The Court and the 'taking issue'

August 11, 2010

It's not often that a land-use case generates much public attention, but the Supreme Court's 5-4 ruling in Kelo v. City of New London has set off something of a firestorm around the country.

The June 23 ruling found that the Connecticut city was within its rights under the Fifth Amendment's eminent domain powers to condemn private property, even well-maintained middle-class homes, in order to turn the land over to private developers who wanted to build a hotel, office building, and a pedestrian walk along the Thames River. All this was done on the premise that doing so would prop up the city's declining tax base and further spur much-needed economic development in this old New England manufacturing town.

Only the most rabid libertarian would dispute the basic wisdom of eminent domain, which gives federal, state, and local government authority to "take" private property for public projects like highways and bridges, as long as the property owner receives "just compensation." Without eminent domain, government would be unable to provide basic public infrastructure; a single property owner could block construction of a sewer line or a hydroelectric dam.

In this case, however, the "public" nature of the project was in dispute from the start, and nine homeowners refused to give up their homes. Their chief argument was that the city's development plan was not designed to meet truly public uses, but rather to benefit private interests, notably Pfizer Corp. The pharmaceutical company had built a research laboratory in New London and wanted to construct an office building on the disputed land.

Writing for the majority, Justice John Paul Stevens found that "the city has carefully formulated a development plan that it believes will provide appreciable benefits to the community, including, but not limited to, new jobs and increased tax revenue."

Justice Sandra Day O'Connor, in her swan song before announcing her retirement, wrote in dissent that "the specter of condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory." The usually reticent Justice Clarence Thomas said the majority ruling would fall disproportionately on low-income families, particularly African Americans, whose homes were more likely to be in the way of "progress."

The Kelo decision certainly has in it the potential for abuse by real estate interests looking to snatch the power of eminent domain for their own ends, and equally by misguided public officials looking to fatten the tax rolls on the unproven premise that their development plan will benefit the community. Property owners in working-class neighborhoods and waterfront areas should feel especially vulnerable.

Is there any relief from Kelo's grasp? Yes. States can follow the example of Washington, whose constitution states, with a few minor exceptions, "Private property shall not be taken for private use." That could take years to accomplish, but it would restore the principle of eminent domain to its rightful place.


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