When David Wright retired from his factory job in 1997, he poured just about all his savings into a handsome brick house in the Sunset Manor subdivision [of Sunset Hills MO]. "This was our dream," said David's wife, Lorraine. "We were set here for the rest of our lives."
But the dream turned sour when the city council of this St. Louis suburb decided last year to bulldoze all 254 homes in Sunset Manor and turn the land over to a shopping-mall developer. "We cried and we prayed," Lorraine Wright recalled. "And we put a lot of hope into the Supreme Court, because they were supposed to decide whether this kind of thing is legal."
So the Wrights were crushed at first when the U.S. Supreme Court ruled on June 23 that the Constitution does not stop cities from seizing homes to make way for commercial development projects. "What we didn't realize right away," David Wright said, "was that the decision would be a positive development for those of us who don't want to see people's houses taken away."
Here in Missouri and all over the country, the court's decision in Kelo v. City of New London has sparked a furious reaction, with politicians of both parties proposing new legislation that would sharply limit the kind of seizure the court's decision validated.
As a result, a decision first seen as a key legal victory for cities that want to use eminent domain for private projects has turned into a major setback on the political front for pro-development interests.
The popular backlash has slowed or blocked many pending projects, as developers, their bankers and local governments suddenly face public furor.
In Sunset Hills, the bank that planned to finance the proposed new mall abruptly withdrew its funding amid a noisy political argument after the Kelo decision. That means the Wrights' home is safe, for the time being but hundreds of their neighbors who had agreed to move out are left in limbo.
Three states have already passed new laws in response to the Kelo decision.
The statutes in Alabama and Texas sharply curtail eminent-domain condemnations for private development. "We don't like anybody messing with our dogs, our guns, our hunting rights or trying to take property from us," said state Sen. Jack Biddle, a sponsor of the Alabama law. Delaware's new statute permits condemnation but sets new procedural requirements for local governments.
Larry Morandi, an analyst at the National Conference of State Legislatures, predicts a rush of new laws next winter, when 44 state legislatures will be back in session.
"Most if not all state legislatures will be dealing with eminent-domain laws next year," Morandi said. "The outcry has been so sharp that many states already have task forces or study committees at work on this issue this summer. Most of the proposed legislation is designed to restrict the kind of governmental action that the court upheld in Kelo ."
The Institute for Justice, a Washington-based libertarian think tank, said that hundreds of local governments around the country are also debating new ordinances to restrict the use of eminent domain. Many have passed laws this summer barring any seizure of private property for commercial development. Other cities are tightening the conditions that could authorize such seizure.
Several members of Congress have introduced legislation that would bar federal financing for any local government project that condemns property for a commercial development. But Congress did authorize governments to condemn property for the benefit of energy companies in the new energy bill that President Bush signed last month.
The right of government to seize private property for public projects is specifically authorized in the Constitution as long as owners receive "just compensation." A farmer whose cornfield lies in the path of a proposed expressway can be forced to sell the land even if he wants to keep farming there.
Traditionally, this power of eminent domain was used for government functions such as parks and highways. But more and more local governments have begun seizing property from unwilling owners for the creation of industrial parks, hotels and shopping centers.
This trend was not widely recognized until the Supreme Court decision in June that validated the practice. An issue that had been primarily of interest to local governments and land-use planners quickly hit every editorial page in the country, with widespread condemnation of the court's 5 to 4 ruling.
Some interest groups, including the National League of Cities, endorsed the ruling. But the overall political reaction was intensely hostile, sparking a rush of proposed legislation.
Supreme Court justices may not be unhappy about this reaction. Justice John Paul Stevens, author of the majority opinion in the Kelo case, said in a speech this summer that he did not agree with the property seizure in that case but felt that the law required him to uphold it nonetheless.
Justice Sandra Day O'Connor, who dissented in Kelo, warned that permitting seizure of private property for private development would have a reverse Robin Hood effect, giving governments "license to transfer property from those with few resources to those with more."
That pattern is clear here in Sunset Hills. This affluent town is dotted with large $600,000 homes on green hills surrounding a country club. But the Sunset Manor subdivision, the most ethnically mixed neighborhood in town, is made up mainly of small homes on small lots, with prices around $100,000.
The city council here, known as the Board of Aldermen, decided last year to level the 65-acre subdivision so that Novus Cos., a local developer, could build an upscale shopping mall to be called Main Street at Sunset. Of the 254 homeowners, 229 have agreed to sell their property to Novus. The owner of a shopping mall two miles away has financed the efforts of the holdout owners to block condemnation of their properties.
In July, the alderman authorized condemnation proceedings against the remaining owners including David and Lorraine Wright, a black couple who had planned to spend the rest of their lives in Sunset Manor and thus declined to sell their home.
"We thought at first, you know, we didn't have a prayer," David Wright said. "How can you fight City Hall? And then the Supreme Court ruled against people like us.
"But the reaction to that decision has been so strong. The project is kind of stopped. So now we are thinking maybe we can stay here."
Novus, the developer, said it is searching for new financing. Meanwhile, the project is on hold a painful development for the 229 homeowners who had agreed to sell their houses and move.
"The collapse of the financing for the [shopping mall] project has left a couple of hundred families in a terrible place," said Pete Snyder, a spokesman for the developer. "A lot of them are already paying the mortgage on their new home, but now they don't have a buyer for the old one. This has to be resolved, and condemning those 25 houses is the way it has to go forward," he said of the holdouts.
But Will Aschinger, a leader of the anti-condemnation group, thinks the political reaction to the Supreme Court decision has effectively saved the Sunset Manor subdivision. "The backlash against that decision is the best thing that ever happened to us," he said with a smile. "No matter what the court says, I don't think cities can get away with this kind of stuff anymore."
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