Public Use and Abuse

The Pacific Legal Foundation and the ACLU of Michigan are asking the Michigan Supreme Court to overrule Poletown, a notorious 20-year-old decision that has fueled eminent domain abuse.

?The consequences of the Poletown decision for property owners across America have been disastrous, especially in low-income neighborhoods,? said PLF attorney Timothy Sandefur. ?It has created an inequitable policy of corporate welfare allowing wealthy and powerful interests to take other people?s land for their own profit usually at the expense of the poor and underrepresented.?

The press release. The brief.

Comments

[richard]

Its about time the ACLU stood up for property rights...on this issue, I wish them nothing but the best.

[Rick Barton]

My sentiment as well! Is Bob Barr influencing them?

[Jason Ligon]

The choice to increase property values in one venue is the choice to decrease them in another. The whole notion of the government acting to protect property values is a frightening concept, because there are all manner of private concerns that determine the price of real estate.

What about voluntary segregation? What if the 'nuisance' you are trying to get rid of is the color of your neighbors? It is a pandora's box to allow the government discretion in this area. Public use means the public will own and use the property, as in a road - period.

[Perry]

Joe,

A few problems with the example:

1) If the area really is low-income, then finding a developer to take on new development is often difficult. The only thing that really happens is that the city ends up subsidizing the front end acquisition costs via ED and then has to subsidize construction costs through low costs loans or bonding or what have you, just to run a 'pet project' through.

Only at times when such a project is a 'kickstart' kind of project where it primes the pump for private development in the neighborhood is it ever the case that these might even be worth doing. Even then, if it truly is a revitalization sort of project, there are always alternate sites that can be used if one owner is absolutely unwilling to sell.

2) 'Fair market value' is rarely if ever offered to people who are about to have their property seized by the govt. The mere act of the govt. having a development plan for someone's site increases the value of the land, which is very rarely if ever considered in the process.

Also, the amount of municipally subsidized legal bills for the inevitable arbitration or other legal processes would almost always have been more than enough money to have gotten the owner to sell his land the normal way in the first place.

More and more often, you have ED used by the municipalities to take viable property just to use it in turn as leverage to attract a 'pet client' (A Wal-Mart or a Home Depot) and justify it is economic development and 'job creation'.

I still don't buy it. You wanna come to the table and build something, then come to the table with enough money to acquire a working site. Otherwise, it is no different than the billions of dollars of subsidies that we give away to sports teams to fund their stadiums.

[joe]

"The choice to increase property values in one venue is the choice to decrease them in another."

Actually, it's not. Locating an unattractive industrial use next to homes will reduce their value, but locating that same use in an industrial park with similar uses will likely not reduce the value of those other uses.

But my example was not about property values. It was about homeowners and their tenants enjoying the quiet use of their property.

[rvman]

Joe: Then those homeowners should get together and make a fair market offer to the owner of the car graveyard/auto shop. If you want to be a moderate, let government do just that. The problem is the use of eminent domain to force the owner to sell, not necessarily the desire to redevelop. The "counter" is that the owner may try to "hold up" the government for more money than the property is worth. If that happens, call his bluff. If he refuses to sell for your price, let him be, or let the locals "chip in" to up the offer. Ownership of adjacent property doesn't imply a right to control the acts on that property, and "externalities" are not limited to politically unfavored businesses. Churches, Home Depots, and schools all produce a lot of problems for the folks who live near them, too.

[joe]

Perry,

"If the area really is low-income, then finding a developer to take on new development is often difficult." Not as difficult as you think. Density can more than make up for median income. There is a lot of money to be made filling apartment buildings will poor people. What scares off developers from these areas is not so much the low median income, but the fear that there will be no return on investment, or that the value of your property will continue to fall.

"Only at times when such a project is a 'kickstart' kind of project where it primes the pump for private development in the neighborhood is it ever the case that these might even be worth doing. Even then, if it truly is a revitalization sort of project, there are always alternate sites that can be used if one owner is absolutely unwilling to sell." In the example I presented, the "kick start" is not the nice new houses, it's the elimination of the nuisance use that's trashing the neighborhood. And is that case, buying out some other use won't do; you have to get rid of the problem.

I agree that determining "fair market value" is difficult, and the process can be costly. Each of these projects needs to be looked at closely in a cost/benefit analysis. But some extra legal fees may well be worth it.

"More and more often, you have ED used by the municipalities to take viable property just to use it in turn as leverage to attract a 'pet client' (A Wal-Mart or a Home Depot) and justify it is economic development and 'job creation'." I agree with you, Reason, Pacific, and the ACLU on this. These benefits do not meet the standards for eminent domain, though I note that the Poletown brief seems to leave open the door to allowing them in cases of "economic emergency." But that's why mine is a COUNTERexample - I'm postulating a taking that relocates an existing business not to achieve general public benefits, but to address an identified harm being visited upon the public.

[joe]

"If that happens, call his bluff. If he refuses to sell for your price, let him be, or let the locals "chip in" to up the offer." Gee, that is calling his bluff. You'd better cooperate, or we'll offer you more money. Wanna play some cards, rvman?

"Ownership of adjacent property doesn't imply a right to control the acts on that property" You have the right to the quiet enjoyment of your property, and the government has the duty to protect that right.

There's one point you all are missing; is there a difference between taking someone's home or shop, vs. taking investment property or a business whose "owner" is a collection of stockholders?

[Perry]

Joe,

Property is property, and once you start delving into the fine grained specifications of whether someone is a 'good' versus a 'bad' absentee landlord, then you start playing social engineering games. Regardless of whether it's the down the street poor grandfather to 12 who owns your property in absentia or a REIT funded by millionaire owners, it doesn't make theft of their proerty for less than market value any different.

But back to your example, there is no way of knowing for sure that one ugly site is what causes the 'trashing' of the neighborhood. There could very well be countless other issues ranging from lack of policing to a lack of sidewalks to poorly defined public/private areas to a proximity to other undesirable uses, or maybe bad school districts and etc. etc. on and on..

I just don't think that it's possible just to justify that this one site is royally ****ing things up and fixing it magically turns things around. Should other solutions increase the property values in the area (as no doubt, they could), the owner would no doubt 'sell out' and move away on his own accord.

"Clearing out the blight" didn't work in large scale when we tried it for urban renewal projects in the 50's, and they still don't work on a smaller scale by themselves now. You can't ever cure a cold by only trying to mitigate the symptoms, and you can't cure urban ills just by eminent domaining them away either.

[Jason Ligon]

"There's one point you all are missing; is there a difference between taking someone's home or shop, vs. taking investment property or a business whose "owner" is a collection of stockholders?"

None. Zero difference. Please remove the quotation marks from the word owner.

[joe]

"Regardless of whether it's the down the street poor grandfather to 12 who owns your property in absentia or a REIT funded by millionaire owners, it doesn't make theft of their proerty for less than market value any different." No one's talking about paying less than market value. This is all predicated on paying market value for takings.

"But back to your example, there is no way of knowing for sure that one ugly site is what causes the 'trashing' of the neighborhood. There could very well be countless other issues ranging from lack of policing to a lack of sidewalks to poorly defined public/private areas to a proximity to other undesirable uses, or maybe bad school districts and etc. etc. on and on." So we can know that these other problems are causing urban blight, but we can never know that an industrial use is bad for a dense residential neighborhood. You're ducking. And you're wrong on the facts.

'"Clearing out the blight" didn't work in large scale when we tried it for urban renewal projects in the 50's, and they still don't work on a smaller scale by themselves now.' There is enormous difference between my example - specifying a specific location and changing it while - and for the purpose of - protecting the fine grained character of the surrounding neighborhood, and the wide scale clearance you (and I, actually) decry. Again, you're ducking.

"You can't ever cure a cold by only trying to mitigate the symptoms, and you can't cure urban ills just by eminent domaining them away either." Sometimes a nuisance use is the cold, and the other problems in the neighborhood are symptoms. And hey, you want me to spread around some money on parks and crosswalks, you got it.

OK, now I'm just starting shit.

[speedwell]

I totally agree that eminent domain abuses should be stopped and I'm glad the effort to stop them has attracted powerful support.

But, to belabor the obvious, the ACLU would never get involved to protect the property rights of the wealthy.

(I'm mentioning this more to reinforce my decision to stop sending the ACLU money than for any other reason.)

[rst]

protect the property rights of the wealthy.

Fortunately for the wealthy they can buy rights which they are otherwise not afforded.

[Franklin Harris]

Note that the ACLU's real problem isn't the abuse of eminent domain but the fact that such abuse is "inequitable." Oh, if only we were all equally abused....

[ed]

Rights can be purchased, rst? Which ones?

[Kevin Carson]

Franklin Harris and speedwell,

The government being used by wealthy and powerful interests to enrich themselves at the expense of the poor and underrepresented? Sounds like a dog bites man story to me.

I doubt you can find very many cases in which the poor control the government and are using it to oppress the rich and powerful. Most such alleged cases turn out actually to be just the reverse. For example, I suspect it was Cargill and ADM, and not welfare moms, who had the lion's share of influence over Bob Dole's love child, the Food Stamp program.

[Trey]

Ed,

I can buy the right to live in your home...
if it's for sale for a dollar!

[Jason Ligon]

In true democratic fashion, the people who vote use the government to extract wealth from the people who don't.

See the ACLU for a reminder. They are hardly the super wealthy (though they are better off than they would have you believe), but they have arranged the largest transfer of wealth in history because of their voting power.

Fear not the NRA ...

[Jason Ligon]

Okay, that was dumb, I was thinking about the last item. Replace ACLU with AARP in the above.

Zoiks.

[joe]

I've got a counter-example for you.

A dense, low income residential neighborhood, with an obnoxious industrial use (car graveyard, or smelly, noisy autobody shop, or some such). Property values plummet, buildings aren't maintained, owners-occupants sell to absentee landlords, old story of urban blight.

The city condemns the property of the industrial user, giving him fair market value for the land. The city then clears up contamination issues, and sells the land for residential development, with some affordability restrictions on some of the homes. The surrounding neighborhood improves, because it's now a nicer place to live. The benefit accrues to the most relevant public imaginable - those who have to live next to the industrial use.

Is the elimination of a nuisance use in a specific area a public good?

[ed]

Sorry, Trey, it's not, so you can't.

[kevrob]

Eliminating a local "nuisance" can often be problematic. The Institure for Justice recently won an ED case in Pittsburgh, where a municipal body wanted to take a car repair shop, in order to bring in another commercial entity.

It is often important WHEN the residential development started. If the homes and apartments went up after whatever noxious business being complained about was established, then telling the senior resident of the neighborhood that it has to move is unjust. There may be no good site for Fat Jack's Rendering Plant anywhere else in the metro area, especially not at the price he'll get from the city for his old place. If residential use predates whatever annoying business is to be bought out, that is another thing entire. Let's say I changed my corner "shot & a beer" tavern into a hip club. Traffic in the nabe increases, I've done a poor job making provision for extra parking, and people are finding it hard to get in and out of their driveways, or worse, can't find the on-street parking they depend on. That is a case of a business causing inconvenience to its neighbors, after they have committed to mortgages and leases.

Rule of thumb: if you move next to the airport, don't be surprised if that empty lot across the street is scheduled to be turned into a runway five years from the day you close on the house. If your title-search firm and your lawyer don't know how your and your neighbors' plots are zoned, encumbered by covenants, or affected by master plans, they ain't doing the job you hired them for.

Needless to say, if you find all this out, you are in the clear, and you buy, and then 10 years in the Airport Commission decides they would really like to take your house, they should have to pay the going rate.

Kevin

[Will Spencer]

"Property must be secured or liberty cannot exist." -- John Adams

"The system of private property is the most important guaranty of freedom, not only for those who own property, but scarcely less for those who do not." -- Friedrich Hayek

"It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder. But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime." -- Frederic Bastiat

[joe]

"Eliminating a local "nuisance" can often be problematic. The Institure for Justice recently won an ED case in Pittsburgh, where a municipal body wanted to take a car repair shop, in order to bring in another commercial entity."

That was a clear misapplication of the law. There need to be better protections to avoid abuse. But you don't disband the Army because of Lt. Calley. There are always nightmare stories (from the free market, too!), but we should be basing our laws on evidence and principles, not anecdotes.

[O RICHARD]

The constitution says "just compensation" not fair market value....the just compensation for property taken in ed for private purposes would be much higher than the "fair market value" If the city and private developers are going to become partners they should be including the people who own the property and the owners should be getting a cut of the action......not so much like the native americans, the governement, and the modern day calvery "the developers"

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