Tuesday, 23 June 2015

Lessons From a Little Pink House, 10 Years Later

The Productivity Commission wants it, and the politicians are eyeing it up. The Americans call it "eminent domain"; plan-speaking would simply call it theft--theft of your land, allegedly justified on the grounds of 'the public good.'

In this Guest Post Ilya Somin, author of recent book 'The Grasping Hand,' explores how well -- no, let's be honest -- how badly eminent domain has worked out recently for Americans.

Lessons From a Little Pink House, 10 Years Later

June 23 marks the 10th anniversary of Kelo v. City of New London, when the Supreme Court held in a 5-4 ruling that government could use eminent domain to take private property for "economic development." At issue in the case were 15 homes, including a little pink house owned by Susette Kelo, in the city of New London, Conn., which wanted to transfer the properties to a private nonprofit with plans to revitalise the area. But after the court ruled and the houses were razed (with the exception of Ms. Kelo’s, which was moved at private expense), those plans fell through.

The condemned land remains empty, housing only a few feral cats. After Hurricane Irene in 2011, the city used it as a dumping ground for debris. Yet the first real development since the Supreme Court’s controversial decision might now be on its way: New London Mayor Daryl Finizio, who was elected in 2011 as a critic of the government taking, recently announced a plan to turn the former site of Ms. Kelo’s house into a park that will "serve as a memorial to all those adversely affected by the city’s use of eminent domain."

It would be a fitting tribute. Although the Supreme Court’s decision in Kelo was consistent with precedent, it was nonetheless a serious error.

The Fifth Amendment allows governments to take private property only for "public use." Until the early 20th century most courts interpreted those words to cover things such as roads or power lines—projects owned either directly by the government or by private owners who have a legal obligation to serve the entire public, such as utility companies.

This limited understanding of "public use" predominated at the time of the founding, and also when the Fourteenth Amendment made the Bill of Rights applicable to state governments in 1868. "The despotic power, as it is aptly called by some writers, of taking private property, when state necessity requires, exists in every government," Supreme Court Justice William Paterson, an influential signer of the Constitution, wrote in a 1795 case. "It is, however, difficult to form a case, in which the necessity of a state can be of such a nature, as to authorise or excuse the seizing of landed property belonging to one citizen, and giving it to another citizen."

By the 1950s, however, the original meaning of "public use" had been largely abandoned. Legal elites came to believe that government planners should have nearly limitless authority to take property to promote growth and combat blight afflicting the urban poor.

The Kelo majority concluded that virtually any potential public benefit qualifies as a "public use"—even if the government cannot prove that the benefit will ever materialise. The development project for which the homes in New London were taken quickly fell apart, as critics had predicted. When the Connecticut Supreme Court, which heard Kelo before it reached the U.S. Supreme Court, upheld the takings in 2004, Justice Peter Zarella offered in his dissent the prescient warning that there was "scant evidence to suggest that the predicted public benefit will be realised with any reasonable certainty."

Condemnations based on economic development and blight often harm the very communities they are intended to help. Since the 1940s, hundreds of thousands of people—most of them poor racial minorities with little political influence—have been displaced by such takings. Often their property has been transferred to well-off developers or other influential private interests. Victims of eminent domain often cannot even vote against the local politicians who authorized the takings. By the next election, they may have already lost their homes and been forced out of the community.

In addition to the direct destruction they cause, such uses of eminent domain impede long-term development by undermining America’s historically strong property rights—long an important incentive for investment.

All of this suggests that Kelo should be opposed not only by judicial originalists, but also by those who subscribe to "living Constitution" theories that emphasise the need for courts to protect "discrete and insular minorities" who cannot fend for themselves in the political process.

Although Kelo was a painful defeat for advocates of property rights, it led to important progress. The ruling generated an enormous backlash: More than 80% of the public disapproved of the court’s decision. The opposition cut across racial, partisan and ideological lines. Kelo was denounced by such unlikely bedfellows as Ralph Nader, Rush Limbaugh and the National Association for the Advancement of Colored People.

Since 2005, 45 states have passed laws reforming eminent domain. Some of these reforms, unfortunately, only pretend to restrict takings for economic development. Many states, such as Colorado and Texas, still allow eminent domain to eliminate "blight," which is defined so broadly that almost any area can be condemned. Nonetheless, real progress has been made in numerous states, such as Arizona and Florida.

The debate over Kelo also broke the seeming consensus on "public use" among jurists and scholars. Before Kelo, most experts believed that the debate had been conclusively settled in favor of governments’ power to take property for virtually any purpose. No informed observer would make that claim today. Several state supreme courts have rejected Kelo as a guide to the interpretation of their state constitutions’ "public use" provisions.

Kelo and its aftermath are far from the end of the struggle to restore constitutional protection for property rights. But when future generations visit the park where the little pink house once stood, they may well remember this case as the end of the beginning.

** Ilya Somin, a law professor at George Mason University and adjunct scholar at the Cato Institute, is the author of "The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain" (University of Chicago Press, 2015). This post originally appeared at the Cato at Liberty blog, from a column in the 'Wall Street Journal.'


1 comment:

  1. A good story. The California high speed rail line is seeing people being pissed on when their land is sought even though the project is a white elephant that may never be completed.

    I wonder how much of the problems with aquiring private property would be resolved if the state was prepared to compensate the owners in a way that reflected more than just the book value of the asset. Memories are worth something and legends are used by Maori to extract money from the state. Maybe its only OK for natives to be bribed?


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