Myths and Reality of Eminent Domain

JURIST Guest Columnist Audrey McFarlane of the University of Baltimore School of Law says that concern over the protection of "property rights" in the wake of the US Supreme Court ruling in Kelo v. New London has obscured larger questions relating to the allocation of public resources to large private enterprises, lack of public accountability in economic development decision-making, and land access and land tenure rights for low and moderate income people...



As one who labors in the relative popular obscurity of studying redevelopment and invisible economic development decision-making processes, I've been secretly pleased to see the Kelo v. New London ruling on eminent domain catapult into the headlines some very important development issues. Because most coverage of the ruling has been framed in terms of "property rights", the threat to house and home featured in the headlines of every major newspaper and on the nightly news captured popular fears and anxieties about the impact of unchecked power of public-private partnerships on the lives of ordinary individuals who own or aspire to own real property. Nevertheless, the "property rights" approach hides the reality: the real questions presented in Kelo relate to pressing issues of allocation of public resources towards large private enterprises, lack of public accountability in economic development decision-making as well as land access and land tenure rights for low and moderate income people.

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The popular outrage over the Supreme Court's decision is fueled by common sense impressions that cities are beholden to big corporations and developers and are engaged in naked land grabs to redevelop property to more lucrative tax receivable luxury-related land uses like condos, upscale retail and entertainment complexes. Most believe that the government should never be able to take one's home. Others try to be more even handed and assert that eminent domain should not be used for economic development but rather only for public infrastructure or for "blighted" properties. In light of the history of the difficulty of determining exactly what blight is (one person's blight is another person's community) the easiness of accepting blight elimination as a basis for the exercise of eminent domain is in effect a way of saying take someone else's properties, not mine. Therefore, we are still faced with a need to answer fundamental questions about states' and cities' discretion to use land to effectuate social and economic policy choices. Is revitalizing to ensure jobs and economic vitality really that much different than revitalizing, removing slums and building something new? Does living in a blighted neighborhood mean one's property is any less personally less important to certain property owners who call that blighted place home?

The dispute over the use of eminent domain for redevelopment is particularly hard to resolve for a number of reasons. First, the controversy focuses on the practice of taking the property and transferring it to developers, other private persons to put the property to another use consistent with the town's revitalization plans. It seems a violation of all principles of property ownership to allow government to terminate one property rights for benefit of another. Yet, would having government run reconstruction projects result in a better outcome? Second, what bright line limits can or should be read into the public use clause to limit government overreaching in the name of economic development and protect property owners. It's clear in everyone's minds and hearts but putting pen to paper and coming up with principled rules with broad application over a variety of circumstances and situations has proven elusive. Third, is the possibly the most compelling property rights and personhood aspect of the eminent domain debate is the reality that possibly no justification can erase the impact of losing one's home along with its often deep associated sense of personal autonomy, history, and community.

The Supreme Court was faced with a difficult decision and came up with an imperfect yet justifiable approach to the challenge. Although those well-versed in the law understand that the decision reaffirmed a 50+ year old federal constitutional standard of deferential view of the public purposes behind an exercise of eminent domain, the headlines and public reaction reflect a popular understanding that the Supreme Court expanded governmental powers to take properties even though Berman v. Parker (1954) did not stand only for blight removal. Both Berman and Kelo stand for the proposition that, the exercise of eminent domain for redevelopment or revitalization was generally a legitimate public use because it fulfilled a public purpose, synonymous with an exercise of the police power. The Court refused to second guess a State's exercise of the police power and engage in a substantive due process-like review of the public purpose justifications of the validity, necessity, reasonable certainty or means end match of the economic development justifications behind the exercise of eminent domain. Instead, the Court decided to take a hands off approach as a matter of federal constitutional law so long as the exercise of eminent domain was made pursuant to a "carefully considered revitalization plan"

Why such a hands off approach? Not only was the Court horrified at the prospect of entering into the thicket of line drawing without any coherent or principled way to ensure principled consistency for the myriad of varying factual situations supporting or contradicting a city's justifications for engaging in economic development activities, the Court was also influenced by the economic justifications inherent in economic development. Deciding that there was a fundamentally accepted tradition of states working to protect and promote industry and economy within a State, who was the Supreme Court to intervene in this hallowed process.

The decision's emphasis on the carefully considered revitalization plan raises two questions about how those plans are put together and whether they really do reflect a plan that adequately takes into account all important or relevant dimensions of the public interest. First, reliance on the plans raises fundamental questions about the relationships between cities, business corporations and real estate developers. Much of redevelopment takes place through some form of public-private partnership. Cities, that are fixed in place geographically, work very closely with businesses that are mobile to do whatever it takes to make sure they provide a business friendly environment or face losing that business to another jurisdiction. They also work closely with real estate developers to facilitate development projects through subsidy, regulatory waivers and the use of eminent domain. Therefore, the plan may only be a statement of a skewed conclusion about what's best for the public interest, influenced quite heavily by private entities and interests rather than the city acting independently. The interests and efforts on behalf of the public good and private benefit are intertwined such that private probably does overly influence what we determine to be the public good while ignoring other values of what may also be in the public interest, like economic residential variety, unplanned organic community and local flavor.

Second, the Supreme Court strongly suggested that it was up to the States to decide what additional limits, if any, should be place on the exercise of eminent domain and there have been a flurry of bills that seek to limit the public uses for which eminent domain can be used. This will be a difficult issue for States to address because it will require them to balance popular sentiment against the possibility of restrictions that could hamper economic development efforts. Perhaps the most significant bills to watch will be the ones that focus on the revitalization plans and make the planning process more open, publicly accountable and inclusive. This could serve as the most viable way to naturally limit the exercise of eminent domain by requiring consensus or buy-in, in advance, by a variety of ordinary people. Such participation and its inevitable slowing of the process if not threatening to alter the course of redevelopment plans is likely to be anathema to cities that are anxious to meet the needs of business. On the other hand, more citizen participation will do cities and States the ironic favor of forcing them to limit the role of big business in a way they are now relatively powerless to do.



Audrey McFarlane is an Associate Professor at the University of Baltimore Law School.
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