Masters of Eminent Domain

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The good folks over at the DC-based Institute for Justice are fighting against eminent domain abuse–"when government takes land for private not public use"–in the Cincinnati suburb of Norwood. (Full disclosure: I'm an annual supporter of IJ, a 501(c)(3) tax-exempt nonprofit).

The Cincinnati Enquirer's take is here and is illustrative of how such stories are often portrayed in local press. Virtually the whole story is given over to the economic benefits (all estimated, of course, by the private developer and the local government); the protesters are relegated to the final three paragraphs of the piece. The main legal principle at issue–does eminent domain sanction the taking of private property so it can be given over directly to another private party?–disappears in a fog of rosy economic forecasts.

Despite such coverage, IJ has had a tremendous string of successes in such cases. Here's hoping they prevail in Norwood as well. IJ's take on the Norwood case is here.

NEXT: What Would Jefferson Say?

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  1. Matthew, the legal theory is that the public good is the elimination of slums and blight, with the disposition to a private party for redevelopment a peripheral good.

    That’s why this case, in which there is no problem to remedy and the disposition to the developer is the reason for the project, is an abuse of the system.

  2. Kevin,

    How about they form a 501c3, the city takes the properties, and turns the title over to the the new nonprof? I’d love to see that – assuming the nonprof is up to the task.

  3. “like to see occupancy-based ownership of housing, and those vacant lots (withheld from use by absentee owners) used by residents for recreation or growing food.”

    I think this is called “Finders keepers. Losers weepers.” Squatting replaces title. Sounds lovely.

  4. joe:

    Won’t work. Title is the bad guy. A nonprofit exclusion of the masses from the land on which they rightfully could be squatting is no better that the for profit version.

    The mutualist position is a few shades darker than public good version that says, “Oh, of course you have a title to that land, it’s just that the State can take it from you at will, or prevent you from doing anything we want on it. You can’t do anything without our approval, but you still get the piece of paper, so you can’t gripe that we have public ownership of land.”

  5. Kevin, does your idea of occupancy-based ownership distinguish between a landlord who keeps the lawn mowed, they siding painted, and the plumbing working vs. an absentee owner?

    Technically, your idea precludes someone from owning a workshop or store in one location and a house in another.

  6. Kevin Carson,

    Are you against anyone owning a building that other people live in? If your “occupancy-based ownership” is only for “absentee landlords,” at what point are landlords determined to be absentee? Is there some scientific way to determine this?

    Speaking of sceintific determinations, Joe’s scheme is subject to mission creep. Sure, take extreme examples and in one case we can all agree it’s blighted and in the other it’s not. But what about the gray areas in between? And if improving a neighborhood can be a public good (ie, eliminating the slum), at what point does building a Wal-Mart instead of whatever’s there already get to be called a public good as well (and not just a peripheral good)?

  7. “A nonprofit exclusion of the masses from the land on which they rightfully could be squatting is no better that the for profit version.”

    I’m assuming a corporate structure which recognizes all those who establish their rights through occcupation and improvement.

    Kevin, can the owner-occupant of a three decker rent out the other two units in a mutualist world?

  8. Just wanted to point out that the Constitution allows eminent domain seizures for the public USE, not the public GOOD. It’s Constitutional to grab property to build a park open to all and owned by the public, versus grabbing it to build a Six Flags over Blight theme park open to those who pay attendance fees, and owned by stockholders. Even if the Six Flags park would generate more jobs and revenue than the suburban homes it replaced.

  9. Over Easter I was visiting my grandparents who still live in the Chicago suburb I grew up in. They mentioned a big fight in town about a development project, and it sounded to me like eminent domain abuse. A bit of Google, and sure enough:

    http://www.journal-topics.com/business/04/biz040324.1.html

    That’s a cousin of mine who owns the Law Office/Post Office building that’s being condemned. Small world.

  10. Jennifer,

    Publically owned reservoirs are often closed to the public, yet I doubt you’d have any trouble with takings for that purpose. So the question is not whether the public is allowed to occupy the taken property. The demolition of buildings, assembly of parcels, and remediation of environmental hazards are public uses to which the land is put after it is taken. Are you saying the government shouldn’t be allowed to sell land it takes once it no longer needs the land?

  11. Joe-
    Theey words here is publicly-owned. It’s easy to argue why a water reservoir is considered an example of public use. It’s another thing if Poland Spring Company wants to take the land for another bottled-water plant. We NEED public utilities, roads, some military bases, et cetera. We don’t need a Wal-Mart or an office park; at least, not in any one particular spot.

    And your question about the government selling land it no longer needs has no relevance that I can see here. We’re not talking about the government selling an old military base on land it took by eminent domain fifty years ago, we’re talking about government taking land that it NEVER intends to turn to public purpose; instead, it is going to a private business. This principle basically says that any business owner can confiscate any private home, since a business will always generate more taxes and jobs than a single-family home. If that’s the case, why maintain the fiction of property rights at all?

  12. From my previous post: “The demolition of buildings, assembly of parcels, and remediation of environmental hazards are public uses to which the land is put after it is taken.”

    If there is some vital public business to take care of on the land, which is performed by the govt after the taking, why the hell not sell it to Poland Springs, if they’re an interested buyer?

  13. Joe-
    I honestly don’t know where you’re coming from here. Are you saying you support the use of eminent domain to confiscate these people’s homes and turn them into a privately owned business? Your example seems to refer to the government confiscating and cleaning some contaminated site a la Love Canal, which is utterly not the case here.

    The point I am trying to make is that Constitutionally, ED is only acceptable if the public/government is going to directly own and use the property for something necessary for the public. That’s why it could be acceptable to take homes away, if they happen to be in the only valley suitable for a water reservoir. It is NOT allowed to take the homes for a private water-bottler. Or a private office park, or a Wal-Mart, or an amusement park, even though more members of The Public could use those facilities, as opposed to a private home.

  14. Jennifer, I agreed earlier in the thread that this case was an abuse of the system – the alleged need to clear up blight is a bogus pretext for giving the developer the land he wants.

    What I’m asking about is cases in which the system is not being abused, and the government is proposing takings of a genuinely blighted area for the purpose of remediating the problems of blight (defined upthread) or contamination. In such cases, once again, “The demolition of buildings, assembly of parcels, and remediation of environmental hazards are public uses to which the land is put after it is taken.” The disposition of the land takes place after these public projects are carried out thereon.

  15. Joe-
    Oh. Hmm. That is a trickier question, because good and bad are separated by a gray area rather than a clearly-drawn line. If you’re a blighted, neglectful absentee landlord whose abandoned buildings are crime dens, then your property loss could well be excusable. The problem is with those areas which are not blighted–they’re just poor.

    I grew up in Virginia, which was notorious for ED abuses long before the story became a national issue. In fact, there were lawyers who specialized in defending people from ED abuse.

    The city of Norfolk, home of the world’s largest Navy base, has never been a particularly elegant city; at least, not since I’ve known it. However, here and there the city has a couple of gated enclaves of luxurious condos and townhomes which are OUTRAGEOUSLY expensive by the standards of that part of the state. These rich areas came about through ED–the government would condemn an entire neighborhood containing, say, 800 cheap poor-people homes, and replace them with, say, 100 houses affordable only to the area’s upper-upper-middle-class. The Ocean View and Ghent neighborhoods were largely eminent-domained from privately-owned poor person’s homes into apartments for the wealthy.

    Another problem is that many cities are trying to encourage middle-class to move in and “take over” old, crummy neighborhoods, but who would want to take such a risk when their home might be condemned for being in a blighted area?

  16. Yeah, joe, I’d still say that’s wrong.

    Why? Becasue it still invites abuse of the system where the “reason” for the comdemnation is “cleaning up the place” but the reason for the condemnation is that Bob Developer wants real estate at below-market costs.

    You’re saying: what about a case where there is no corruption, a priori ? I’m saying that’s not possible to know in any ED taking.

    So how about a system where in addition to the cash compensation, ED condemnees are given a fully transferrable right of first refusal to their old parcel at the lower of the market price or ED compensation? If the public use is cleaning up the land, then there should be no objectioo at giving the original owners first shot at buying the land back when the government decides it doesn’t need the land anymore.

  17. I ride the bus up from downtown Cincy to Norwood once or twice a month to shop in that shopping center. On one of those trips, I took a camera along and strolled through the disputed area to get an independent view. No shabby or run-down homes were there; quite a few were immaculate and breathtaking. The rest fell into the neat, tidy, or quaint categories. No blight was evident in that area, or for blocks around the disputed triangle. You’ll find real blight in the Cincinnati area, of course — but it always seems to be in those places where nobody wants to build a mall.

  18. Agreed. Come check out where they want to build the Nets stadium in Brooklyn. Some nice pubs, houses and shops would be gone. No blight, just a “neighborhoody” neighborhood, on the chopping block for a stadium.

  19. IJ just raked the local government in a similar case near Cleveland. Here’s hoping they can do the same in the opposite corner of the state.

  20. “You’ll find real blight in the Cincinnati area, of course — but it always seems to be in those places where nobody wants to build a mall.”

    Good point.

    The IJ’s piece raises some interesting questions about blight. “A finding of ?blight? is typically the first step toward eminent domain…?Blight? once implied neighborhoods infested with disease and crime. And it used to mean a significant percentage?say, 80 percent?of buildings in the targeted area were actually in disrepair.”

    Blight has an actual definition, and refers to an actual phenomenon – creeping vacancy and deterioration. A property is abandoned and vacant, so the owners of abutting properties stop keeping up their properties. Then they get deteriorated or abandoned, and so on. It’s just like blight on a potato or a field – you can see the dead area, and its rageddy edges keep creeping further and further into the healthy area. Usually, a blighted area isn’t “seeded” by one bad property owner, so much as the underlying conditions discourage neglect of properties. But what happens is that the vacancy, deterioration, and abandonment (and consequent crime and trash and hazardous conditions) become the defining characteristic of the district, so that even if the area’s economy comes around, capital avoids the blighted district, and it’s stuck in a rut. So the high % of dilapidated buildings aren’t just common in blighted areas, but are in fact the definition.

    By harping on the phoniness of the blight designation, the IJ appears to be grudgingly admitting that eminent domain takings for genuinely blighted areas are appropriate. Imagine a neighborhood with 25 vacant, trash strewn lots, 25 vacant, dilapidated houses (most apartments), 25 occupied (fully or partially) apartment houses in poor condition, and 13 occupied properties in ok condition, and 12 occupied properties in good condition. And the vacancy rates and the area in which buildings are being vacated has been increasing for years. In other words, imagine a genuinely blighted area. In such a case, would it be appropriate for the government to take the district? To take selected properties?

  21. I don’t think IJ rejects all eminent domain; rather I think their underlying points are the following two:

    1. If the government is going to take properties, then regardless of the rationale, it should not simply hand over the property to another private party.

    2. “We can’t afford just compensation” is not a legitimate reason to refrain from compensating property owners whose holdings are being taken.

  22. asq, all eminent domain involves compensation, including this case.

  23. But how much compensation? Local governments actually try to argue that just compensation means “whatever we can afford.”

  24. “In such a case, would it be appropriate for the government to take the district?”

    I believe IJ’s answer would be that the only justification for taking land is to turn it to public use. If the state wants to make an offer to buy, that is another story. This latter option generally takes care of the blight situation, since the landowner can’t have been earning anything on the land anyway.

  25. Where was IJ when our current president got a new ball park for his failing team at public expense through his cronies’ excercise of eminent domain on his behalf?

  26. Can anyone with some knowledge about the rulings that have been handed down explain to me what rationale judges use to allow eminent domain that is blatantly and unquestionably used for transfer of private property from one owner to another? It just seems that the evidence so clearly and obviously shows that this is improper, it’s hard to understand what they’re thinking. Is it mostly about equating private business with the “public good”? Anyone?

  27. Matthew,
    Yes, a lot of it is equating private business with public good. If Walmart builds a new store, then all sort of infgrastructure will get built and more people will move in and then there’s some business revitalization. Of course, it’s primarily at the taxpayers’ expense.

  28. The Constitution says “nor shall private property be taken for public use, without just compensation.” I don’t see a damn thing about taking private property for an office park.

  29. joe,

    I’ll probably catch hell for this, but as a mutualist I think the blighted area you describe is a result mainly of landlordism. I’d like to see occupancy-based ownership of housing, and those vacant lots (withheld from use by absentee owners) used by residents for recreation or growing food.

    Rather than hand the area over to the state, I’d like to see what a grass-roots organization of residents, educated in community technology and neighborhood organizing, could do to improve it for themselves. (Check out Karl Hess’ “Community Technology,” about his experience with the Adams-Morgan Organization, and “Neighborhood Government,” cowritten by Hess and David Morris).

  30. Jennifer, it sounds like you’re saying that whether to us ED to remedy genuinely blighted conditions is a political/policy question, rather than a Constitutional one. Which is pretty much where I stand.

    I hear what you’re saying about how ED has been used in Norfolk. Bad planning, exacerbating a housing crisis. I’m all for bringing middle class and wealthier people back into the city, but the people in those high end ghettos are not really in the city – first the city is cleared out, then the edges are gated off. Sort of misses the point.

    As for your last question, blight/urban renewal designation is meant as a last resort, for those sort of places that have such problems that middle class people (or investors) fixing up the place just isn’t a possibility. If I saw a case where a city was trying to “renew” an area that was attracting private investment, I’d be mighty suspicious.

    tchiers, that’s a fascinating idea. One problem is, the old parcelization scheme is often one of the causes of the blight – you just can’t make development work. Maybe a “right of return” that’s linked to the value of the property, rather than the size, location, and shape of the parcel would be more appropriate.

  31. My point in that last comment was, if a certain land use was desirable enough that an owner with a big buyout check in the bank would wait around for the government to sell it back to him and replace what was demolished, than that land use probably wasn’t blighted to begin with, and probably shouldn’t be taken.

    Unless it was merely the lot’s location, the case of an island of stability in a sea of blight. Frankly, if a residential or business enclave can remain viable in the midst of creeping blight, it’s a treasure that the government should go out of its way to preserve, even if urban renewal is necessary.

    The only way using ED against such a property would be appropriate, is if remediating the surrounding blight required the redesign of the entire neighborhood, and the stable holdouts would prevent the new development scheme from being viable. For example, if there was a bad mix of heavy industry and small homes checkerboarded throughout a neighborhood, so that the area was not viable for either residential or industrial use. One solution would be to draw a line, and buyout the residential properties in the industrial area, and the industrial properties in the residential area. Even if a few of the houses in the industrial area were well kept up, their location could well prevent the creation of parcels big enough for viable industry. In such a case, letting them buy back their old lot would undo the government’s efforts to eliminate the blight caused by undesirable industrial parcels.

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