Remembering Kelo

Can your city government take your property and hand it off to private companies to promote “economic development?” Ten years ago today, the Supreme Court of the United States said yes.

Kelo v. City of New London remains among the Supreme Court’s most notorious decisions. Around 2000, the small town of New London, Connecticut, decided to turn a local neighborhood into a commercial district to support Pfizer’s plan to build a $300 million facility nearby. Many of the homeowners were willing to sell their property to the city, but some refused. Among those who wanted to stay put were Susette Kelo and Wilhelmina Dery, who had lived in her home since 1918. Undeterred, the City decided to use its eminent domain power to force them out.

Those who wanted to keep their homes sued, arguing that the City’s use of eminent domain violated the Fifth Amendment to the Constitution. The Fifth Amendment’s Takings Clause says, “nor shall private property be taken for public use, without just compensation.” The Clause’s “public use” requirement limits when government can exercise its eminent domain power — even if it provides just compensation. Ms. Kelo and the other homeowners argued that taking someone’s land and handing it off to commercial enterprises to boost economic development is not a “public use.”

The Supreme Court disagreed in a 5-4 opinion. The majority of the court reasoned that New London had a legitimate public purpose for taking homes and giving the land to private developers: to raise revenue and create jobs. This rationale, however, obliterates any real limitation on the public use requirement. A big box store or shopping mall will always raise more revenue and create more jobs than a small neighborhood, and thus no one’s home remains safe. The Kelo decision canonized corruption: local government can use its eminent domain power to pander to powerful private developers at the expense of everyday citizens.

Worse, the eminent domain power already tends to target the poor. Government needs to pay fair market value to you when it takes your property. If a city wants to make way for a shopping mall, would they rather build it over Bill Gates’ house and pay fair market value at $123 million, or slap it down over a poor neighborhood, where they’ll pay 1000 times less? Without a robust limit on its power, government can use eminent domain to favor moneyed interests over the poorest among us.

The public use requirement was created to prevent this kind of abuse. The power to grab private property should only exist for traditional government functions: the construction of roads, power lines, and so forth.

Thankfully, Kelo resulted in a massive backlash. The vast majority of Americans opposed the decision. Since Kelo, grassroots activists have foiled many local government attempts to play favorites with eminent domain. And many states have created laws designed to curb this kind of abuse. Plus, the public use debate in the courts is not over. Just this week, in Horne v. Department of Agriculture, Justice Clarence Thomas argued in a concurring opinion that the Department of Agriculture can’t take huge swaths of raisin farmers’ crops and then sell the confiscated raisins to exporters and foreign importers, or just give them away, without violating the public use requirement.

Kelo’s story demonstrates both the fragility of liberty and the power of freedom-loving Americans to rise up and defend it. The tenth anniversary of this historic decision should cause us all to reflect on the sanctity of constitutional rights and the threats posed by unconstrained political power.