October 28, 2013

Don't it always seem to go that you don't know what you've got 'til it's gone

By Anastasia P. Boden Attorney

Supporters of property rights will no doubt remember the sad saga of Kelo v. New London.

Kelo house before eminent domain
Kelo house before eminent domain

In  that case, the Supreme Court permitted the city to use its eminent domain power to condemn the homes of Suzette Kelo and her neighbors to make way for a “high-end residential district”—which would adjoin a new Pfizer plant in the area.  After Kelo’s pink Victorian home and the neighboring properties were destroyed, a private party was supposed to come in and replace them with a would-be yuppy community, complete with condos, a hotel, and a shopping mall.  Though the Takings Clause states that private property may only be taken “for public use,” the Supreme Court determined that promoting the “public benefit,” satisfies this standard, and allowed the condemnation.  The Pfizer plant has since shut down, and though Suzette Kelo’s iconic pink Victorian house has been moved and preserved as a historical site, the property where it used to stand is a vacant lot, inhabited by only weeds and glass.

Kelo after
Kelo property after “economic development”

So it goes.  In the wake of public outrage and state legislative reform, local governments continue to take, take, take.  New York recently seized over 50 properties in Brooklyn to build a new arena for the New Jersey Nets, then it seized small businesses in Harlem so Columbia University could build a new campus on those properties.  While a study showed the area in Harlem to be “blighted,” that study was funded by the developer.  Now, Seattle wants to take a parking lot from a 103-year-old woman to turn it into… a parking lot.

You read that correctly.  The same city that produced  a parking garage disaster in 2011 wants to try again, this time with the already functional parking lot of someone else: 103-year-old Seattle resident Myrtle Woldson.  As many outlets have shared, Seattle owes $60 million on construction bonds for a parking garage it built in 2011—when the property itself was only appraised at $50 million.  Another paper added that the city was losing $30,000 a month on that parking garage to mismanagement or theft.  Yet now it seeks to seize Ms. Woldson’s property to build another parking lot.

As the Volokh Conspiracy recently chronicled, eminent domain discourages economic growth.  By undermining investment backed expectations, eminent domain discourages new economic ventures, and reduces productivity.  Indeed, eminent domain abuse may have contributed to the decline and eventual bankruptcy of Detroit.

But moreover, eminent domain undermines property rights, most often at the expense of the least fortunate (for a particularly appalling account, read about the Poletown eminent domain case here).  Fortunately, 48 states have enacted eminent domain reform since Kelo, and the House Judiciary Committee recently passed the Private Property Rights Protection Act, which would prevent states that use their eminent domain power for economic development from receiving federal economic development funds for two years.  Hopefully efforts like these will force local governments to think twice before paving one citizen’s paradise to put up a parking lot.

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