Lawsuit Challenges Use of Eminent Domain as NIMBY Tool to Block Housing Project

A Rhode Island town seeks to use eminent domain to block construction of a large-scale affordable housing project.

Rhode Island property targeted for condemnation to prevent construction of affordable housing on the site. (PLF)

 

The town of Johnston, Rhode Island is targeting property for condemnation in order to prevent the construction of an affordable housing project on the site. The Pacific Legal Foundation (a public interest law firm representing the property owners) in the case, has a helpful description of the facts  [Note: PLF is also my wife's employer, though she has no involvement in this case and does not work on property rights issues]:

SCLS Realty, LLC and Sixty Three Johnston, LLC were formed by Salvatore Compagnone, Jr, a fourth-generation general contractor in Johnston, Rhode Island, whose family has a long history in the building trade dating back to Italy. After Salvatore's father passed away in early 2024, his family took the helm of development in the town with plans to carry on the building tradition and provide desperately needed, new affordable housing.

A 2023 Rhode Island law aimed at incentivizing private creation of affordable housing (housing that costs less than a third of a moderate- or low-income household's income) seemed to pave the way. This law allows more living units per acre than local rules usually permit and requires local governments to streamline the approval process with quicker and simpler permitting procedures.

SCLS and Sixty Three Johnston own just over 31 vacant acres of land in the Providence suburb of Johnston. The town of some 30,000 residents is just a few miles from the state capital, yet only 7% of its housing serves low- and moderate-income residents.

SCLS and Sixty Three Johnston's property was already zoned for dense apartment-style development. Sal Compagnone and his partner, Ralph Santoro, designed a 252-unit, five-building complex, and in October 2024, submitted a preliminary land-use application to the Town planning department, which set a December 3 hearing to review the plans. But Johnston's mayor, Joseph Polisena, Jr., had other ideas. On the same day as SCLS and Sixty Three Johnston's planning board hearing, he posted a letter on social media attacking the project. He claimed it would create "a trifecta of chaos" with increased traffic, drainage problems, and an overwhelmed school system. And although Rhode Island law specifically allows—indeed encourages—this type of housing development, the mayor accused the LLCs of trying to "force-feed" an unwanted project on the Town. His letter also fired out a clear threat: "If you insist on moving forward with the currently proposed project, I will use all the power of government that I have to stop it."

The mayor wasn't bluffing. On January 27, 2025, Polisena abruptly announced the Town would seize the LLCs' land by eminent domain. He claimed the Town needed the LLCs' property for a new municipal complex, despite zero evidence the Town had ever previously considered such an acquisition or that relocation of the Town's facilities nearly three miles away from their present central location to the edge of the town had ever been mentioned, much less planned. But the Town Council unanimously approved the taking the very next day.

PLF and the owners are challenging the use of eminent domain to take the property on the grounds that the condemnation here is not for a "public use," as required by the Fifth Amendment, and the Rhode Island state constitution.

In cases like Kelo v. City of New London, the Supreme Court has ruled (wrongly, in my view) that almost any potential benefit to the public qualifies as a "public use." Thus, in Kelo the Court upheld the condemnation of homes for purposes of promoting privately owned "economic development," even though the development plan in question was so badly flawed that it predictably fell through, and the condemned property ended up (for many years) being used only by a colony of feral cats.

But the Kelo majority also indicated that a taking can still be invalidated if the government tries to "take property under the mere pretext of a public purpose." This has led to much litigation over what counts as "pretextual" taking, with different state and federal courts reaching a wide range of conclusions.

In some ways, this case reminds me of last year's federal Second Circuit ruling in Brinkmann v. Town of Southold  the "passive park" case which I discussed here. Both cases feature a bogus supposed "public use" that served as a thinly veiled cover for a NIMBY ("not in my backyard") effort to forestall a use that the authorities objected to (a hardware store in Brinkmann) and both differ from the typical "pretextual" taking case because the condemned property is slated for public ownership rather than a transfer to a private party. For reasons outlined in my post about Brinkmann, this makes it more difficult to argue that there is no public use here:

Pretextual takings doctrine is a mess generally. But I think it can legitimately be used to strike down a variety of takings for transfer to private parties; indeed, I believe most such takings are unconstitutional even aside from the pretextual motives, because I support the "narrow" view of "public use" under which the government may only take property for publicly owned facilities or private ones that have a legal duty to serve the entire public.

In most situations, the narrow view is satisfied when the government takes property for public ownership - even if the motive for the taking is unrelated to the potential benefits of the new use…. But this case is different from most takings for public ownership because the government isn't actually using the condemned property for anything….

This opens up the possibility there can be public ownership without public use. To be sure, there can sometimes be "use" even if the government doesn't build anything on the land it takes. For example, it could decide to use the property as a nature preserve. But there is no such use here, not even a "passive" one. The only goal is to block the Brinkmanns' plan to build a hardware store, not to use the land for any affirmative purpose.

Perhaps such blocking can still be a "use." But the issue is a difficult and murky one.

A divided Second Circuit ultimately decided the passive park did qualify as a public use, and the Supreme Court refused to hear the case. But I think this case may be a better one for the property rights side than Brinkmann was. A "passive park" can potentially be created simply by eliminating the previous use of the land, and then leaving it empty and open to the public. The "park" may not be very attractive. But at least people can take walks there, kids can play on it, and so on. By contrast, the Town of Johnston's supposed public use of building a municipal complex requires actively restructuring the property and building a new facility on it. That can't be accomplished if there is no viable plan to do it - as there appears not to be here.

In addition, even if the property owners ultimately lose under the federal Public Use Clause, they might be able to prevail under that of the Rhode Island state constitution. The state supreme court there has established tighter limits on public use than the US Supreme Court imposes under Kelo (see my discussion of relevant Rhode Island precedent in  Chapter 7 of my book The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain). 

This case potentially has a broader significance, in so far as it might empower local governments to use eminent domain as a NIMBY tool for blocking affordable housing projects, thereby exacerbating the national housing crisis. The usual NIMBY tool is exclusionary zoning. Unlike eminent domain, it doesn't require the government to pay owners whose rights it restricts! In this case, the local government couldn't resort to zoning, because such restrictions had been preempted by state law. Thus, they tried eminent domain instead.

Other local governments could also potentially use eminent domain as a tool to circumvent state laws restricting exclusionary zoning. As Josh Braver and I argue in our article "The Constitutional Case Against Exclusionary Zoning," there is a limit to such abuse of eminent domain, because local governments can't afford to impose sweeping building restrictions if they have to pay every affected owner to do so. But eminent domain could potentially be a viable NIMBY tool in cases where state law only partially overrides local zoning restrictions, as is the case with the 2023 Rhode Island state law here (which creates only a limited override for affordable housing projects). That potentially enables local governments like Johnston to use condemnation to keep out those projects without breaking the bank.

The lesson here is that statewide reform should comprehensively ban exclusionary zoning, not just create limited workarounds. In addition, Braver and I argue that most exclusionary zoning rules are takings requiring compensation under the federal constitution. If courts adopt that approach, local governments would find it much more difficult to use eminent domain for NIMBY purposes, because doing so would require taking (and paying compensation for) a much wider range of properties.

Unless and until more states adopt more comprehensive zoning reform or federal courts adopt the Braver-Somin approach to takings, public use litigation could potentially help limit eminent domain NIMBYism - if the plaintiffs win this Rhode Island case. For that reason, among others this case is definitely worth keeping an eye on for anyone interested in property rights, land use, or housing policy.

Recently, the Town tried to  secretly take over the property and lock out the owners even before the eminent domain process was officially completed. PLF attorney Robert Thomas (one of the nation's leading eminent domain lawyers), said: "In 40 years, I've seen some pretty outrageous exercises of eminent domain powers. Never anything like this." For what it's worth, I have been studying eminent domain issues for over twenty years, and I've never seen anything quite like this attempt at a stealth seizure either.  Fortunately, PLF and the owners managed to get the court to issue a temporary restraining order to block the Town from occupying the land at least until the court decides whether to issue a preliminary injunction against the condemnation.

The case continues, and I will cover the court's ruling when it comes down.

 

Comments

[wvattorney13]

It seems odd that a government could take land for low income housing and that a different government could take land to PREVENT low income housing and both qualify for a public purpose.

At some point it simply becomes that the government can take your property for whatever reason it chooses, which IMHO is inconsistent with the Fifth Amendment.

[Krayt]

And if you can take land to give it to a rich guy or business, who will pay more taxes, and that's a public purpose, wouldn't keeping out the poor, leading to lower property values and the fleeing of wealth, and thus lowering the tax base, wouldn't preventing that also be the same public purpose? Heck, do you have to wait for the blight to be well underway? Why not nip it in the bud?

Of course, I don't think this stuff, but I do love fun with politicians.

[Stephen Lathrop]

As always, NIMBY arguments are bad-faith arguments. Make it a point to notice. Every time you read, "NIMBY," the matter under discussion involves a proposal to inflict on some people an uncompensated public cost which benefits all people—and especially powerful people. The latter are engaged not only to advance the public interest, but also to be sure they are not tagged with expense to do the advancement.

[wvattorney13]

I tend to agree, however what would a fair proposal look like. Take homeless shelters and residential substance abuse treatment. Everyone believes these are public goods. Nobody wants them in their neighborhood. So the powerful people force them into the poorer neighborhoods who must then suffer the externalities of increase crime, drugs, and prostitution.

How do we make sure that is fair? Do we compensate the nearby property owners when one of those places opens nearby? Do we have a lottery system to pick where they are located? Does the government pay any increased price for land to locate these things in more desirable areas and force the rich people to live with it in the name of fairness? Do we look at these things as more of business and not locate them in residential areas? There is really no good answer.

But the powerful people get what they want so that is good enough for now.

[Stephen Lathrop]

In some ways, this case reminds me of last year's federal Second Circuit ruling in Brinkmann v. Town of Southold the "passive park" case which I discussed here.

Somin, as always, argues on behalf of the interests of real estate developers, and against conservation interests. More generally, real estate development interests have attacked conservation at least since passage of the Clean Water Act in the early 1970s. Somin's wife works for the Pacific Legal Foundation, apparently a non-profit with an avid interest in real estate development profits.

John Muir had it right. In America, nothing dollarable is ever safe. The real estate development industry is a one-way ratchet driving that principle.

[Nemo dat]

"money bad" aside - the real estate development industry is also a one-way ratchet driving the development of real estate, which, you know, we all use for housing - a basic necessity which everyone seems to agree there is too little of right now.

[A Japanese Student]

Why is Pacific Legal Foundation representing a client in New England?

[Stupid Government Tricks]

Why is a Japanese student commenting on it?

OH right -- "Pacific". But that's a farther stretch than from Pacific to New England.

Your turn.

[JoeFromtheBronx]

The name reflects its origins, not the reach of its mission.

[Drewski]

Let's take a moment to acknowledge that under Rhode Island law, this specific development would be allowed to charge up to $4,350 per month for a one-bedroom apartment (60% of Johnston's median single-person household income, per Wikipedia). Alternatively, upward of $6,000 per month for larger apartments. For this great sacrifice, it would also receive government subsidies.

This applies to 25% of the apartments - the rest are unregulated. However, the complaint puts forth that 100% of the units will be so very affordable.

That said, here's the complaint, which Somin oddly doesn't have linked, preferring a highly-spun narrative: https://rhodeislandcurrent.com/wp-content/uploads/2025/03/Complaint-Court-Stamped.pdf

I think the developers have the better of the law (although not as clearly as Somin, an advocate, suggests). However, it also seems clear that this law is pandering to developers. When Charlestown did a 20-year assessment of the act it found that most of the subsidized units were more expensive than other available housing in the town. The law is more geared to funneling money to wealthy LLC members than to providing actual affordable housing.

[Armchair]

I'm rather more sympathetic to Johnston here.

It's a town of 30,000. ~11,000 households. That's pretty small. The housing prices from perusing Zillow are pretty reasonable. Most houses are in the $400,000 to $500,000 price range. There are a some which are cheaper ($200,000, $300,000). The 31 Acre lot was seized by eminent domain for just $775,000. That' $25,000 an acre, which is pretty cheap...and there was no contest about the price. Over the last 2 decades, Johnson's population growth has been 2% to 3%....a decade. A single development which replicated a decade's worth of population growth?

[Stupid Government Tricks]

1. Maybe the population growth has been restricted by the lack of housing.

2. Maybe it's none of the government's business.

[Armchair]

1. Perhaps. But it tracks with Rhode Island's overall population growth over the last 20 years (2-3% per decade).

2. Sorry....it really is the government's business. If the local town is to be expected to provide schools, roads, sewage, adequate drainage, etc for the new residents (and the town is expected to), then knowing that they are expecting a massive surge of people in one area is their business. If they don't plan for it, you get things like overflowing sewage lines and flooding.

[David Nieporent]

and there was no contest about the price.

They seized the property without notice, and your takeaway is that "there was no contest about the price"?

[Armchair]

"They seized the property without notice,"

That's a lie. Unless you have a cite somewhere.

[SRG2]

This being RI, the obvious mistake the plaintiffs made was not paying off the mayor.

[ReaderY]

It seems to me that in light of Kelo the constitutional arguments, at least the fexderal ones, aren’t going to fly.

Rather than (or in addition to) making a constitutional argument, the plaintiffs might want to consider making some sort of state-law argument that, under the town’s theory, a Rhode Island municipality could, under Kelo, completely subvert the legislature’s will by simply invoking eminent domain and buying the property every time a developer wants to construct affordable housing, then selling it to people willing to build the low-density housing the municipal government wants.

Indeed, there would seem to be evidence this is what the town is doing. It had no pre-existing plans for a new municpal complex on the edge of town, nor would doing one make much sense.

So rather than (or in addition to) the constitutional arguments Professor Somin loves so much, I would suggest the more nuts-and-bolts argument that fundamentally the state legislature has the power to set policy here based on the needs of the whole state; it is the state legislature’s job to consider the interests of the entire state, all its members, and that means it sometimes overrides the decisions of town political processes based on the interests of non-residents who are outside that process. It has made a decision, and the town is completely subverting and nullifying that decision.

I would present this as a power struggle between the municipal and state government, one where the state government should win. This is a lot less sexy than using the constitution to implement visions of universal human rights. Having the state legislature rather than courts be the body supervising town councils to make sure they don’t hurt outsiders’ interests too much is a lot more mundane, but I honestly think it’s the government we have. I think an argument on these lines would have a better chance of suceess.

Here the legislature agrees with Professor Somin. Why not make the ordinary, mundane argument that its will should be what controls? That the purpose of giving a statewide legislative body oversight power over towns is precisely the power to step in and set rules and have those rules be abided by when it thinks towns are acting too much against outsiders’ interests?

Why always have it be courts stepping in deus ex machina based on constitutional ideals? When the ordinary political process actually produces a result on lines Professor Somin would like, why not defend the integrity of the ordinary political process for once?

[Katall]

Hmmm. The fifth amendment provides for compensation of those subject to eminent domain. The builder will be made whole. It seems more like a policy argument than a constitutional argument. I am not making a comment as to whether the policy decision is sound.

Kelo is a bit different, as the land holder had a personal connection to the land. I have more sympathy for Mrs. Kelo.