By Ronald H Silverman
The U.S. Supreme Court's recent ruling in favor of local government's right to condemn private property for economic development should be of special concern in this state. Two years ago the Institute for Justice reported that "New York is perhaps the worst state for . . . eminent domain abuse."
Typically, economic development involves transfers of condemned land to private parties, usually businesses. In the New London, Conn., case decided on June 23, property owners claimed that their small city's taking of their land was not for the constitutionally required "public use," but for the use of private parties. The Pfizer drug company had already built a research facility nearby.
The court held that the condemnations were a legitimate part of the city's economic redevelopment plan, and that while the condemned land was not to be open to the public, that didn't matter. The court deferred to the city's judgment that it might be revitalized through job and tax growth produced by having private enterprise on the property.
If the taking of property now requires only a "public purpose" as opposed to the more limited idea of "public use," then the door to eminent domain has opened much wider. And if courts simply trust officials' claims that the public will eventually benefit, then local government could become all too casual or careless in planning condemnations.
Already on Capitol Hill, there is action to check this growing power. On Thursday the House passed a bill denying federal funds to economic development programs that use eminent domain to make way for a profit-making project like a hotel or mall.
Locally, in a case pending in New Cassel, the Town of North Hempstead is trying to condemn a three-bedroom house and land used for the World Bible church to make way for what is described in news reports as a "community center." This would seem to be a legitimate public use. But if the center were privately built, privately owned and operated by the town, there might still be a question about private profit benefits.
In Brooklyn, a private developer intends to build a new arena for the Nets basketball team that will require evictions. This project will bring profits to the team owners. Brooklyn and New York City will benefit from more jobs and taxes.
Government needs to tread carefully. Taking of property by eminent domain can hurt property owners, who lose money on investments and must relocate and sever neighborhood ties. This can be particuarly severe for the elderly and others who have lived in a neighborhood a long time. Persons of color with low or modest incomes and less political clout may be especially vulnerable, while local legislatures may be prone to manipulation by monied private interests.
How do we minimize abuse by local government?
Some states, like Michigan, now forbid takings for economic development where private parties are likely to benefit directly. This is probably too extreme a solution, since some of these takings do add jobs, tax revenues and community amenities.
More judicial scrutiny may help in cases where owners resist a taking. Intermediate kinds of judicial monitoring, especially where there is persuasive evidence of planning mistakes or carelessness, may be a good deterrent. Where a community is not truly distressed or not suffering a long economic decline, a court may discourage takings with obvious private benefits for profit-making businesses. With communities in decline, courts could defer to local solutions to local problems, especially where reasonable planning is used and state monitoring occurs.
There may also be ways to increase the size of the just compensation awards that are required by the "takings clauses" of the U.S. and state constitutions. This is a fair way to spread condemnation costs to a larger tax-paying public, even though not all these costs are compensated for.
Where an affected owner is elderly, or has lived in her property for some time, or has fragile health or conducts a profitable business, these factors, and other reasonably objective ones, may justify larger payments.
If condemnation becomes more expensive, it's likely to be used less often. If that happens, what might take its place in communities worried about present and future job and tax losses, and eventual declines? We may be forced to recall an American tradition. Private enterprise, through private deals and financing, has found imaginative ways to build shopping malls, sports stadiums and even entertainment complexes.
This American way can lead to improved communities, even without the overuse of eminent domain by sometimes despotic and short-sighted governments.
Ronald H. Silverman is professor of real estate law at Hofstra University School of Law