An example of abuse.

The worst structural abuse of eminent domain is its use to take private property because someone else's use of it might be more profitable. (Follow the link for some background.) The legal issue turns on the definition of "public use" which can be defined so broadly as to include condemnation of land for a new shopping center. You get a lot of that with public Port Districts where the Port condemns the land and then turns around and leases it long-term to a private shipping company. That passes for public use.

And what's really shocking is to read that D.C. Mayor Anthony Williams thinks that prohibiting such use of eminent domain is a bad thing. It pains me to read that he supports such a truly hideous and bankrupt policy. I hope that he is not typical of Democratic Party thinking on this issue. The irony of course is that the likely gainers (from such abuse of eminent domain) are fat-cat corporate-Republicans who claim that they will "bring jobs" etc etc in their quest for government advantage such as being able to assemble land outside the market.

When will Democratic politicians see through this rubbish? There is certainly common-ground to be made on this issue with the more rational right-wing private-property enthusiasts; and that's what politics is all about -- trying to strike deals on issues with people you might otherwise detest. Democrats should make those deals rather than leaving the field to the Republicans.

•••

Here's more background: Panelists discuss eminent domain.

People who favor giving government power to seize land for new houses and stores pleaded their case Wednesday in Cleveland, but they won't have a say when the nation's top court hears the matter early next year. Panelists at Cleveland State University exhumed and dissected Lakewood's Issue 47, which was narrowly defeated last fall. Voters were asked whether the city should be allowed to use its powers of eminent domain to take land after paying fair market value so private developers could build upscale housing and shops in the West End neighborhood. (emphasis added.)

It amazes me that people can even think that the matter is worthy of discussion. Here is where we see the worst synthesis of government and capital (shades of those "public-private partnerships" -- what a euphemistic & soothing term).

Comments

[Glen Raphael]

There's a good Mother Jones http://www.motherjones.com/news/qa/2004/12/12_406.html>interview on this too.

I'm a supporter of the Institute for Justice, sort of a more-libertarian ACLU that defends citizens against these sort of http://www.ij.org/private_property/>abuses. So most of the time I hear about eminent domain actions, it's in the context of an IJ case in their newsletter. The typical bad eminent domain case you hear about involves a property developer who wants to build a Home Depot or Walmart somewhere, so he convinces his friend the mayor to declare the neighborhood "blighted" so he can get the land at a bargain basement price. The developer saves a bundle on acquisition costs, and the the mayor gets most of his kickback in the form of campaign contributions to help his next reelection bid.

That's part of why we talk at cross-purposes: when I think of eminent domain the picture in my mind is of Donald Trump trying to http://www.ij.org/private_property/atlantic_city/index.html>enlarge his casino's limosine parking lot by kicking an 80-year-old woman out of her home, whereas when you think of eminent domain you picture Central Park. :-)

[David Sucher]

Yup. you got it, Glen.

And I think we can get rid of the absuse by tightening substantially the "public purpose" criterion so that we eliminate those projects which are merely, at best, a "public preference."

[Tim Hulsey]

I hope that he is not typical of Democratic Party thinking on this issue.

He is.

[Laurence Aurbach]

It's nearly impossible to find on the internet any defense of eminent domaim for private gain. I'm a supporter of the IJ position and I'm rooting for them in the Kelo case coming up Feb. 22. Still, in the interest of playing devil's advocate, this policy advanced by the Neighborhood Capital Budget Group seems reasonable on its face -- although likely open to abuse:

There are some legitimate uses of eminent domain, however, in areas where there is a large amount of vacant land with absentee landlords. Often, what looks like a single large piece of vacant land is actually many separate parcels owned by different individuals. Much of this land may be delinquent on its property taxes or off the tax rolls altogether. In many cases, it is difficult if not impossible to even figure out who owns the land. For a private developer to invest the time, effort and expense to locate all these property owners and negotiate with them separately is often a major barrier to development. By taking on this part of the project itself, with its ability to fast-track the process, the City is often able to bring jobs or investment to areas that otherwise would remain vacant and unproductive. In these cases -– where there is no displacement of residents or businesses, and the project would benefit the community –- the power of eminent domain can be helpful.

[David Sucher]

"Much of this land may be delinquent on its property taxes or off the tax rolls altogether. In many cases, it is difficult if not impossible to even figure out who owns the land."

If you don't mind, these arguments sound like makeweights.

1. ...delinquent on its property taxes..."

So? Why is that an excuse for condemnation? And the land will be put up for auction in some number of years at which point the govtcan buy it.

2. "...off the tax rolls altogether..."

What does that mean? I don't think it means anything in this context.

3. "...difficult if not impossible to even figure out who owns the land..."

Even if so, which seems questionable, the solution here is a quiet title action. There may be disputes about who owns what but if no one comes forward to pay taxes properties do revert to the state. Eminent domain seems like an odd (and unneeded) solution forfailure to pay taxes.

I can understand that a local government mightlike to see an area developed but a "public preference" is not to my mind a "public use" with a "public purpose" which justifies a forced sale.

The larger issue is also unpersuasive. If small property owners don't find it worthwhile to develop their properties, why would it economic make sense for the land to be aggregated and developed by one owner?

The basic underlying economics are either there or they are not. In an attractive area, very small site will be developed and in fact such pattern usually makes a more interesting area. The excuse of "blight" has destroyed very many poor but decent neighborhoods and I am disappointed to hear anyone still voicing it. I understand the motivations and the reasons why these deals look attractive but that doesn't mean that they are good policy.

The reality that drives such use of eminent domain is that a well-located area (e.g. near a CBD)is filled with poor and "undesirable" people who are an impediment to "better" people moving in. So you move out the whole lot all at once. Yes, I like tonier, gentrified, safer neighborhoods too but this is not the way to get there. Some people may think that it makes sense; I don't.

[Glen Raphael]

David,

We're definitely on the same page with your last comment. That sort of redevelopment has been going on since the 50s so it's hard to imagine piecemeal reform will fix it now, but I suppose we can hope. (There's an old book I've heard good things about called "The Federal Bulldozer" that covers the 50s and early 60s.) Slums can give a city a bad image. But slums are where the poor can afford to live and work. When you knock down slums, you're cutting off bottom rungs of the economic ladder. But knocking down slums is appealing to politicians because slums are full of people who don't vote, don't pay much in taxes and don't whine too much at city council meetings.

On the other hand, I like San Francisco's SOMA neighborhood so much I plan to move there soon, and much of what makes it attractive now is the result of a variety of renewal projects that made extensive use of eminent domain. (And much isn't, of course. Merely relaxing zoning and building restrictions a bit to /allow/ redevelopment goes a long way to allowing the natural evolution of a city to meet new needs. "Multimedia Gulch" is where a bunch of software companies on their own initiative turned run-down warehouse and apartment spaces into nice offices. But the new parks and museums and convention centers are...also quite nice and useful!)

We want the same things; the difference is over strategy. When i look at regulatory institutions I tend to see a lot of bathwater that needs throwing out while you're convinced there must be a baby in there somewhere that needs keeping.

Maybe a better analogy: You know how when you buy a new computer, for the first few months it works really well? All the software on it is stuff you needed to have and bought recently so you know where to find your files and your programs and how to use them and they all work well together? But then over time as you do more work on the computer and install more software it gets progressively more fragile. You have more and more programs and files you don't remember how to use or even what they are there for. It gets harder to use to do the things you want to do. Eventually the best thing to do is sell or give it away and buy a brand new computer and start fresh.

Our government is like that. We asked it to do too much, installed too much software on it (by passing laws) and it doesn't really work well any more. You could try to keep patching and upgrading, fixing the bugs in all the old programs but I'm inclined to toss the whole thing out and start over fresh.

(Incidentally, your Three Rules would make a nice "fresh start" on zoning/building ordinances. It's a shame that, politically, the only real option is to consider them an addition to the existing regulatory thicket rather than a replacement for a large part of it.)

[JRoth]

David-

Responses to a couple things you've said:

First, I think that the Democratic Party, as a whole, doesn't have much of a position on ED. Whereas Republicans have libertarian principles that they ignore when convenient, Dems have the same fundamentally open attitude towards ED that you do, and so bridle less at its abuse (it should be the other way, I know, but...). More important, many small-time Dem politicians are mayors of old cities (just like Mayor Williams) and are desperate for investment, any investment.

Maybe it's because of your experience in a fundamentally healthy, relatively young city, but your response to the position posted by Lawrence was the opposite of mine. I found myself nodding in agreement as I read that paragraph, because, in the former Steel Valley near Pittsburgh (and less so in the city itself), those circumstances pertain all the time. Your shrugging off of #1 is especially idealistic. PA is a property-rights state, and as such, treats the taking of property - taxes paid or no - very skeptically. You can be owed back taxes worth more than the property, and you'll still face months, if not years, of litigation. And that's if the owner doesn't have good legal backing.

I accept your principled opposition to ED for private development (and largely agree), but your rejection of the "larger issue" is, again, idealistic to me. Real-life example: East Liberty neighborhood of Pittsburgh, formerly the 3rd biggest shopping district in PA. Victim of a lethal mix of white flight and urban redevelopment (complete with a pedestrian mall) in the 60s. Among many other problems, an old Sears sat vacant on the edge of the CBD, adjecent to a half dozen small properties, most of which were vacant. Home Depot wanted the site, but wouldn't/couldn't do it with the small properties in place. A couple wouldn't sell. So what do you do? I know the impractical Libertarian answer, but I mean a real solution. Now, to be honest, I don't know whether ED was ever used, but I know its threat was critical to getting reluctant property owners to sell (one of them actually negotiated a new building for his successful, long-running pizza place). Take away that threat, and Home Depot doesn't happen.

Obviously, the small property owners could never have redeveloped the Sears site. And the project has been a success by any measure - the neighborhood is now a locus of interest from businesses and developers large and small, local and national. I'm not a huge believer in big boxes/nat'l retailers as neighborhood saviors, but I've watched the positive change with my own eyes. Pittburgh as a city continues to decline, but East Liberty is thriving.

What I've seen is that the barriers to ED are so high that it's relatively rarely abused, whereas Tax Increment Financing (TIF) is abused constantly, because no one is a specific "victim" (instead all taxpayers are). It's with TIFs where you see wooded hillsdies declared blighted so that they can be bulldozed and malled, exclusively to the benefit of one developer.

All that said, I would not object if Dems made principled opposition to ED abuse a tenet of their reform agenda, just as I'd love to see a moratorium on more direct subsidies for business retention or recruitment.

[Dave Adams]

If you're looking for good (bad) examples of this, Kansas City has in a couple of urban neighborhoods used eminent domain or the threat thereof to acquire large tracts of "blighted" land on which to build suburban-style shopping centers. "Midtown Marketplace" is on about 20 or more former blocks of run-down urban apartments and townhouses along Main Street. One of the city councilmen had the idea to turn it into a shopping center. They got the land but it took years to find the tenants, so it sat vacant for quite a long time. They did finally rope Home Depot and Costco into it. So now they have several acres of parking and two huge big boxes right in the middle of the city. It makes me want to cry.

[Michael Meckler]

I would have to agree more with Tim Hulsey than with JRoth over how urban Democrats view ED.

Real-estate development -- especially renewal of "blighted" neighborhoods -- has become a major economic force in most urban areas. In America's increasingly polarized politics (urban areas under Democratic control; suburban and rural under Republican control), the Democrats who run the big cities look to developers both altruistically (as agents of change who can increase a city's population, tax base and property values) and opportunistically (as deep pockets who can finance political ambitions at the county and state level). Urban developers also tend to be sympathetic to some progressive social issues (gay rights, support for immigration) as well as being major benefactors of local arts, social-service and charitable organizations.

Of course, the opportunism works both ways. The developers need local Democrats to provide tax breaks and to ED land to allow their projects to move forward and make money. Knowing how the political game is played, real-estate developers have become major contributors to urban Democrats.

So the connections are often tight between developers on the one hand, and big-city Democratic mayors and city councilmembers on the other. Unless a particular urban development project gets enmeshed in racial politics (which can happen in gentrification), Democratic leaders are generally quick to support ED to see the project go forward.

I've written on this with regard to Columbus, Ohio, on my own blog, RED-STATE.COM.

[Jarrett]

This would be a good moment for everyone to review the chapter on property taxes in Kunstler's Home from Nowhere. Taxing land rather than buildings -- as Kunstler recommends -- would make it much more painful to keep highly developable inner-city land off the market, thereby encouraging voluntary sale without pushing civil rights buttons.

[Laurence Aurbach]

David, your replies make sense and I agree that liens and foreclosures are in theory better ways to handle vacant and nuisance properties. However, effective implementation of that system can require large, difficult reforms at the state and local levels. "The tax lien foreclosure process is often so lengthy, cumbersome, and filled with doubts and objections that local governments have largely ignored growing tax delinquencies, particularly in low income neighborhoods," says Professor Frank Alexander in "Renewing Public Assets for Community Development." Added to this is the problem that many cities can't even keep track of which properties are delinquent, vacant, or nuisances. (See Vacant Land in Cities: An Urban Resource by Pagano and Bowman.)

So when urban neighborhoods are festering with entire blocks leveled into rubble, and crime is rampant in the decaying buildings that still remain, it's easy to understand why cities will resort to eminent domain to improve the quality of life for citizens. It can be the only way to get something accomplished in a reasonable time frame. That doesn't necessarily mean it's the right tool to use, and tax lien foreclosure reform should be a priority.

Also, if holdouts are preventing Wal-Mart or Home Depot from moving in, they should figure a way to work around them. Examples of Manhattan skyscrapers built around single houses are famous -- viva la holdout architecture!

[David Sucher]

Thanks, Laurence.

I will take a look at those article.
But in the meantime, I just wonder how a government which cannot keep track of which properties are "delinquent, vacant, or nuisances" is then able to determine which properties should be declared blighted and then condemned. There seems to me to be a basic conflict.

A government so lacking in competence should not be entrusted with the power to take people's property, even with compensation.

[Michael Meckler]

I didn't mention this specific example in my earlier post, but here in Columbus one developer wants a Habitat for Humanity home to be designated as "blighted" to have it ED'd for economic development.

[Nick Helmholdt]

The poletown case in Detroit is the premier example of ED being used for a private benefit. It it currently going back through the courts. Here is the Detroit News summary of the problem,

"In 1981, General Motors and the cities of Detroit and Hamtramck collaborated in a grand plan to bring industry back to what was perceived as a dying city, to add to the two cities' tax coffers and to keep the automotive business centered in Detroit.

In the process, the city lost a neighborhood, the Catholic Archdiocese lost the faith of some of their flock and 4,200 people lost their homes. "

http://info.detnews.com/history/story/index.cfm?id=18&category=business

Here are two links about the legal battles over poletown.

http://www.freep.com/news/mich/land31_20040731.htm
http://www.law.berkeley.edu/faculty/rubinfeldd/LS145/poletown.html

[Alan Sullivan]

If it enlarges the tax base, politicians like it, no matter what their party label. And that 'corporate-Republicans' cheap-shot is shameful, David. You really have let the election go to your head. I suspect any honest accounting of partisan affiliation among property developers would find a high proportion of Democrats. Abuse of eminent domain is not a partisan issue in the usual sense; it's a libertarian vs. statist issue.

[David Sucher]

Anyone who sincerely believes that an "honest accounting of partisan affiliation among property developers would find a high proportion of Democrats" probably knows very few property developers.

Sure there are some. But the term "high proportion" makes it sound like a majority and that strikes me as unlikely, at best. In fact, the notion is silly.

Further, if these Democratic developers, so powerful in their own business, truly exist, then they become curiously ineffective in controlling their own builder, real estate and construction political lobbying groups which are almost entitely very conservative.

•••

As to "...that 'corporate-Republicans' cheap-shot is shameful..." you can accuse me of using cliches -- I dislike such predictable language -- but not inaccuracy.

And you, of all people, Alan, with your outrageous vile BS about Kerry...it's humorous, preposterous that you would have the nerve to chide me about "partisanship." Let's just be clear, the Republicans in the White House are responsible for a serious, royal screw-up and until they act like aduilts and fess-up to having made a mistake, they get no respect here (as a group.) Even now Condi Rice is in denial and keeps shifting her story.

You can call it partisanship; I call it patriotism.

[a_retrogrouch]

Sounds to me, from all the kvetching above, like more confusion between causation and correlation. Does the occasional bad ED decision/action mean that ED is inherently bad/evil/pick your euphemism? Puh-leeze. I work for local government in a progressive southern city. (Yes, Virginia, there are such creatues.) Guv'mnt does ED all the time for road and utility projects, and the taxpayers bleed badly for it. In Florida, the guv'mnt has to pay fair market value and for everybody's attorney. I know a local attorney who has gotten quite wealthy from bleeding guv'mnt, and I would hardly call him the communitarian type. Nevertheless, guv'mnt continues to use ED, and I would argue that they do so responsibly for the most part, at least here. But we don't do it for economic development. We (the City) is relatively affluent, and the City purchases land (mostly brownfields, or strangely-shaped small lots, or in truly blighted areas) from willing sellers to reassemble and sell to developers. The land would otherwise just sit there, as it has in many marginable areas for decades. Most developers prefer to develop raw land, rather than take a chance on vacant, previously developed properties. You may argue that's pure capitalism, but it's often poor public policy. It's a trade-off between the market and the public good, and the pendulum swings back and forth. That's life. ED has its place, and so does the private market. When they work together, it can revitalize truly blighted areas.

[David]

For a practical case of eminent domain, or compulsory purchase, as it is called in the UK, I can answer any question about it that anyone is likely to ask, and far more than most people might contemplate. It is for practical purposes, a conspiracy to defraud, sponsored by the State.

[richard]

Much of this land may be delinquent on its property taxes or off the tax rolls altogether. In many cases, it is difficult if not impossible to even figure out who owns the land.
http://www.Johnbeck.tv/john-beck.html