New Jersey Legislators Send Weak Eminent Domain Reform to the Governor

This week, New Jersey lawmakers sent legislation to Governor Chris Christie that would reform the state's eminent domain laws. If Christie signs, New Jersey would become the 45th state to pass reforms since the U.S. Supreme Court ruled against homeowners in Kelo v. New London in 2005.

Unfortunately, the legislation provides scant protections for property owners. The companion bills (S-2447 and A-3615) each allow local officials wide latitude to declare property blighted, which authorizes the use of eminent domain for private redevelopment projects.

The bills do provide for "non-condemnation redevelopment areas," which allow developers to access the subsidies that come with a redevelopment designation—without granting eminent domain. That option is very much in demand; property owners often don't oppose redevelopment if the power of eminent domain is removed.

But, weirdly, the bills allow for turning a non-condemnation area into a condemnation area when a property owner is unwilling to sell to officials' preferred developer. Sort of negates the whole point.  

The legislation purports to codify a 2007 state Supreme Court ruling that made it more difficult to declare property blighted. Paulsboro officials had argued that their belief that a piece of land was not being put to the best and highest use was enough to warrant a blight designation. The judges disagreed.   

But it will remain very easy for officials to label an area blighted. If an unstated number of properties in a neighborhood exhibit "faulty arrangement or design," "excessive land coverage," "obsolete layouts," "diverse ownership," or other criteria that have nothing to do with public health and safety, officials can create a condemnation area.   

Until a few years ago, New Jersey cities were some of the most zealous abusers of eminent domain in the country. Drive up the turnpike 10 years ago and practically every city you passed was seizing private property for redevelopment. (Camden? Check. Carteret? Check. Newark? Check. Jersey City? Englewood? Lawnside? Highland Park? Check check check check.)

Some combination of the 2007 ruling, the recession, and public disgust with the practice seems to have dampened enthusiasm for condemnation, however. Officials in Atlantic City are mulling over the only active plan I could find: replacing 62 homes with luxury condos and high-end retail to complement Revel, a casino that emerged from bankruptcy last month.

The new legislation does not protect those homeowners. Perhaps the courts will.

In other New Jersey eminent domain news, the U.S. Supreme Court decided this week to consider whether officials in Mount Holly discriminated against the residents of a mostly minority neighborhood now mostly demolished via eminent domain.

The Pacific Legal Foundation, which filed an amicus brief in the case, has a good write-up of the legal issues at play here.