Government Dines on Katrina Leftovers: The Wall Street Journal, 6/15/06


By Emily Chamlee-Wright and Daniel Rothschild

With a history in the Black Panthers and Green Party, Malik Rahim does not fit the stereotype of a property-rights activist. But that is what he's become in the upside-down political world of post-Katrina New Orleans, where government response to the storm is creating some strange bedfellows.

Nine months after the hurricane New Orleans remains in tatters, its population is down to about 200,000 from almost a half-million. Large parts of the city, from posh Lakeview to working-class Mid-City, still have few habitable buildings. Many businesses have not reopened or are gone for good. Almost a quarter of voters in May's mayoral runoff election voted absentee.

To add insult to injury, the rights of property owners who had their homes and businesses damaged by Katrina's wrath now face a more powerful and potent threat. Local government officials, armed with the public health code, eminent domain powers and a bevy of dubious legal techniques, aim to demolish buildings — and, some fear, strip titles from owners — in what are being euphemistically called "forced buyouts."

Mr. Rahim is the founder of Common Ground, a homegrown group borne of the aftermath of Katrina. It has established emergency supply distribution centers across southeastern Louisiana, including in the virtually abandoned Lower Ninth Ward, where signs reading "Somebody Lives Here" and "Eminent Domain for Who?" surround the bright blue house that serves as a de facto community center.

Common Ground stepped in where government failed. Its Lower Ninth Ward headquarters is on the only street in the district with electricity or communications. Power was restored the morning after Michelle Shin, coordinator of the group's Lower Ninth Ward Project, mentioned it during an interview on ABC's Nightline. The rest of the ward remains in darkness.

In the last nine months, liberal New Orleans has seen a radical transformation in beliefs about private property. Katrina came on the heels of the Supreme Court's decision on eminent domain in Kelo v. New London. While the city is today using its public safety police powers to justify the demolition of homes, Common Ground activists fear it may turn to full-scale eminent domain takings over the coming months. New Orleans and the surrounding communities will likely serve as a major battleground between the increasingly mainstream view of neighborhood collectivism and the renegades determined to preserve the sanctity of homeowners' rights.

The fight that has been brewing since late last year is now coming to a head. Homeowners were allowed back into the area only in December, about the same time the bulldozers arrived. The city began to "red-tag" homes, or slate them for destruction. In January, residents won an injunction prohibiting the city from demolishing homes without meeting certain criteria: Notice must be given on the city's Web site and printed in the Times-Picayune newspaper for three days, and letters must be sent to the last known address of the owner.

For homes on private property, demolitions could not begin until 30 days after notification. So far, 120 homes on the public right-of-way have been cleared. Of the 5,000 buildings initially red-tagged, some of which were unaffected by the hurricane, some 2,000 (mostly in the Lower Ninth Ward) have been listed in the Times-Picayune for destruction, according to Ms. Shin. She says that the city's Web site has not been kept up to date on these properties, rendering the city in violation of the injunction. A third of the area's housing stock could be razed.

This sends a message that will chill much-needed outside investment. If bulldozing private homes and businesses becomes par for the course after a disaster, investors will take their money elsewhere. In any case, the local government's failures regarding Katrina are by now self-evident; should they just be repeated as New Orleans attempts to rebuild?

In a city with a rich history of patronage and corruption, all this is especially worrisome. Homeowners have the right to appeal the destruction of their homes. However, no process was established; it came down to city lawyers working with Common Ground to create one ad hoc. Thus far, says a Common Ground legal coordinator, every challenge has been successful.

Yet this is often moot for those tossed into the bureaucratic maw. Some — perhaps many — residents have seen their homes bulldozed, with notices either arriving late or not arriving at all. Several residents of the Lower Ninth Ward we talked to thought the city was spuriously tagging homes "in imminent danger of collapse," the criterion it is using to demolish houses not on the public right-of-way.

They also point to the presence of local development magnates on the Bring New Orleans Back Commission and its famous recommendation of extensive use of eminent domain as evidence of perfidy.

Mayor Nagin tentatively rejected calls for widespread use of eminent domain powers, so the issue has not been at the forefront of the debate. But Mr. Rahim says it "always looms over our heads," and many fear that it is being reborn as Katrina fades as an issue for the rest of the country.

It shouldn't. This has become a fight, in many respects, between those who believe in organic urban development and those who favor political central planning.

Mr. Rahim clearly falls into the former camp. While he is no defender of capitalist principles, with hundreds of thousands still displaced, he is engaged in a struggle for what he calls "self-determination." He wants to "rebuild a community that offers opportunities to all its residents." For that to happen, he adds, property rights will have to be sacrosanct.

After Kelo, property-rights activists argued, quite rightly, that the poor and disenfranchised would be most affected by the decision. Mr. Rahim's efforts demonstrate that, on the issue of private property, Americans across the political spectrum have more in common than we often admit.

The Wall Street Journal: www.wsj.com

Ms. Chamlee-Wright, professor of economics at Beloit College, is a senior
scholar at the Mercatus Center at George Mason University. Mr. Rothschild is
associate director of Mercatus's Global Prosperity Initiative.