Magazine article The American Conservative

Eminent Complaint

Magazine article The American Conservative

Eminent Complaint

Article excerpt

BIG DEVELOPERS, retail stores and auto dealerships, bond merchants and city officials got exactly what they wanted last summer from the U.S. Supreme Court. In KeIo v. City of New London, the court ruled that local governments have the right to use eminent domain to take property from small-business owners and homeowners and give it to developers who promise tax and other benefits to cities that do their dirty work for them.

You could almost hear the sighs of relief emanating from the National League of Cities and the American Planning Association as Justice John Paul Stevens, writing for the majority, declared that the Connecticut city's plan to bulldoze a settled neighborhood of waterfront historic homes so that a developer could build condos, offices, a hotel, and upscale shopping "qualifies as a 'public use' within the meaning of the Takings Clause."

But while the "redevelopment community" certainly got what it wanted, it also got something it never expected: a strong public and legislative backlash against the abuse of property rights, increased understanding of what eminent domain and government-driven redevelopment means for communities, and the creation of a new nationwide property-rights movement that spans the political spectrum. As an Arizona Republic editorial put it, "Be careful what you wish for? They had no idea,"

While not much of substance has happened so far, in terms of tough new antieminent-domain legislation, a sea change has taken place in public opinion. A quiet little game has gone from the shadows, where lucrative deals are cut in closed city council session without controversy or debate, to the evening news, where the Little People openly question plans to bulldoze their neighborhoods to make way for subsidized new condos or auto malls.

Now, there's a backlash against the backlash.

"Developers Can't Imagine a World Without Eminent Domain," the New York Times proclaimed in a Jan. 18 headline. The Times article quotes developers who are reacting angrily to critics of KeIo. "Bank of America agreed to join the developer Douglas Durst in 2003 in building a 54-story tower in the heart of Midtown Manhattan, giving a psychological and economic lift to a city that was still reeling from the destruction of the World Trade Center," explained the news story. "Mr. Durst said he would not have been able to negotiate with Bank of America or other prospective tenants had the state not authorized him to use eminent domain."

You see, some property owners held out or kept raising the price. "Once we had that ability [to use eminent domain]," he told the Times, "we were able to quickly come to a resolution on the two properties and meet Bank of America's schedule."

No one doubts that eminent domain helps one party in particular transactions. The question, answered incorrectly by the nation's highest court, is whether in this supposedly free and constitutional society, it's acceptable for government to use its power to benefit one party over the other.

Unfortunately, so many "free market" businesses don't like to act in the free market. As soon as the market works against their interests, they turn to the government to get special favors. It reminds me of the situation with illegal immigration. You've heard about all those jobs Americans won't do. Is that really true, or is it more accurate to say that Americans won't do the jobs at the prices the companies want to pay? So the companies lobby the government to enact policies that flood the labor market, just as they use government's power of eminent domain to obtain other people's private property at prices they find more suitable.

The Times continues: "[A]round the country, developers and city officials say weakening or destroying the power to condemn property will seriously undermine efforts to rehabilitate decaying cities and might even hinder the rebuilding of New Orleans. ... Yet many developers and politicians have been loath to speak up, said Jeffrey Finkle, the president and chief executive of the International Economic Development Council, a professional group. …

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