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Founded 1994


EMINENT DOMAIN REFORM NEEDED AFTER KELO V. NEW LONDON

Testimony before the New York State Senate
Committee on Commerce, Economic Development and Small Business
Senate Committee on Local Government

By Carol W. LaGrasse
President
Property Rights Foundation of America

Legislative Office Building, Albany, N.Y.
October 18, 2005

Thank you, Senators, for the privilege of testifying on the subject of the need for eminent domain reform after the recent U.S. Supreme Court ruling in Susette Kelo v. the City of New London.

My name is Carol W. LaGrasse, and I am the president of the Property Rights Foundation of America, a non-profit, educational organization dedicated to promoting private property rights to the fullest extent guaranteed in the United States Constitution and to the preservation of the American tradition of private property ownership. I am a retired civil engineer. The Property Rights Foundation of America, which is primarily a voluntary organization, is based in the town of Stony Creek in Warren County, New York, and has active participants in every state of the Union, about half of them residents of New York. Our emphasis since our founding in 1994 has been both on rural and urban property rights issues, among them eminent domain.

The Property Rights Foundation of America submitted a "friend of the court" (or amicus curiae) brief in support of the petition of Susette Kelo to be heard by the Supreme Court. When the Supreme Court accepted the case, we again submitted a friend of the court brief. At this stage, a wide variety of groups submitted briefs in favor of the landowners, including, for instance, the National Association for the Advancement of Colored People (NAACP), AARP, Southern Christian Leadership Conference, Congress of Racial Equality (CORE), the urban architectural commentator Jane Jacobs, the great property rights scholar at Chicago University School of Law Richard Epstein, the American Farm Bureau, and many other noteworthy and large membership organizations.

The Supreme Court's ruling was devastating. It is the worst ruling related to private property rights in my adult lifetime. To put it briefly, the high court held that, as long as government has a plan in place for economic improvement, such as new jobs and increased tax revenue, it is perfectly legal for the government to condemn the property of one private party to transfer it to another private party. The court said that it would not interfere with the judgment of the government agency in its choice of where to condemn private property for economic development. The court also made it clear beyond any doubt that the words "public purpose," used by governments to condemn neighborhoods for economic development and the words "public use," which appear in the Fifth Amendment to the U.S. Constitution, are interchangeable.

Justice O'Connor stated for the minority in her scathing dissent:

"Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms."

It is our position that the Supreme Court greatly overstepped the bounds of constitutional law when it ruled in favor of New London. For more than two centuries, the Supreme Court always condemned the taking of property from one private party for the benefit of another private party. These cases describe the transfer of private property from A to B for the latter's private benefit as both unjust and unconstitutional. By contrast, the Supreme Court's ruling in Kelo v. New London will facilitate any condemnation to transfer property from one party to another as long as it contemplated new construction. No one's home or neighborhood will be safe from the big plans of government and a wealthy developer.

In certain respects, such as privacy law, the State of New York affords more protection for the individual than the U.S. Supreme Court. Our State should also provide better protection for individuals against rampant eminent domain than the Supreme Court has afforded.

Legislation should strictly prohibit government at every level from using eminent domain to transfer property from one private party to another for the purpose of economic development.

This would eliminate the use of the threat of eminent domain as a cudgel to force property owners to accept offers from developers. This is what government officials refer to as "a tool of last resort." Disputes related to proposals for urban construction like the Ratner project in downtown Brooklyn would be on a relatively even footing, rather than the situation where the neighborhood residents face not only the money and power inherent to a big developer, but also the coercive hand of government.

It is perfectly possible to prosper, and, for centuries, this country developed and prospered without eminent domain being used to transfer property from one party to another private party. New York City became the greatest city in America even though holdouts forced major buildings to have a corner cut out of them or some other peculiar compromise with a property owner. The market determined progress, not the unrestrained iron hand of government.

I'd like to thank the Senate for last year's successful enactment of eminent domain reform so that property owners now receive officially mailed notification in time to participate in the full eminent domain process.

Further reforms would help to assure just treatment of property owners and also help to afford more stability to them as well as tenants. The government should be dedicated to assuring stability to families, rather than disrupting their lives and neighborhoods.

Dr. Mindy Fullilove of Columbia University and New York State Psychiatric Institute wrote in her book Root Shock - How Tearing Up City Neighborhoods Hurts America and What We Can Do About It (Ballantine Books 2004) about the impact of the wave of urban renewal during the 1950's and 1960's on thousands of neighborhoods and the long-term negative consequences for African American people. At our Eighth Annual National Conference on Private Property Rights last October in Albany, she said, "African Americans called this urban renewal Negro removal."

Eminent domain has been a tool to effectively eradicate neighborhoods and culture. Today, a second wave of eminent domain is eradicating neighborhoods and culture. Blacks and whites are united in opposition to eminent domain for private gain. Just because someone has more money should not give that person the power to destroy one person's house to build a bigger house, to level one group's beloved neighborhood and build a ritzier one, in spite of what the Supreme Court ruled.

So any number of reforms that weaken the strong arm of government to destroy established neighborhoods in favor of economic development are desirable.

However, elaborate review processes that are designed to facillitate individual participation and protect the rights of the small property owner can be quickly skewed to favor the government and developer working in cahoots. Delays are good for the property owners, but rules of participation can be hopelessly arcane.

For instance, the current rules related to eminent domain, beginning with the hearing, floor property owners. Simplified rules, and simple rule books, like the State's guide to challenging your real estate tax assessment or the U.S. DOT's guide to protections for the property owners during the eminent domain process, should be made available.

In addition, terms that are intentionally inserted into urban redevelopment so as to benefit the neighborhood can quickly be distorted to become tools of the developer working hand in glove with government to roll over the neighborhood with the eminent domain.

For instance, in Greenpoint, an old-fashioned area in Brooklyn bordering the East River near the Queens border, the river front is being condemned for development for high rise apartments and a park. The character of old Greenpoint, an area of viable, established neighborhoods, will be greatly altered as a result of the wall of the high rises and park along the river. The change will be accomplished by force to benefit a private developer. The objections of local people were circumvented by promising affordable housing. This deal eliminated some vociferous opponents and left the remaining opponents weakened in their bargaining power. As a result, a civil war naval museum focused on the battleship Monitor that was planned on donated property, supported by private donations and a grant from the New York State Legislature, is being stopped in its tracks.

Or, using the example of the Ratner development in and around the Atlantic Avenue railroad yards in downtown Brooklyn, the community benefit funding required of the developer is being funneled to an organization that is a parrot for the developer, according to opponents, as reported on October 6 in the Brooklyn Heights Press. The pro-Ratner organization Brooklyn United for Innovative Local Development, or BUILD, was exposed as a result of a Freedom of Information Law request to have reported on its IRS application that it will receive $5 million from Forest City Ratner. A genuine neighborhood group, Develop Don't Destroy, which opposes the development, did the Freedom of Information request and publicized the deception.

It is not unusual for a wealthy entity that has to pass through an elaborate environmental review process to create a phony citizen's group to advocate for its funder against the real representatives of the grassroots citizens.

Legislation that restores constitutional rights, that facilitates the protection for constitutional rights, or establishes a clear, efficient route for the property owner to defend himself or herself from eminent domain is what is needed.

The State of Utah has the only State Property Rights Ombudsman in the world. This advocate for the property owner helps to level the playing field when the individual is faced with eminent domain or state land use regulations affecting the use of private property. With an advocate available, the property owner can be afforded the rights established in the law that he might otherwise be ignorant of. In addition, government appraisals are made fully available for review and the property owner can choose an appraiser to dispute the price offered for the property. The U.S. Senate is now considering a bill to enact a federal property rights ombudsman. This sort of legislation would help property owners in New York State.

An eminent domain ombudsman or general property rights ombudsman would help individuals secure their rights not only when faced with the terrible destruction of neighborhoods under the current onslaught of urban redevelopment, but would be helpful in old-fashioned, constitutional eminent domain for a genuine public use, such as parks or highways.

Such an example came to my attention a couple of days ago via an e-mailed plea for help from a farmer who had experienced eminent domain for a public nature trail through the farm. The farmer was promised that the trail would be fenced, but the fence was never built and now the farmer faces the worry of liability if one of the farm horses injures anyone using the trail. But it is too late to effectively bargain for the fence and there was no contract between the parties to build it. An ombudsman would have assured that the property owner would have things in writing. There are countless examples of this nature, where the property owner needs help to get the government to abide by its own rules and agreements.

Property owners facing eminent domain need an advocate who is independent and effective, someone modeled after Robert Freeman's office at the Committee on Open Government, but who has negotiating power.

There are countless examples of injustices and machinations that take away the security of people and actively facillitate the destruction of communities and neighborhoods when that great landmark and protection of civil rights, the U.S. Constitution, is tossed aside by legal structures at the local, state, and federal level, including the U.S. Supreme Court. Today, I'd like to urge that the Senate take action to provide advocacy for the property owner and to smooth the process wherever possible so that property owners can have the full benefit of the protections afforded them under the law. But, first and foremost, the State should restore the constitutional rights of citizens of the State of New York, to narrow the power of government to use eminent domain.

Thank you for the opportunity to testify today.

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