----- Original Message ----- From: "Nathan Newman" <nathanne at nathannewman.org> To: <lbo-talk at lbo-talk.org> Sent: Sunday, July 24, 2005 9:15 AM Subject: Re: [lbo-talk] Morris: A reasonable proposal for emminent domain
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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