Property Rights

Post-Kelo America: An Optimist's View

Reforms are making progress.

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Given the ever-increasing size and scope of government, it's understandable for those of us who care about liberty to view the legislative process with cynicism. But sometimes that cynicism can blind us to real successes when lawmakers try to initiate reform.

Such is the case with the legislative response to the Supreme Court's terrible 2005 decision in Kelo v. City of New London, in which the Court declared that local governments can use eminent domain to transfer property from to someone who promises to make more money with the land. The backlash against that decision has been, and continues to be, amazingly successful. To date, it has produced 38 laws addressing the abuse of eminent domain for private development. Most of those laws provide significant and substantial limits on that abuse.

Recently in Reason Online, Professor Ilya Somin of George Mason University suggested that many of those laws have been watered down and ineffective. He argues that, because of public ignorance of what constitutes effective reform, most reforms provide little or no protection to home and small business owners.

He might be overly cynical. For example, Somin states that only 14 states have provided significantly increased protections for property rights. But that's just not true. Most Kelo reforms (both from state legislatures and from citizen-driven initiatives) have been strong. For example, the vast majority of cases where eminent domain is used for private development involve dubious "blight" designations—i.e., labeling perfectly fine homes and businesses as "blighted" as a pretext for condemnation. Twenty state laws have either eliminated private-use condemnations for "blight" or defined the term so narrowly that it can't be a vehicle for abuse. Five of those states—Pennsylvania, Kansas, Michigan, Florida, and Virginia—were, according to data collected by the Institute for Justice, among the top eight abusers of eminent domain pre-Kelo. (The other states with blight reforms are Alabama, Arizona, Georgia, Indiana, Louisiana, Minnesota, New Hampshire, New Mexico, North Dakota, Oregon, South Carolina, South Dakota, Utah, Wisconsin, and Wyoming.)

In addition, 19 laws require blight designations to be on a property-by-property basis, rather than an area-wide one, thus preventing "blight gerrymandering." And several new laws shift the burden of proving "public use" in condemnation actions from property owners to the government. For litigators, these changes represent dramatic improvements.

Then there are the laws that say "economic development" is not a public use but do not address condemnations for "blight." It is way too early to deem those bills ineffective. They certainly may cause cities to hesitate before undertaking private-use condemnations, and they probably will make it more difficult. For example, Texas' legislation, which Somin finds lacking, eliminates judicial deference to legislative determinations of "public use." Eminent domain laws in Texas and most states were horrible for property owners before Kelo, so even modest improvements put home and business owners in a better position than before. Furthermore, just because the initial reforms a state passes are "weak" doesn't mean that stronger reforms will not be passed later. When Alabama first enacted reform, it still allowed condemnations for "blight" under a wide definition of that term. But the legislature later closed that loophole. Texas and Ohio may be following in Alabama's footsteps by strengthening their initial reforms. It is also notable that some states that failed to pass any reforms last year, such as Virginia and New Mexico, passed strong ones this year. And the Kelo backlash was powerful enough to overcome gubernatorial vetoes in Arizona, New Mexico, and Iowa.

The passage of 38 eminent domain reform bills—again, most of which are strong—has taken place in the span of less than two years, and more reforms may be on the way. Even more remarkably, these reforms have been passed despite the fact that powerful interest groups—developers,planners, municipal officials—have fought desperately to preserve their power. Indeed, given their tremendous influence, as well as the fact that ordinary home and business owners don't have lobbyists or special access, the question Somin and other critics of these reforms should be asking is: "How on earth did the Kelo backlash meet with such success?" For some broader historical perspective, they might then ask what other national reform movement has achieved so much in such a short period of time.

It's also important to remember that the Kelo backlash has manifested itself in powerful ways outside the legislative arena. Eminent domain abuse remains a wildly unpopular policy choice for local governments and developers in the wake of Kelo. Moreover, since the decision, the state supreme courts of Ohio and Oklahoma have rejected Kelo under their respective state constitutions. And the state supreme courts of Maryland, Rhode Island, and South Dakota have cast doubt on its viability. These victories reinforce legislative gains, and can help pave the way for further reforms (as may be the case in Ohio).

Passing good eminent domain reform legislation has been, and continues to be, a difficult endeavor. But while it's important to separate productive reforms from merely symbolic ones, it's also important that we not let pessimism cloud over the reform movement's successes.

Bert Gall is a senior attorney with the Institute for Justice.

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