A stealth war on the poor: Newark (NJ) Star Ledger, 8/2/05


By Bill Potter

By now much of the nation is up in arms over Kelo vs. New London, in which the Supreme Court by a 5-4 majority upheld a municipality's power to take a person's home, pay the homeowner "just compensation" and then hand it over to a new owner who has an approved plan for "economic development" — promising more jobs or higher tax revenues.

In short, after Kelo, your home is not your castle if somebody convinces your mayor and council that he has a better idea for it.

But now the public is aroused. According to a recent Star-Ledger article, 25 states are amending their laws to put "public use" back into the equation so that governments cannot take your house or business for a mere "public purpose," namely economic development. Only if it is needed to make way for a new highway, school or park or other legitimate public use should your property be taken.

New Jersey needs such a law, which must also delete the "underutilization" rationale for a taking. Under that standard, a property gets judged not by what it is but by what it is not. So a modest cottage can be declared "underutilized" and a source of "blight" because it is not a McMansion. A mom-and- pop general store is "underutilized" and an "area in need of redevelopment" — the statutory euphemism for "blighted area" — because it is not a WalMart. When "economic development" is linked with "underutilization," not a house, building, business or acre of New Jersey is safe from a municipal taking.

Democratic gubernatorial candidate Sen. Jon Corzine has announced his support for limiting future "takings" if elected. His Republican counterpart, Douglas Forrester, has signed on in equally strong terms. So hope springs eternal that whoever wins in November will restore balance to a system that now favors the same developers and consultants who have made pay-to-play their favored means of doing business in the Garden State.

But don't count on it, not just yet anyway. The same forces that "liberalized" New Jersey's 50-year-old Blighted Area Act in 1992 — so that, a decade before Kelo, almost any property could be declared a "redevelopment area" under the "underutilization" claim, then taken away and handed over to a "redeveloper" selected without competitive bidding — will doubtless be revived.

At the least, the next governor must persuade a majority of 80 Assembly members and 40 state senators to join him in restoring the public to the process. This will require several procedural changes — such as giving notice of municipal reviews to tenants and not just to landlords who may not care if their buildings are "taken," provided the price is right.

For at its core the economic development rationale for "takings" is often a euphemism for a stealth war on the poor and near poor. Getting them out to make way for tonier new residents is often the unspoken agenda for replacing garden apartments with high rises or malls.

In Long Branch, retired cottage dwellers will be displaced to make way for condos for the rich; in Lodi, trailer park dwellers face eviction to make way for upper-income housing and shopping — and on it goes across the state.

Yet the economic development often falls far short of expectations. Few mayors or council members are competent in matters of commercial development, however hard they may try. Will new chain stores attract new growth or will they sap customers away from locally owned businesses, causing "vacancy" signs to sprout on Main Street? Will a new mall boost a town's employment or is it a minimum wage-paying blighted area in waiting? Some of today's redevelopment is directed at weed-choked parking lots left over from the "urban renewal" movement of the 1960s.

Finally, developers are typically far better negotiators than are locally elected officials. They know how to insert escape clauses inside mind-numbing redevelopment agreements that only a blurry-eyed few will ever read and fewer still will comprehend. So when rosy projections of future income or rents plummet, redevelopers almost always have an "out" to take the money and run.

To be sure, every mayor or candidate for local office wants more jobs and increased tax revenues; what, then, is he to do when developers come knocking at city hall, promising the next urban "renaissance" if only the town will hand them a big slice of property and abate their taxes for 20 years?

These three tips should help:
  • First, reject any proposal that calls for removal of local residents. If those living in that "blighted area" won't gain from the project, it's a war on the poor by another name.
  • Second, never go into direct "partnership" with a developer. This creates a conflict of interest between governing and helping for- profit partners. Princeton Borough made this mistake with its $13.7 million redevelopment project, which at least stayed on municipal land. The council and mayor have tied the town's finances to the business fortunes of a builder who's now short of cash to complete the job. The council thought it would retain more "control" in this way, but the control can work the other way just as easily.
  • Finally, think small. Big projects mean big risks. Thinking small means cultivating local business and entrepreneurs who will put their sweat equity into redevelopment, one building or one block at a time.

In short, Kelo vs. New London may have been a tragedy for Mrs. Kelo, but it has done us all a favor by awakening the public and politicians to the need for reform — before the next taking takes place in your town or mine, your house or the one I call home.

Star Ledger: www.nj.com/news/ledger

Bill Potter, a former assistant state public advocate, is a lawyer in private practice in Princeton. He is an adjunct professor of environmental law at Rutgers Law School in Newark and was a lecturer in the politics department at Princeton University.