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Eminent Domain Stuff

New London Update (2/24/06)
Coverage of the Rally at New London's City Hall (w/ pics)

Tuesday, July 05, 2005


Is Kelo Getting Overblown?

According to John Hinderaker (of Powerline) (via Michelle), it is. This piece is pretty dense, so I'm going to deal with just a few things.

First off, John uses the fact that the planned development of the Fort Trumble area involves a mix of the public and the private:

In reality, the New London economic development project is similar to efforts that hundreds of towns and cities have made to revitalize aging or depressed neighborhoods. Focused on a 90-acre area called Fort Trumble that is comprised of both publicly and privately owned land, the project includes a typical mix of public and private uses: a pedestrian "riverwalk," a waterfront hotel and conference center, marinas for recreational and commercial uses, a new Coast Guard Museum, new residences, and an industrial park to which the city hopes small biotechnology companies will be lured by Pfizer's nearby research facility.
So, the fact that (of the things John mentions) 3 of the 8 planned projects are going to be "public" makes this for the "public good"? I don't see how that fits. I think the "mixed" argument he's making here is a red herring. Either you think that eminent domain should be used for private development (and subsequent ownership) or you don't. If you believe that it should be used for private development, then any discussion of concomitant pubic-use projects is a diversion meant to distract the opposition from the basic fact that you are arguing for the seizure of private property for complete and total transfer to a private entity.

Next John cites reasoning apparently expressed by conservatives:

MANY CRITICS of the Kelo decision have said that it authorizes seizing the property of one person merely to give it to another. Apart from any misunderstanding of Pfizer's role, this can only be because, once the NLDC acquires title to the Fort Trumble property, it will be conveyed to a developer, Boston's Corcoran Jennison, to carry out the project. Some hostility to the Kelo decision seems to be based on the belief that Corcoran Jennison may profit from its work--an odd concern, one might have thought, to be expressed by conservatives.
I have not, personally, run across any such concerns voiced by conservatives. I have, myself, expressed outrage that a private company is going to profit from property seized under eminent domain. This could be taken to mean that I would be against a private company contracting with a city to develop property seized (rightly) under the takings clause of the 5th amendment (e.g., to construct a school). If that's how it was taken, then I apologize for being vague.

My problem with the current situation in New London is that private property is being transferred from one private individual to another against the former's will. That is wrong. Whether or not the developer or eventual owner makes an actual profit is totally beside the point and is dependent upon factors that would be similar whether the property was obtained via taking or by good old buying (although it would be admittedly easier to make a profit if the company obtains the property under "just compensation" as defined by...whom, again?).

John goes on to address the issue I just discussed. Here's what he had to say:

But New London's use of a private developer highlights an important point: there is no doubt that the city (or the NLDC) could use its eminent domain power in support of the Fort Trumble project if it planned to retain ownership of the land and administer the project itself. If the project were publicly owned, no one could question that the associated condemnation proceedings would be in support of a "public use." But are the rights of Americans any less imperiled by condemnation in support of publicly-owned projects? And, as a matter of policy, if a city wants, for example, to create more housing, does it make any sense to force it to pursue the long-discredited practice of building public housing projects, rather than facilitating the use of private capital and private management to achieve the same end?
To answer the first question: YES!!! It certainly does place my rights in greater peril by transferring the taken property to a private company rather than keeping it 'public property.' While I will agree that private companies are more efficient than state-sponsored anything, that is not the point here. If the government wants to take my land, why make it 1) easy for them and 2) profitable for some (potentially crooked) developer? It's not fair and, what's more, it's unconstitutional.

Now, for the You're a bunch of greedy SOBs and, therefore have no rights argument.

Suppose a large company whose headquarters are located in an urban area needs more space--say, a whole city block. Lacking powers of eminent domain, it has only two choices. It can negotiate with each landowner on the block and try to buy all of the individual parcels. This, however, is often difficult or impossible; once it becomes known that the company is buying land for its corporate headquarters, any individual landowner can block the project by refusing to sell. Occasionally such "holdouts" are motivated by sentimental attachments, but usually they simply want to extort an unreasonable sum from the corporate buyer. (It is interesting that in her Kelo dissent, Justice O'Connor stressed that: "Petitioners are not hold-outs; they do not seek increased compensation. . . ." Yet the majority opinion notes that "[t]en of the parcels [at issue] are occupied by the owner or a family member; the other five are held as investment properties." If petitioners had won their case, the value of those investment properties would have skyrocketed.)
First off, let's consider the term "investment property". Without consulting a dictionary, I think it's safe to assume that one who buys property as an investment is betting that its value is going to increase. So, I buy some waterfront property (always a good investment) in New London. I pay $100,000 for a lot. Then some company wants to build a hotel on that property.

"Holy Crap!" I think to myself, "I just hit the jackpot! I'm going to ask $1 million! My investment property just paid off! Oh, wait. You mean you're just going to ask the government to take my property for a "fair" price? But...if it's going to be a "fair" price, why not just pay me what I'm asking for it? Oh...because that's not "fair"...and now you're going to take it and give me $100,000 so I don't "lose" anything? Interesting. I guess I should have just bought stocks."

You see, "fair" in a free market is whatever two independent parties agree to in the absence of coercion. The government can assess my property at whatever value they want for the purposes of taxes...but that is not that value of the property. They can say my property is worth $40 trillion, but it's really only worth with someone will pay me for it. So to say that a property owner is asking an "unreasonable" amount for (and labeling that action extortion, no less) is plainly absurd. If I ask $1 million for something you think is worth $100,000 and I decide not to sell, then there is no way to determine it's actual worth. On the other hand, if we negotiate and agree on $450,000, than that's what the property is actually worth. No more. No less.

Finally, the very idea that a "holdout" is put it "quotes" is offensive. How about this?

I think you're a "holdout" if you fail to agree (after "just compensation") to "give" your kidney to the President. You're a match, you've got two (and you only need one) and, after all, we can't afford to lose the President right now because ___ (fill in the blank with whatever you like).

So tell me, how far away is that little scenario (thanks to my dad for the kidney idea). "Crazy," you say? A few months ago I would have said that the government taking my land to give to some guy was "crazy."

We must fight now to retain our rights to our own legally-obtained property. If we lose this fundamental Right, then our remaining Rights will only be in more peril than they were before this crazy ruling.


Jeff also takes some shots nailing John to the wall.


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