10/17/2005

Eminent Domain — Awfully Close to Home: Washington (DC) Dateline, 10/16/05

By John Hall

Real estate speculators reportedly have been bidding up values on storm damaged property with an idea of rebuilding some of New Orleans' run-down neighborhoods into showplaces. Maybe it has to be this way if the city is to rise again, but when people are desperate for a place to live, this seems like a particularly cruel turn.

One question is where the power of eminent domain comes in, and on whose side it will be invoked. You can teach it both ways. Speculators could lose a bundle if they buy up parcels at a premium and the city or state invokes eminent domain for a public purpose like parks.

On the other hand, flood victims may have no rights if the city decides to seize their property. The Supreme Court ruled last spring in Kelo v. New London that the Constitution offered no protection to homeowners if a municipality decided to take their property for private development. So the city may be free to take that route if it chooses - and Louisiana courts allow it.

This country is getting acquainted all over again with the uses and abuses of the power of eminent domain. The Kelo case was decided on a 5-4 vote. There has been a slow burn about it ever since.

The idea that you can be forced to give up your home for an oncoming interstate highway is one thing. That's a public purpose. But to give it up for a private, profit-making enterprise takes some getting used to.

The Institute for Justice, a libertarian think tank which specializes in courtroom litigation, has taken the matter back to the states, hoping to get a more favorable reception there following its Supreme Court defeat.

The Ohio Supreme Court accepted the institute's appeal on behalf of a Norwood, Ohio couple who are about to lose their home to a politically-connected developer who is about to profit from the taking of private land. The developer wants to bulldoze their neighborhood and put in chain stores, offices and condominiums.

The pressure on municipalities to use eminent domain for such purposes isn't difficult to understand.

Usually, some industry has abandoned the city and unemployment or blight may be a problem. In the case of New London, it had lost a submarine base. The public purpose sometimes is a noble one - saving a community from slow strangulation or rebuilding Baltimore's waterfront.

But to many mayors with developers in their waiting rooms, eminent domain has become the magic elixir that can grow businesses, create jobs and strengthen the tax base, not to mention build their political futures.

In Congress, however, this issue is starting to cut the other way. It has become one of the populist hot potatoes of the year. Bills are being introduced to forbid the use of eminent domain for anything other than public purposes.

What's interesting are the sponsors. Sen. Barbara Boxer and Rep. Maxine Waters, both liberals, along with conservatives Sen. John Cornyn and Rep. Richard Pombo joined together like birds of a feather on eminent domain abuse legislation. Those are people who ordinarily agree on nothing.

The Cornyn-Boxer bill would apply to the federal government, but also limit federal funds for private economic redevelopment using eminent domain for city and state projects.

Waters said her concern in New Orleans was that the "rich and powerful" would abuse eminent domain "to take property that belongs to poor people to get them out of the city."

Others have expressed concern that those who evacuated will simply have their property condemned and confiscated for redevelopment.

The big problem, according to the Institute for Justice, is that the courts are placing such a low value on home ownership.

In the Ohio case, the trial court found that the well-kept neighborhood was not blighted but agreed it was "deteriorating." Its reason - unbelievably – was that there were too many homes or small businesses owned by the people who lived there, according to the Institute of Justice.

Its definition of deteriorating "could include virtually every residential neighborhood in Ohio and the rest of the country," said Bert Gall, an attorney for the Institute.

Get this straight: a court has ruled that because too many homes were owned, that was a sign of neighborhood deterioration, and therefore the homes could be seized for private gain.

A lot of people may think Norwood looks like their own neighborhood.


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