March 10, 2010

Detroit's federally funded demolition project

By Detroit's federally funded demolition project

Author: Daniel Himebaugh

Detroit, a city laden with economic troubles, might soon become a hotbed of eminent domain litigation.  Later this month, Mayor Dave Bing is set to announce the city's plans for a massive demolition project, meant to address Detroit's shrinking population and deteriorating neighborhoods.

City statistics are pretty startling.  In 1950, about 2,000,000 people lived in Detroit.  By 2007, that number had decreased to about 917,000 people.  And conditions in the city have gotten much worse in recent years because Detroit has maintained one of the highest foreclosure rates of any major city during the current economic downturn.

In response to this long decline, the city plans to "downsize."  Detroit has received millions of federal dollars to spend on acquiring land, razing buildings, and relocating residents.  The plan is to demolish 10,000 houses and vacant buildings over the next three years, while funneling new investment into other neighborhoods.  Of course, as The Washington Times reports, some residents will not be eager to move:

"'I like the way things are right here,' said David Hardin, 60, whose bungalow is one of three occupied homes on a block with dozens of empty lots near what is commonly known as City Airport.  He has lived there since 1976, when every home on the street was occupied, and said he enjoys the peace and quiet."

Detroit has been the epicenter of eminent domain controversy before.  In 1981, the Michigan Supreme Court allowed the City of Detroit to demolish the Poletown neighborhood, relocate 4200 residents, and transfer the land to General Motors Corporation to build a factory.  Not until 2004, in the case of County of Wayne v. Hathcock, did the court overturn the Poletown decision, forbidding condemnations that transfer property to private parties for purposes of economic development.

Whether or not Detroit's plan to push the reset button on the city's languishing neighborhoods is legal or not remains to be seen.  But it's necessary to ask how Detroit came to be in the disadvantageous position it now finds itself.  As Ilya Somin writes in his article Overcoming Poletown: County of Wayne v. Hathcock, Economic Development Takings, and the Future of Public Use, "One of the most striking aspects of the Poletown decision is the majority opinion's failure to even mention the costs imposed by condemnation on either the people of Poletown or the city of Detroit as a whole."  Somin argues that the limited benefits provided by the Poletown GM plant were likely outweighed by the economic harm the condemnation of Poletown inflicted on the city.  Detroit's insistence on picking winners and losers in an economic scheme may have actually cost more jobs than it created, further weakening the city's economic health.

The next few years in the Motor City promise to be, at the risk of understating the magnitude of the city's plans, somewhat "unconventional."  As The Washington Times reports, "Things that were unthinkable are now becoming thinkable."

Learn more about PLF's involvement in eminent domain litigation here.

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