Eminent domain, revisited

Printed from: https://newbostonpost.com/2016/04/11/eminent-domain-revisited/

The right to own private property without reasonable government interference is a cornerstone of American freedom. In fact, the ability to own land without state intrusion has deep roots in the English common law, and, since the Middle Ages, has been a source of security, peace, and economic stability.

So important was the concept of private property to the Founders, the First Continental Congress, in the Declaration of Colonial Rights, said that “[Americans] are entitled to life, liberty, and property, and they have never ceded to any sovereign power . . . a right to dispose of either without their consent.” A decade later, this became the basis of the Takings Clause of the Fifth Amendment: “No person shall be deprived of . . . property, without due process of law.” This protects citizens from having their property confiscated in the absence of dire circumstances, such as the need to build a military facility in a time of war, and is known as the doctrine of eminent domain.

Although the states and federal government have exercised eminent domain since the earliest days of the Republic, the United States Supreme Court’s decision in Kelo v. City of New London, in which the limited scope of the government’s ability to seize property was expanded to unprecedented lengths, embraced a rejection of nearly a thousand years of well-settled precedent. No longer was the seizure of private property only permissible under the most extreme circumstances, but now it could be justified by the desire to engage in “economic development,” whatever that means.

In its most basic form, the holding in Kelo permits government entities to force property owners to sell their lands at “fair value” so that the land can be incorporated into larger redevelopment and revitalization projects. These redevelopment projects are often the source of deep profits for construction firms and real-estate speculators. By and large, it is modest communities and their residents who pay the price.

Redevelopment engineered through eminent domain pushes people out of their homes and ignores the underlying social problems that cause communities to fail in the first place.

For a moment, let us consider the practical implications of Kelo and its progeny. If the government desires to build high-end condominiums on the beach in a depressed coastal town, it can seize the property from the struggling owners, pay them a “fair market price” (to which the owners cannot object), and turn around and sell the property to a developer. In turn, the developer will be permitted to construct a new community where property values will potentially surge. The people who lost their homes will see none of the profit while the developer may benefit from substantial returns.

Even more egregious is the fact that the developers are often provided with tax breaks and incentives to engage in these redevelopment schemes. This is the very antithesis of free market economics.

Furthermore, redevelopment engineered through eminent domain does not necessarily revitalize a community.  Rather, it pushes people out of their homes and ignores the underlying social problems that cause communities to fail in the first place. Forcing the economically disadvantaged to give up the only property they own – what is essentially their only source of security – does not make the problem better, but only aggravates underlying tensions, reinforces the idea that the economy is rigged against the working poor and minorities, and sends the message that a man’s castle is inviolable only to the degree that its sale cannot profit someone else with better political connections.

When the Founders drafted the Fifth Amendment, they could not have imagined how a Supreme Court, unmoored from tradition and precedent, would use it as a weapon of experimental social engineering.

When the Founders drafted the Fifth Amendment, they could not have imagined how a Supreme Court, unmoored from tradition and precedent, would use it as a weapon of experimental social engineering.

And, on a practical level, eminent domain has resulted in a series of failed redevelopment projects where the developers stand to lose little, while the former landowners lose everything. The best example is the property at the center of Kelo itself.

More than a decade after the Supreme Court’s decision, the property where Susette Kelo’s house once stood, along with those of her neighbors, is an abandoned lot. The redevelopment project was an abysmal failure and everyone involved suffered losses. And while loss is an intrinsic risk in any business transaction, the problem here is that Mrs. Kelo was not a developer looking to profit on a real estate venture.

As the presidential election approaches, what is particularly troubling is that there remains strong support for the expanded use of eminent domain under Kelo despite heavy protests from all political quarters and a consistent abuse of the doctrine.

More than a decade after the Supreme Court’s decision, the property where Susette Kelo’s house once stood, along with those of her neighbors, is an abandoned lot.

Donald Trump’s use of eminent domain to further his Atlantic City ventures is well documented. While his socialist adversary Bernie Sanders has blasted the use of eminent domain as a vehicle to further enrich developers, Mr. Trump has embraced an expansive reading of Kelo, declaring that “I happen to agree with it 100 percent.” In fact, Mr. Trump not only agreed with the decision but opined that the policy of seizing private property from residents and small businesses in order to hand it to large redevelopers in the name of economic development was a “good” thing. This is not surprising from a man who used eminent domain to try to turn an elderly woman’s family home into a parking lot for limousines.

As election day draws nearer, the use and abuse of eminent domain should assume a more prominent place in our policy debates. It is too easy to forget the power of Kelo until the government knocks on your door with an eviction notice. Moreover, this is an issue that should transcend partisan politics, for it goes to the very heart of our economic freedom and our ability to defend against the interloping abuses of an incompetent behemoth government.

Under Kelo, none of us are safe. The time for a substantive discussion is long overdue.

Glen Sproviero

Glen Sproviero

Glen A. Sproviero is a commercial litigator in New York. Read his previous columns here.

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