Will Connecticut Finally Enact Meaningful Eminent Domain Reform?

Fourteen years after the notorious Kelo case, the state where the case originated still has one of the nation's weakest eminent domain reform laws. A bill currently before the state legislature could change that.

Susette Kelo's famous "little pink house,"which became an iconic symbol of the Kelo case. (Institute for Justice)

Some fourteen years after a controversial Supreme Court decision upheld the use of eminent domain to seize homes for transfer to private developers, the state where the case originated may finally pass a law that curtails such abuses.

In 2005, the Supreme Court ruled in Kelo v. City of New London that the government can take private property and transfer it to a new private owner for purposes of promoting "economic development." Although the Takings Clause of the Fifth Amendment mandates that the government can only take property for a "public use," a narrow 5-4 majority reaffirmed the rule that virtually any potential benefit to the public counts as a public use. The government does not even have to prove that the supposed benefit will  ever actually materialize. As a result, the New London Development Corporation—a private entity authorized by the City of New London—was able to condemn fifteen residential properties in the Fort Trumbull neighborhood of New London. One of them was Susette Kelo's "little pink house," pictured above.

Perhaps even worse, the ill-conceived development project that led to the comdemnation fell through. Even today, almost fourteen years after the litigation ended, nothing has been built on the condemned land. Feral cats are the only regular users of the properties where homes once stood.

The former site of Susette Kelo's "little pink house" in 2014. Nothing has been built on it, to this day. (photo by Ilya Somin).

 

Feral cat on the site of one of the properties condemned in the Kelo case, 2011 (photo by Jackson Kuhl).

The Kelo decision sparked a massive public backlash. Polls showed that over 80% of the public opposed the decision, with opposition coming from such unlikely allies as the NAACP, Ralph Nader, Rush Limbaugh, libertarian property rights advocates, and even Bernie Sanders. Widespread revulsion against the Court's ruling led 45 states to enact new eminent domain reform laws. Some of these reforms provide strong protection for property owners. But many others are ineffective, imposing few or no real constraints on the use of eminent domain to seize property for influential private interests.

Despite being the state where the Kelo case originated, Connecticut enacted one of the weakest post-Kelo reform laws in the entire nation. I summarized it in my book on the Kelo case and its aftermath:

The new Connecticut law merely forbids the condemnation of property "for the primary purpose of increasing local tax revenue…." This restriction does not prevent condemnations for either economic development or blight alleviation [an alternative mechanism for seizing property for private development interests]. Connecticut law allows local governments to condemn property for both purposes…. Even the goal of increasing tax revenue can still be pursued so long as it is part of a more general plan
for local "redevelopment." In practice, it is likely impossible to prove that a given property is being condemned primarily for the purpose of "increasing local tax revenue" as distinct from the goal of promoting economic development more generally.

A bill currently under consideration by the Connecticut state legislature could change that:

Now there's a legislative push in Connecticut to finally reform the state's eminent domain laws to prevent another situation like Kelo's. HB 5123, introduced by Rep. Tami Zawistowski (R-Suffield) would stop the state and its municipalities from using eminent domain to take property that would be used for any project that generates income for a private commercial purpose….

The bill passed the House's Planning and Development Committee, 15-6, but does not yet appear to be scheduled for a full House vote.

The text of the bill would ban the use of eminent domain in redevelopment areas "for any purpose that produces income from such real property for a private entity." This would forbid takings for privately owned "economic development" (as in the Kelo case) and probably also for the alleviation of "blight" broadly defined as anything that potentially constrains economic growth. It would not, I think, forbid takings for privately owned public utilities.  But such condemnations are both more defensible and less prone to abuse than takings for "economic development," which are easily captured by powerful interest groups and routinely fail to produce the promised economic benefits—as happened in the Kelo case itself.

Although there is some political momentum behind the bill, its passage is not a done deal. HR 5123 faces potential opposition from key members of the state legislature,  some local governments, and private interests who benefit from having governments condemn property for their businesses. State Rep. Zawistkowski, the bill's sponsor still expects "an uphill battle." But hopefully the political obstacles will be overcome, and Connecticut will finally get some real eminent domain reform.

In my view, the Kelo decision is based on a serious misinterpretation of the Constitution. I hope the Supreme Court will eventually overrule it. But, in the meantime, state governments should  act to curb such abuses without waiting for federal judges to do it for them. Even if "economic development" takings are not unconstitutional, they are still harmful and unjust.