The Evolution of "Public Use" in Redevelopment: American Planning Association, 3/05

Bettman Symposium

By Stephen Sizemore, AICP

Pending before the U.S. Supreme Court is a case, Kelo v. City of New London, whose decision may significantly alter one of the major tools by which communities facilitate redevelopment and economic development — the power of eminent domain.

In recent years, controversial uses of this power have regularly hit the front pages of national newspapers and news. Whole neighborhoods are being condemned to provide sites for new private development that promises to create new jobs and increase the tax base. Is this an abuse of the power of eminent domain, cruelly taking the homes people grew up in and have staked so many aspects of their lives? Or is it a necessary, yet last-resort, means of assembling land for redevelopment that is crucial to revitalizing the area or the city as a whole?

Under the Fifth Amendment of the U.S. Constitution, the power of eminent domain is limited to where exercised for a "public use." But what is "public use"? Is it limited to public facilities, like roads and fire stations? Is it any action that benefits the public? Or is it something between? And does it matter whether the condemned property ends up in the hands of another private entity rather than the government?

These are some of the questions that two speakers and a responding panel of legal experts addressed at Sunday afternoon's session in the Bettman Symposium.

Charles Siemon, a Florida attorney with extensive experience with redevelopment, stressed that U.S. society and its laws have always recognized the need for government to have a broad power of eminent domain, and that the courts have wisely stayed away from second-guessing the judgment of state legislatures as to what constitutes a public use for which the power may be used. Most of the nation's cities face a "crisis in redevelopment," where the fracturing of urban property into small parcels poses a major obstacle to redevelopment needed to revitalize the city. If the government lacks a broad power of eminent domain, one property owner can hold out and preclude the assembly of the land needed for redevelopment, stopping redevelopment and the many public benefits it entails. And what difference does it make to a property owner who ends up with the property, and what use it's put to?

Dana Berliner, an attorney with the Institute of Justice in Washington, D.C. (and attorney for the property owners in the Kelo case), presented very different view of what "public use" should mean. She emphasized that government use of eminent domain to take a home or business touches on something that is very personal to the home or business owner, something central to their identity. They suffer injuries that, though often intangible, are very real — and often not compensated for by payment of the property's market value.

And just as it matters to you what a beggar does with the money you give him, it likewise matters to the property owner how their property is used, and for whose benefit. People are more willing to sacrifice their property taken for a public road, police station, or other facility directly serving the community than as the site for private development that may (or may not) indirectly contribute to the community's economic well-being. Planners often just do not understand this or why people object to use of eminent domain. Instead of contributing to conflicts between public purposes and property owners in redevelopment projects, planners should do more to avoid and minimize such conflicts.

Brian Blaesser, an attorney with the Boston office of Robinson & Cole, noted that those in the real estate community, like people from both ends of the political spectrum, are ambivalent about the issue of how public use should be defined. Although they recognize the desirability of economic development and the need to use eminent domain to achieve it, they also are sympathetic to property owners adversely impacted by such use, particularly where it involves a "private-to-private" taking. But sufficient safeguards against abuses in the use of eminent domain already exist in the form of a number of statutory limitations and procedural requirements at the state level. Even so, more work is needed in reviewing and revising these redevelopment statutes — for example, removing high density and diversity of ownership, both important attributes of smart growth, as defining criteria for "blight."

Shelley Saxer, law professor at Pepperdine University, stressed that controlling the abuses of eminent domain requires a higher standard of review. In an amicus brief in the Kelo case, she and other law professors proposed using the standard applicable to exactions: that there be a nexus and rough proportionality between the impacts of condemnation on individual property owners and the need for the condemnation. Paying market value for condemned property often does [not] equate to "just" compensation, given the property owner's relocation costs and emotional loss.

Deborah Rosenthal (an attorney with Cox, Castle & Nicholson in Riverside, California) spoke about APA's recent development of a policy guide on public redevelopment, noting that it was triggered by increasing concerns about possible abuses of the eminent domain power and legislative reactions to those concerns. The policy guide considers eminent domain as one of many redevelopment tools — one to be used as a last resort, through an open public process, to implement a redevelopment plan that conforms to the community's comprehensive plan. When undertaken in the context of a defined plan, and in a manner that respects the psychic values of affected property owners, eminent domain is far less likely to be controversial.

However the U.S. Supreme Court decides the Kelo case, the issue of how the power of eminent domain may or may not be used for redevelopment will continue to be one of great interest and concern to planners.

American Planning Association: www.planning.org