is best not to screw around with organic development, of what benefit are public planners?" First, to smooth the transition. You may be ok with two-four generations having a low quality of life, and of the economy have less vitality during that period, but I'm going to make the intolerant, tyrannical, myopic statement that higher quality of life and more economic activity are better.

Second, there are a lot of mistakes to clear up. Sprawl zoning, and its cousin, the mono-use central business district.

Third, the government comes into ownership of, utilizes, and regulates, lots of property. When making decisions about how it goes about its business, it is better for the government to understand the implications of its choices, than to make them blindly.

Fourth, even as the market must, and will, determine what gets built where, there are still site-level decisions to made about design and function. Laying out the parking lot in one manner may reduce the quality of life in the abutting residential district, while laying it out another way might not. Or, the five undeveloped parcels in a new industrial park may produce more jobs and more wealth if the first parcel is developed for a clean office use, compared to if it is developed for an asphalt plant. Or at least, if the asphalt plant is properly screened and its operations prevented from impacting surrounding properties.

Fifth, and this is where the big disagreement lies, I believe people have a right to have a voice in the character of their communities. I believe that the interest of the public needs to be balanced against the interests of each property owner.

|11.10.04 @ 4:17PM|#

Yow, such pissiness, JB! You aren't, but any chance, French, are you?

I am well acquainted with the Lucas case. Had the court ruled that the regulation of this one property did not meet the rational nexus test (the docrtine that there must be a rational nexus between a public purpose, and the law or application of that law) because of the condition of surrounding properties, I would not dispute the ruling, and it would not be a significant case in legal history. But the issue that they created, that I'm complaining about, is completely unrelated to the specific application's reasonableness.

They could have ruled on rational nexus, but chose to invent out of whole cloth a novel legal concept called "regulatory taking," which basically changes the definition of a thousand year old term in order to get the outcome they wanted in a specific case.

So, yes, I've read the case law. Aced the graduate level course. Disagreeing with you does not make one "fucking stupid."

|11.10.04 @ 4:20PM|#

fyodor writes,

"Joe, you seem to think that the only reason not to invoke emminent domain is if it's bad planning." No, that is not what I think. ED should be used lightly for a plethora of other reasons. You're reading into my statements ideas that aren't there.

"Our position is that because it should only be done when very necessary if at all." That is my position as well. We just differ on the definition of "very necessary."

|11.10.04 @ 5:04PM|#

Josef,

Wow! All I did was go to lunch and you went to town. Good on you.

I am afraid that we will never agree as I believe that the decisions of a jury or the deliberations of a representative body are completely different in character than the "judgment" of any technocratic planner or a bureacracy taken with the latest fad in "managing the built environment" or whatever it's called these days.

I don't buy the argument that the plans and zoning of the past was all screwed up so we need new plans to correct those mistakes. That being said, the planners are going to win every time because they have a plan and the rest of us (except the contractors, inspectors, developers, etc.) wish to be left alone.

Simply, if you want to take my property for "public use" you had better put a park, a road, a public building or other artifact owned by the state in it's place (and not one that charges admission). It had better not be store, an apartment block, a stadium or some other private place. It's not very nice to take from the poor and give to the rich in the name of a purported higher good.

fyodor|11.10.04 @ 6:03PM|#

joe,

Re-reading your first post, I see that your primary point was that the case referenced in the blog post didn't meet the "public use" criterion, and poor planning was secondary, and so I apologize for misreading you. My defense is that you put so many more pixels into the secondary point that that's what stuck. Plus, you were dismissive of the notion that someone whose home was seized was losing anything as long as the government gave him what his neighbors considered a good price.

|11.10.04 @ 7:07PM|#

The Blight. By next summer, I hope to have finished a movie script, which ends with thousands of yuppies drowning in the ocean.

|11.10.04 @ 7:58PM|#

Doesn't demand influence value? If the city wants it bad enough, they should pay for that demand like anyone else. A woman can get millions of dollars just for getting her ass groped at work, but a prostitute would probably charge you $5 to do the same. What then is the value of an ass-groping?

Certainly a punitive measure is appropriate to discourage the use of eminent domain except where the money at stake is significant.

|11.11.04 @ 12:42AM|#

joe:

"I believe people have a right to have a voice in the character of their communities. I believe that the interest of the public needs to be balanced against the interests of each property owner."

"Voice" sounds nice. But, aren't you really saying that some people have the right to use force to control property that isn't theirs? Also, when this type of injustice is allowed, often those who have influence with government masquerade as what you call the "interest of the public", to use that government to force their will on others.

The "public" is a collection of individuals. The only way that they can fairly express their interests is thru the voluntary action of each, or lack thereof. Often, when government force is used against property owners, many others of the public suffer as well.

|11.11.04 @ 1:04AM|#

there are a lot of mistakes to clear up
Since you are comfortable charging the same class of buffoons who made the mess with its cleanup, you must have voted for Bush as the obvious choice to solve Iraq.

I'm going to make the [vacuous] statement that higher quality of life and more economic activity are better.
Better for those who receive your redistribution, not so much for those who fund it. And it creates a sense of dependence/entitlement if the State is there to bail the town out when the mill closes. Alas, the call center built as the cornerstone of redevelopment fails as forces beyond planner's control shift telemarketing jobs to somewhere else. "We'll just take more from the people on the hill and build some new industry. We deserve decent jobs!"

government comes into ownership of, utilizes, and regulates, lots of property
Further evidence to me that the state is too powerful. Any property owner is wise to hire someone to assess how to use their land in relation to neighbors, so I accept public planners might have a small value. Sadly, public planners do not plan just for state property, but for all property in a political district.

How much of the cycle of blight might we attribute to the deadweight loss of government interference? That old polluted mill can't generate enough income for upkeep, according to modern codes. But if someone was allowed to reuse it without the expense of meeting zoning/safety/health/pollution/pick-your-favorite regs, perhaps it might be serviceable. (Our shitty buildings are better than many third-world buildings. Open the old mill to central Africans who would be tickled with brick walls and a sewer connection) Hidden costs of redevelopment hinder the renewal we all favor.

I'd be thrilled to let the market determine...But if it did, your neighborhood would look a lot more like the planned developments...
So please resign and save the taxpayers the cost of your salary and benefits.

Oh, and those thriving low-rent districts are the ones using IJ to fend off the state's planned "blight reduction" programs. Bring up the definitional confusion at your next convention.

|11.12.04 @ 8:40PM|#

Yes, it "once" was the belief that eminent domain was for the "good of the public"...such as highways, bridges etc etc., but that is no longer the case.
The law of eminent domain has a very broad meaning of text where it has never really been clearly defined in the law.
There are no barriers in this law and now the law has overstepped the boundaries of its original intent of the law.

To give you an example of this. A mayor comes into your home, hand in hand with your neighbor, to "take" your Rembrandt painting...using eminent domain to do so, to help "enhance" the "new museum" that was recently built in the city (where a hundred homes were taken through eminent domain for the land to build this museum) The painting along with many other artifacts that were "taken", will help bring in the tourists and visitors into the new museum. The painting was "taken" under "for the good of the public."
IF we are going to be exercising the idea and expression of "for the good of the public" to bring in a higher tax base, then it wrong for just a few of this so called "public" to be penalized for a failing city or economy. IF it is for the good of the public, then the public as a WHOLE should be held accountable by paying higher taxes and not just a selected few.
A home, business, OR painting can be "considered" a use for public good OR anything else you may have that best fits their needs!! No private property is sacred.

Fair compensation is derived from comparable sales of properties that were recently sold or bought by a willing seller or buyer in the surrounding area of your property that is being "taken." Comparable means the same in likeness or similar.

One home is "taken" by the government usually being taken from an "unwilling party." The other home was sold or bought on the open free market at the free discretion of the seller or buyer to name his price or pay his price... called CHOICE.

One is taken.... the other is sold. There is nothing comparable about this. You cannot compare something that was taken, to something that was sold. This is like comparing..... communism to freedom!!!!!!!!!

|11.12.04 @ 11:08PM|#

In reference to blight in eminent domain actions, in my old neighborhood, a hundred and ten homes were taken under eminent domain for the Boston Red Sox new winter practice stadium..under the guise of "blight." The odd thing about this was that my neighborhood was really not all that bad. What was MUCH worse...was the slums not too far from my neighborhood, about two miles and close to the heart of downtown. Nothing was ever done about THIS "blight."

When they "take" you.. it is because it is EXACTLY where they WANT to be!! Prime property!!

Eminent domain.. in the name of higher tax base has become "abusive eminent domain" where the government is using strong arm tactics, threats, intimidation, harassment and force.

I know... my husband, children and I probably went through one of the most abusive cases of eminent domain on record of recent times. We were put out into the street without another home to go to after a judge gave us a twenty-four hour notice to remove ourselves. We did not receive Due Process and everyone knew this...from Washington DC..all the way down the line.

Abusive eminent domain is becoming a very grave issue...for America and the American Dream.