Property Rights

Judge Halts Indiana Town's Cruel Attempt to Fine Residents Out of their Properties

Property owners were ordered to pay thousands for violations unless they agreed to sell to a redeveloper.


Pleasant Ridge
Institute for Justice

A judge in Indiana has stopped a city's nasty plot to make people sell their homes to a redeveloper or else face thousands of dollars of rapidly accumulating fines.

In Charlestown, Indiana, a community north of Louisville with a population of less than 8,000, the mayor and other city leaders have been trying to transfer ownership of private plots of land in the low-income neighborhood of Pleasant Ridge to a developer. This developer would then raze all the properties and build an entirely new neighborhood.

Charlestown did not take advantage of Kelo v. City of New London, the Supreme Court decision that allows the government to transfer property to a private developer via eminent domain. That would have required the city to pay the property's current owners.

Instead, the city targeted Pleasant Ridge with ruthless code enforcement. Property owners were cited and fined hundreds of dollars for every individual violation. Unlike the usual practice in code enforcement, the owners were not given any grace period to correct the problems before the fines were levied: They were levied immediately and compounded daily until the problems were fixed. And even when the violations were fixed, the owners had to pay the fines. The only relief offered to them came if they agreed to sell their properties to the developer.

Once the developer bought and boarded up the homes, by contrast, the city refrained from citing it for code violations. Neighbors complained that the company's properties were overgrown and full of garbage and weeds, creating a public health risk. But the law wasn't being used to target public health risks; it was being used to target people who wouldn't sell.

In February, the libertarian attorneys of the Institute for Justice stepped in, representing several landowners and a neighborhood association. Yesterday, a circuit judge in Scott County sided with the institute and its clients. Judge Jason Mount ruled that Charlestown had violated its own code enforcement regulations in order to target Pleasant Ridge. He has ordered the city to give property owners the opportunity to appeal citations and a grace period to actually fix problems before the city is permitted to start levying fines.

In a release, Institute for Justice Senior Attorney Anthony Sanders took note of the victory and the judge's acknowledgment of the unfair enforcement:

Today's ruling unmasks the City of Charlestown's and developer John Neace's actions for what they are: a naked land grab, taking from the poor to give to the rich. With this injunction in place, the city either must force Mr. Neace's company to pay several million dollars in fines or waive the fines it has illegally and unconstitutionally issued against the residents of Pleasant Ridge.

That's two wins in less than a week for the lawyers at the Institute for Justice. That's good news for private property rights.

Read more about the case here.