Post-Kelo America
Assessing the progress of eminent domain reform.
The Supreme Court's 2005 decision in Kelo v. City of New London generated a massive political backlash. Kelo endorsed the condemnation of private property for transfer to other private owners in order to promote "economic development." The Fifth Amendment's requirement that such seizures must be for a "public use" can be satisfied, the Court ruled, by virtually any claim that there might be some sort of public benefit. Polls show that 80 to 95 percent of Americans oppose the decision, including overwhelming majorities of Democrats, Republicans, women, men, and members of every major racial group. Many observers, such as Judge Richard Posner, predicted that the political response to Kelo would be so strong that it could obviate the need for judicial protection of property rights. Some states have made real progress. But the Kelo backlash hasn't been nearly as effective as many expected.
Nearly every state legislature has either adopted or considered legislation to curb eminent domain, but only 14 have enacted laws that actually provide significantly increased protection for property rights. Seventeen states have passed laws that purport to restrict eminent domain but actually accomplish very little. Texas, for example, banned "economic development" takings, but it continues to permit them under other names, such as "community development." The most common tactic—used in some 15 states' post-Kelo laws—is to allow economic development condemnations to continue under the guise of alleviating "blight." While it may sometimes be desirable to use eminent domain to transform severely dilapidated areas, many states define "blight" so broadly that almost any neighborhood qualifies. A 2003 Nevada Supreme Court decision, for example, concluded that downtown Las Vegas is blighted. Similarly, a 2001 New York appellate decision held that Times Square is blighted, paving the way for the condemnation of property to build a new headquarters for The New York Times.
What's more, the states in most need of reform tend to be the least willing to adopt it. Consider the 20 states that have the largest numbers of Kelo-like condemnations, according to data compiled by the Institute for Justice, the public interest law firm that represented the property owners in Kelo. Thirteen of them have enacted either ineffective legislation or none at all. Moreover, two of the states with otherwise effective reforms exempted the parts of those states where most condemnations occur. Pennsylvania's reform includes a five-year exemption for Philadelphia and Pittsburgh, and Minnesota's exempts the Twin Cities area, also for five years. By then, the political uproar over Kelo will likely have subsided, making it easier to extend the exemptions without much public scrutiny.
Similar shortcomings have bedeviled reform efforts at the federal level. President Bush's June 23, 2006, executive order on Kelo, for example, banned the use of eminent domain for "private development," but allowed takings for private owners who promise to use the land for both private and "public" development. This is the exact argument accepted by the Supreme Court in Kelo, and therefore does little to mitigate the decision's reach. Legislation enacted by Congress in 2005 has been similarly ineffective.
Generally, reforms enacted by referendum have been more effective than those enacted through the legislative process. In 2006, voters in 12 states considered anti-Kelo initiatives that sought to ban or curtail the condemnation of private property in order to promote "economic development." Ten of the 12 passed, all by lopsided margins. The only two that failed were proposals in California and Idaho that were tied to complex and controversial "regulatory takings" laws that roped in other of types of government regulations. Of the 10 initiatives that passed, at least six (Arizona, Florida, Louisiana, Nevada, North Dakota, and Oregon) and possibly a seventh (Michigan) are worded strongly enough to provide real protection for property owners beyond that provided by preexisting law.
Why has the Kelo backlash fallen short in so many state legislatures? Some blame the political power of development interests and local politicians who benefit from condemnations. While these groups have indeed spearheaded opposition to reform, the bigger problem is probably public ignorance. It takes specialized knowledge to distinguish an effective "anti-Kelo" bill from one that's mostly for show. Most voters lack both the ability and the incentive to scrutinize such details closely. Surveys show that most citizens are often unaware of even basic facts about politics, and eminent domain is unlikely to be an exception to this rule.
Developers and other interest groups, by contrast, have far superior knowledge about the details of legislation and strong incentives to keep track of them. Thus, politicians can satisfy voters angered by Kelo by passing laws to "reverse" it, while simultaneously avoiding the ire of development interests by not giving those laws teeth. This dynamic will likely get stronger as the anger generated by Kelo wanes and public attention shifts to other issues.
Referendum initiatives tend to be more effective than most legislative reforms because they're often drafted by activists instead of politicians. Property rights activists don't need to appease powerful pro-condemnation interest groups. Four of the six clearly effective post-Kelo initiatives were drafted by property rights advocates in states where referendum questions can get on the ballot without first being approved by the state legislature. By contrast, the three relatively ineffective new laws were submitted to voters by state legislatures, and suffered from the same flaws as other legislative reforms.
Referenda are far from a panacea for Kelo. Several of the initiatives enacted last fall are flawed, and 26 states do not permit lawmaking by referendum at all. There is also the danger of pro-condemnation forces using the referendum process for their own purposes. For example, the California League of Cities (CLC), a coalition of local governments seeking to preserve their power to condemn property, is currently trying to place an essentially meaningless eminent domain "reform" on the state's November ballot as a way of preempting a stronger referendum initiative sponsored by property rights advocates. The CLC initiative cleverly includes a provision stating that it would supersede any other eminent domain referendum enacted on the same day, so long as the latter gets fewer votes than the CLC proposal.
The political response to Kelo has led to some important reforms. But it has also led to the enactment of a great many ineffective or meaningless laws. Further progress requires us to understand both the successes and the failures of the Kelo backlash.
Ilya Somin is an assistant professor at George Mason University School of Law. He has written several pro bono amicus briefs in takings cases for the Institute for Justice. He also wrote an amicus brief in the Kelo case itself, on behalf of the late urban policy theorist Jane Jacobs. He writes regularly for the Volokh Conspiracy weblog.
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