The Adventure of the Norwood Builder

A new chance to curtail eminent domain abuse.

Carl and Joy Gamble, retirees who had lived in the same house in Norwood, a Cincinnati suburb, for more than three decades, did not realize their neighborhood was "deteriorating." Neither did the Norwood City Council, until it heard about developer Jeffrey Anderson's plan to build offices, condominiums, chain stores, and a parking garage there.

The prospect of new tax revenue opened the city council's eyes to the awful conditions in the Edwards Road Corridor. It turned out the area was plagued by "obsolete platting" (small front yards), "faulty street arrangements" (two cul-de-sacs), "incompatible uses" (businesses close to homes), "nonconforming uses" (homes and businesses that did not meet zoning and building requirements imposed after they were constructed), and "diversity of ownership" (homes and businesses owned by different people).

An "urban renewal study" suggested and financed by Anderson documented these horrors, leaving the city with no choice but to condemn any property in the neighborhood whose owners refused to sell and hand it over to Anderson, who had kindly agreed to reimburse the government for any expenses entailed by that process. After more than two years of legal challenges by the Gambles and other holdouts, the Ohio Supreme Court now must decide whether there's anything wrong with this cozy arrangement.

The conflict between the Gambles and Anderson is the most important eminent domain case since last year's decision by the U.S. Supreme Court upholding forced transfers of property for economic development. In that case, Kelo v. New London, the Court concluded that any project can count as a "public use," thereby justifying the exercise of eminent domain, if the government expects it to generate more tax revenue than the homes or businesses it replaces.

Under that standard, there would be no need for the city of Norwood to pretend the Gambles' well-maintained middle-class neighborhood is in imminent danger of becoming a slum. It could just say, "You guys have to move, because we care about the tax base more than your property rights."

But the Norwood City Code allows condemnations for private development only if they're necessary to eliminate "slum, blighted, or deteriorated" conditions or to fix areas deemed to be "deteriorating." No one can seriously maintain that the Edwards Road area falls into the first category (although the city initially tried), but both the trial court and the state appeals court agreed that calling the neighborhood "deteriorating" was not an "abuse of discretion."

It was only an abuse of English and common sense. The area, which the city called "generally…in good shape" only five years before calling it "deteriorating," did not include a single dilapidated, vacant, or tax-delinquent property. It was not blighted by any stretch of the imagination, but the city claimed to be worried that it might become blighted someday.

As the Institute for Justice points out in its brief for the Gambles, "the requirements of the 'deteriorating' designation are so minimal, and the conditions so ordinary, that…it can apply to virtually any neighborhood." Like the Gambles, you could be living in a "deteriorating" neighborhood, subject to condemnation, without knowing it.

The main hope for the Gambles is that the Ohio Supreme Court can interpret the state constitution to provide more protection for property rights than Kelo says the U.S. Constitution does. The relevant provision of the Ohio Constitution says "private property shall ever be held inviolate," though "subservient to the public welfare," and may be taken only "for public use."

If the Ohio Supreme Court, unlike the U.S. Supreme Court, refuses to equate public use with private use and denounces land grabs like the one atttempted by Jeffrey Anderson, it would signal that new legislation is not the only way to curtail eminent domain abuse in the wake of Kelo. This is the sort of condemnation we need to prevent further deterioration of our property rights.