[lbo-talk] Morris: A reasonable proposal for emminent domain

Nathan Newman nathanne at nathannewman.org
Sun Jul 24 06:15:15 PDT 2005


The insanity of this debate among progressives is still that we want to give compensation when the government evicts landowners, but capitalists need pay nothing when they knock down a building and put it to other uses.

-- Nathan Newman

----- Original Message ----- From: "Michael Pollak" <mpollak at panix.com> To: <lbo-talk at lbo-talk.org> Sent: Sunday, July 24, 2005 7:54 AM Subject: [lbo-talk] Morris: A reasonable proposal for emminent domain

[I found this interesting. Not only the specifics of the "community premium," but also the larger legal point, that there is nothing stopping states from regulating emminent domain much more closely than the federal law stipulates after Kelo. At the state level we seem to have the power to rule out everything we think is unjust.]

[I thought there was a little confusion in the end -- if corporations rule the process by playing localities off against each other, then it's not clear that the local level is "where this debate belongs" in principle. It's possible to imagine emminent domain competition analogous to tax-break competition. But even if the local level is not the ideal point of regulation, simply that there is so much potential power at that level is a very interesting point.]

URL: http://www.alternet.org/story/23351/

The Politics of Land Grabbing

By David Morris, AlterNet. Posted July 7, 2005.

The central question at the heart of the eminent domain debate is, how

much do we value community?

The Supreme Court's June 23 decision to allow the city of New London,

Conn. to condemn its citizens' homes simply to generate more municipal

tax revenue offended the vast majority of Americans, myself included.

In a blistering dissent, Justice Sandra Day O'Connor declared,

"Nothing is to prevent the state from replacing any Motel 6 with a

Ritz-Carlton, any home with a shopping mall or any farm with a

factory."

That's the bad news.

The good news is that the Court's decision does not prevent states and

localities from adopting a different approach. "We emphasize that

nothing in our opinion precludes any state from placing further

restrictions on its exercise of the takings power."

The eminent domain debate now returns to the local and state level,

where it ultimately belongs. All states have statutes or

constitutional provisions governing the conditions under which

governments can take private property. Michigan, New Hampshire, New

Jersey, South Carolina, Arkansas, Missouri, Kentucky and California

significantly limit that authority. A 1976 California court opinion

describes their approach. Eminent domain "never can be used just

because the (city) considers that it can make better use or planning

of an area than its present use or plan. ... (I)t is not sufficient to

merely show that the area is not being put to its optimum use, or that

the land is more valuable for other uses" to justify condemnation of

property.

The laws of Kansas, Maryland, Minnesota, New York, North Dakota and

Connecticut, conversely, grant local and state governments much

broader leeway.

The debate about eminent domain centers on two questions. When can

government take private property? What should it pay for that

property?

The Supreme Court decision focused on the first issue, the definition

of "public use" under the 5th Amendment. At the state and local level,

we might more profitably initiate the conversation by focusing on the

second, the definition of "just compensation."

Under current laws, "just compensation" means current market value. If

government condemns two identical houses in the same neighborhood it

pays the owners an identical amount. This is true, even if, as was the

case in New London, one family had lived in its home for several

generations while another was renting on a short-term lease.

Common sense, however, tells us that the value of a place to the

occupant is related to the amount of time he or she lives in it. And

the value of the tenant, whether a person or a business, to the

neighborhood also increases with the length of occupancy. Intangibles

are involved here, costs and benefits difficult to quantify but

indisputably real.

The central question before us, then, is how do we value community?

Here is my suggestion:

* All owners receive the current market value of the real estate.

* Government adds a premium based on the length of time the family

or business has occupied the land, or perhaps, lived within the

immediate neighborhood. Businesses are included because locally

owned, long-lived businesses constitute an essential node in a

strong community network.

* The premium paid increases by 1 percent of the market value for

every year of continued occupancy, kicking in after a minimum of

10 years.

* The premium is paid not to the owner, but to the occupant. This is

fairer, because it is the longevity of the occupancy, not the

longevity of ownership, that strengthens the sense of community.

It is also more equitable, because renters tend to be poorer than

owners.

In sum, the appreciated market value of the property goes to the

owner. The appreciated community and social value of the property goes

to the occupant. Such a policy begins to internalize the social value

of property into the cost-benefit equation. That is as it should be. A

municipal corporation, unlike a private corporation, should take into

account the costs of dislocation to the individual and the

neighborhood.

The "just compensation" debate forces us to decide whether, and how,

we value community, rootedness, continuity, cohesion, connectedness.

Having answered that question we can move on to the $64,000 question.

Under what circumstances should the eminent domain power be exercised?

Virtually everyone agrees that when the government takes private

property to build something that clearly and directly benefits the

entire community--schools, roads, parks--it is acting for a public

purpose.

The thorny question, and the one with which the Supreme Court

struggled, is what to do when the government seizes private property

to create jobs or increase tax revenue or some other economic

development objective.

Three options are available. We can accept the Court's philosophy.

Allow a person's home or business to be taken for virtually any

development. But as the outcry over the Supreme Court's decision

indicates, most of us would find that option unacceptable.

We can allow the taking of property for economic development only

under rigorous standards. We can require an economic impact statement

that not only evaluates in comprehensive fashion costs and benefits,

but includes an analysis of the probability that the benefits would

actually materialize. That last rarely if ever occurs today. The

analysis would take into account the true dislocation costs to

individuals and the community. This is never done today.

It may be possible to create rigorous standards to evaluate the net

benefit of a proposed development project; but it will be difficult to

enforce those standards. As Adam Hellegers has wisely noted,

Corporate influence...may prevent local officials from performing

the rational calculus needed to decide whether a taking's

displacement costs--including the loss of valuable affordable

housing stock, small business matrices and viable communities--are

outweighed by unenforceable promises, or no promises at all, of job

creation, income, sales, and property tax revenue, and speculative

spin-off spending.

The third option is to absolutely prohibit the taking of private

property for economic development. Washington's Constitution does so.

In early 2005, Utah stripped its redevelopment agencies of the power

of eminent domain.

The arguments in favor of an absolute prohibition, or an extremely

circumscribed eminent domain authority are persuasive. The eminent

domain process itself is unfair. As Jane Jacobs, renowned urban

historian and a keen observer of urban redevelopment efforts noted in

an amicus brief to the Supreme Court, "Condemnations generally benefit

the politically powerful while the costs fall on the poor and

politically disadvantaged."

Eminent domain is exercised almost always to acquire large tracts to

enable massive building projects: stadiums, high-rise office

buildings, large factories. Many of these projects do not generate net

benefits at all. All of them undermine close-knit, rooted communities

and a diverse, locally owned business sector.

A final reason to strip local governments of their right to seize

private property for economic development purposes is that it may

actually strengthen the governments' independence. As Michael Kinsley

observes,

When the local government showers a big development with money and

favors, it's usually not about sovereignty but about lack of

sovereignty. Private developers play jurisdictions off against one

another, extracting concessions from all that none would actually

make a sovereign decision to give.

The Supreme Court decision disappointed many. But the debate is far

from over; it has shifted to the local and state level -- which is

where, ultimately, it should be decided.

David Morris is co-founder and vice president of the Institute for

Local Self Reliance in Minneapolis, Minnnesota and director of its New

Rules project.

© 2005 Independent Media Institute. All rights reserved.

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