Even "Good" Eminent Domain Can be Pretty Bad

Former reason staffer Matt Welch, writing from his current perch at the Los Angeles Times, uses a local example to explain how even "good" eminent domain--that is, for such clearly "public" purposes as public schools--can still be pretty rotten as it destroys long-lasting low-income neighborhoods.

Comments

[Lamar]

By "Good" I assume you mean "somewhat less stinky"

[Brian Doherty]

In the post-Kelo era it seems to me many (non-hardcore-libertarians) make distinctions between the clearly "bad" ed of the Kelo variety (rank giveaways to private interests) and the acceptable, "good" kind that are actually for "public" purposes....thus the distinction. It's all bad to me.

[Ken Shultz]

It's a practice that can't be done well.

At its very best, it's a necessary evil.

[joe]

Welch brings up the disproportionate harm done to poor people when they are forced to relocate, and the presence of vacant office buildings that could have been taken instead.

I can make a good liberal case for why taking a different piece of land that avoided this harm would be worth spending extra tax dollars - we should go out of way to protect the poor, even at a cost of more government spending; people's personal property that have a humane relationship with is qualitatively different from property that own only in an economic sense; the cultural diversity provided by ethnic communities provides a value that all of society has an interest in maintaining.

What's the libertarian case for spending more money to avoid displacing these residents? Donald Trump is having his office space "stolen" just assuredly as these people are having their homes "stolen," no?

[Cracker\'s Boy]

Did you see the photos? Thank God they're flattening that piece of urban blight!

CB

[Matt Welch]

joe -- I won't speak to the libertarian argument per se, but in the LAUSD specifically, they have passed up *abandoned* properties such as huge empty parking lots, and/or for-sale business properties (as in this case), and also abandoned brownfields, all precisely *because* they presumed it would cost more money than booting out a bunch of working-class folks.

My preference would be that, as long as we're using this tool, we make sure A) we need to (very questionable in the specific case; and B) it involves the least number of tenant-owners as possible, and C) it sniffs out properties that are for sale.

[RC]

From the end of the article:

we need to ask whether the ring of power was really necessary this time, or if it's turning us toward the dark side.

Isn't that, like, a horrible, horrible pop-culture mixed metaphor?

My Sith lord could kick your Ringwraith's ass any day.

[T]

"Good" eminent domain? Is that like "good" rape? Or "good" torture?

Eminent domain is the last vestige of the divine right of kings and should be abolished like we did with the rest of the monarchical bullsh*t.

[joe]

Another good point, Matt, would be to note that the hassles and the inflated prices typically paid in eminent domain takings (to avoid the hassles and delays) drive up the overall cost of the property, compared to the consensual purchase of a piece of property that has a higher book value.

[georgeh]

The only 'good' eminent domain I can think of would be taking a mile wide strip along the non-urban parts of the Mexican and Canadian Borders, and a few blocks through all cities and towns.

[Ken Shultz]

"Another good point, Matt, would be to note that the hassles and the inflated prices typically paid in eminent domain takings (to avoid the hassles and delays) drive up the overall cost of the property, compared to the consensual purchase of a piece of property that has a higher book value."

Speaking to other people who have had to deal with that, I'd have to say that has not been the experience of the people I've spoken too. ...although most of that's been undeveloped land.

I'm sorry, but from what I've heard that just isn't the case. People resist selling undeveloped land to school districts precisely because the districts aren't willing to pay the market price.

[Matt Welch]

Isn't that, like, a horrible, horrible pop-culture mixed metaphor?

Tim Cavanaugh was involved in the editing of this piece.

Another good point, Matt, would be to note that the hassles and the inflated prices typically paid in eminent domain takings (to avoid the hassles and delays) drive up the overall cost of the property, compared to the consensual purchase of a piece of property that has a higher book value.

I don't believe this was the case here, nor is it (as far as I know) in general. Remember that these properties were in a hyper-inflationary environment -- doubling their value every four years -- and selling was not presented as a choice. I'm guessing that in the gap between the first offer and the payment, the houses' value increased by a non-trivial amount not reflected in the payout. Keep in mind also that this was an immigrant-heavy neighborhood, all the materials were printed in English, etc.

[Tom Crick]

I've heard of school districts mentioning eminent domain in their initial negotiations as an intimidation tactic!

Please.

Q: "Why should we have to pay more PSF than you did?"

A: Well, let's see. We bought umpty ump acres and you want just one--and tiny parcels are more expensive PSF in every market in the world than buying a big chunk in bulk. ...but why talk about every other market in the world--why don't we just talk about what similar sized parcels close for in this market?

Oh, and half the site was unusable until we processed our map through FEMA, an iffy process might I add, and that was reflected in the PSF price when we bought it--now it's fixed and that's value added. Oh, and the piece you want contains the access to the site and enjoys a ton of street frontage, which makes it more valuable. Oh, and the use you want may affect the use we want to develop for, for hundreds of feet around it, making that part of our property only valuable as parking...

...and on, and on...

Q: "Are you familiar with the concept of eminent domain?"

[:-]

Tim Cavanaugh was involved in the editing of this piece.

I was wondering about that. Who edited this gem:

"Though a judge's perhaps-unnecessary stayed the execution temporarily, it's all over but the flattening."

I had to read it five times before I figured it out.

[Ken Shultz]

Also, when you're talking about redevelopment or just undeveloped land, joe, tell me, in your neck of the woods, doesn't the local school district have to sign off on every site plan?

That's kind of an interesting dynamic there, isn't it?

The people you refused to sell to are the very people whose approval you need for your site plan, approval they can theoretically withhold for whatever reason, and they're the ones with the power of eminent domain...

...and we're supposed to assume that they negotiate a market price in good faith?

That's ridiculous.

[joe]

Ken Shultz,

I'll have to take your word for it. I was thinking of taking land with occupied buildings.

I don't get your second question. Sign off on what site plan? For the new school?

[Sal]

It's worse in NY:

http://www.weeklystandard.com/Content/Public/Articles/000/000/013/966pcyug.asp

[Ken Shultz]

It doesn't even have to be a school--let's say it's for a park.

Let's say the city wants your undeveloped land for green space and as a park. They give you a below market offer, and you turn the offer down. The city has the power of eminent domain...

If you were intending to submit plans to the city to build an industrial park on that land... Don't you need the city's approval? Isn't their offer like an offer you can't refuse?

Why would we assume to see cities paying market rates for land under those circumstances?

In other words, it isn't just that the city can take your land if you don't agree with their price, it's also that you can't do anything with the land without their permission even if they don't eminent domain it. ...which probably affects the property's value, even if the owner just wants to sell it!

Is there a definitive study showing that cities overpay for the land they eminent domain? ...'cause given the gun cities can hold to a property owners' head, that would be a shocking revelation.

[joe]

Ken,

Now I understand. Yes, I can see how that could be a problem.

Once again, my comment was in reference to the taking of houses or commercial buildings in built-up areas. The permit-influenced value of the land doesn't really come into play in that circumstance.

[Isaac Bartram]

Ken, I don't know about anywhere else, but in Florida you can go to court to dispute the state's or city's price. Juries* regularly raise awards considerably over the original offer.

On top of that the state pays your legal fees.

Right of way acquisition has gotten so expensive that designers are required to go to extreme lengths to reduce requirements.

Eminent domain is not cheap. The lowest cost comes from a transaction between a willing buyer and seller. The fact is that property owners in Florida never take the state's offer no mater how "fair" it is. They are almost certain to get more through litigation and they have absolutely nothing to lose.

Of all the features that make eminent domain objectionable the idea that the state is somehow getting the land "on the cheap" is not one. Mind you in the Kelo type taking the private developer may indeed be getting the land on the cheap. But then in that case there are actually two victims. The property owner who was forced to sell and the taxpayers who paid higher than market prices for parcels.

Usually when you find a person resisting eminent domain you have someone whose property is simply not for sale at any price. That's why they have to be forced to sell.

*To show how seriously this issue is taken condemnation cases in Florida are the only civil trials that require a twelve person jury.

[Paul]

What's the libertarian case for spending more money to avoid displacing these residents?

There are lots of libertarian arguments for spending more tax money to avoid obliterating the rights of property owners.

For instance, we as a society decide we want certain green spaces preserved for their bucolic charm. We could either a) pay for the pleasure, or b) take everyone's property from them after the fact and tell them they can't use it-- ie leave it in its "natural" state. We tend to choose 'b'.

If "we" are going demand that a given area of a country remain by-god rural, then shouldn't we pay for it?

[joe]

Paul,

That's all quite nice, but the issue on the table is taking land for a school. If a city is going is to spend the taxpayer dollars it coercively stole at gunpoint with force from the productive caste in order to build a satanic public school, is there a libertarian case to be made that it should spend extra money on a more expensive parcel in order to avoid the harms Welch mentioned?

[Mike Laursen]

OK, you can find lots of libertarians that think the government does indeed steal money from productive people at gunpoint, and you can find libertarians that believe public schools are satanic -- but, "the productive caste"? I've never met a libertarian who wanted to limit productivity or prosperity to a particular caste of people -- every single libertarian I've ever talked to has wanted as many people as possible ot be productive and prosperous.

[Mike Laursen]

I'm very familiar with all the eminent domain shenanigans the City of San Jose, California has been involved in. I've never heard of them making a higher-than-market-rate offer.

There's also an awful effect on neighborhoods which have been declared blighted, where the owners lose their incentive to improve their property in any way. This is not theoretical; I've seen it in action.

[Mike Laursen]

is there a libertarian case to be made that it should spend extra money on a more expensive parcel in order to avoid the harms Welch mentioned?

I think there's a libertarian case that more money should be spent to avoid using eminent domain. Maybe, maybe the government needs eminent domain to build things like roads, but it should always be possible to find a way to build a new school without having to seize someone's real estate.