Kelo v. New London Briefs

Laurence Aurbach writes:

Tomorrow, February 22, 2005, the Supreme Court will hear the property rights case Kelo vs. New London.  The Court will review a Connecticut state court ruling that allows the city of New London to eliminate 15 homes and businesses for a Pfizer Corporation expansion. In my opinion, justice demands the "public use" provision of eminent domain be clarified to exclude purely private gain.

Planners, developers, public officials, property rights activists and many others will be watching with keen interest. The case has the potential to redefine the practice of eminent domain in the U.S., and in particular an increasingly common practice used by municipalities: confiscate a group of private properties, consolidate them, and sell/give the resulting parcel to another private owner.  Often the new owner is a multinational corporation.

As best I can determine from the docket, forty amicus briefs have been filed for this case, twenty-five in favor of the property owners.  Many of these discuss property rights and constitutional issues.  However, this amicus brief by John Norquist focuses on economic development -- and economic development is the city’s reason for taking property, after all. His main points:

• The private sector has been successful in bringing about healthy economic development without the use of eminent domain.
• Prohibiting the exercise of eminent domain for purely economic development purposes will not prevent redevelopment given the array of other incentives available to government authorities.
• Allowing existing landowners to participate in economic development projects is a common practice in many countries, and is a viable alternative to condemnation.

Norquist concludes:

But, taxpayers are now being asked to underwrite the risks of real estate-related economic development ... for speculative acquisition of real estate.  This has resulted from the recently acquired taste for expediency among certain members of the private development community who hunger for government to speed up the development process and/or cut existing landowners off from the economic potential of their land ... Lured by proffered visions of tax base enhancement and upscale amenities, some local officials are supporting this sort of "corporate welfare," and it not only raises serious Fifth Amendment questions, but skews the evaluation of projects and their long range community impacts.

Norquist is author of The Wealth of Cities, president of the Congress for the New Urbanism, and former mayor of Milwaukee.

Jane Jacobs, urban sociologist and author of The Death and Life of Great American Cities, also filed an amicus brief. If anything, it’s better than Norquist's: Comprehensive, experienced, and well-structured. Jacobs argues from the perspective of an expert in the harms of urban renewal. In one interesting section (I.C.3), Jacobs addresses the problem of "holdout" owners.  Holdouts are usually cited as a justification for eminent domain, and Jacobs describes two ways that developers deal with holdouts without any government intervention. Her strategies are 1) secret negotiations, and 2) "most-favored nation" contracts (same price must be paid to all).