Property Rights Foundation of America®
Founded 1994


The Exercise of Eminent Domain in New York State
By Carol W. LaGrasse
President
Property Rights Foundation of America

Testimony before
Assembly Committee on Judiciary,
Assembly Committee on Corporations, Authorities and Commissions
Assembly Committee on Local Governments
Assembly Committee on Governmental Operations

Legislative Office Building, Albany, N.Y.
November 1, 2005

Thank you, Members of the Assembly, for the privilege of testifying before you today on eminent domain.

My name is Carol W. LaGrasse, and I am the president of the Property Rights Foundation of America, a non-profit, educational, nationwide 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, with about half of our participants in New York. We submitted a "friend of the court" (or amicus curiae) brief on the side of Susette Kelo to the U.S. Supreme Curt in Kelo v. New London at the petition for certiorari stage and again for the final arguments.

The Kelo v. New London decision on June 23 placed no practical restrictions on government's use of eminent domain to take property from one private owner to transfer it to another party for the purpose of economic development. The ruling was a profound defeat for private property rights. By denying constitutional protection for private property owners, the ruling greatly diminished the security of the homeowner, small business owner, and people residing in ordinary neighborhoods across the country. Suddenly, people were socked with the awareness that they could lose their home, business, and their entire neighborhood at the whim of government working in tandem with big business.

Justice Sandra Day O'Connor, who wrote the dissenting opinion, has been widely quoted, but, to make the theme of this testimony crystal clear, let me quote her again:

"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."

She wrote:

"To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings 'for public use' is to wash out any distinction between private and public use of property—and thereby effectively to delete the words 'for public use' from the Takings Clause of the Fifth Amendment."

The Need for Fundamental Reform

How can New Yorkers be protected in their homes, businesses and neighborhoods in the face of this decision?

Those who side with government maintain that New York eminent domain law provides adequate protection for citizens. On the contrary, Dana Berliner, Senior Counsel at the Institute for Justice, which defended the New London citizens, completed a five-year study of eminent domain for private economic development across the country, and found 10,000 such instances. At our annual conference in October 2003, she reported that, using only news reports, she found fourteen major projects in New York where condemnations were being done for private parties. She said, "The courts in New York are utterly deferential about eminent domain. They will sanction anything."

She cited two well-known instances involving the Empire State Development Corporation in New York City, including that of the New York Stock Exchange, where apartment buildings and businesses were condemned to entice the Stock Exchange to stay in New York, rather than moving to New Jersey. However, the Stock Exchange did not move from its existing location, and the owners of the condemned buildings had to be compensated anyway. The other case she cited, which is even more familiar, was the condemnation of a number of businesses for the New York Times, which was upheld by the New York State Court of Appeals. So, New York is in the same situation that is defined by the ruling in Kelo. What Kelo accomplished here was make New Yorkers aware of how insecure they are.

Ms. Berliner also maintained the point that eminent domain often leaves the area unused, after the government condemns the property for private development. She pointed out a church condemned in North Hempstead for private business development, with nothing at all on the vacant property five years later.

Ms. Berliner pointed out that New York is worst in the nation in abusing eminent domain in a number of ways. Thanks to the leadership in the New York State Legislature, one of these abuses of property owners was eliminated last year. Today, New York property owners receive personal notice of eminent domain.

The Solution

One proposal to protect citizens from eminent domain for private development is to tighten the statutory definition of blight.

At some point, it is thought, on the continuum between real, generally recognized blight and well-maintained neighborhoods, a series of criteria can be set out that will make it crystal clear that one property can be condemned and that another property cannot be condemned.

This is a topic close to my heart as a civil engineer because one proposed criteria for a definition of blight is a set number of building code violations. Under such a rule, if there are too many violations on the structure, it would be deemed blighted.

A few years ago an organization in Rochester made up of owners of small rental properties discovered how the accumulation of building code violations can be deliberately brought about by a municipality. The City police would perform a raid on a property occupied by poor or minority tenants. After the officers entered the property, they would tear out the electrical fixtures from the walls and do other damage, such as break the windows. Then the building inspector would enter the property and issue a series of violations. The property would be condemned as unfit for habitation.

But this example is just more colorful than the commonplace abuse of the building inspection process. It is child's play for an inspector to find countless violations on an ordinary house. The building inspection is often used arbitrarily in New York, whether to collect bribes, to settle grudges, or to pressure landlords to abandon properties.

So, first you have the corruption that would likely ensue as a result of the ability to declare blight to facilitate condemnation of private property for redevelopment if statutory criteria for the number of citations for building code violations were met. And secondly, the imposition of such criteria is inherently arbitrary, considering that almost any house that is not recently built cannot meet the letter of the multitude of current code requirements.

This is the trap that will snap if the idea is accepted that objective numerical building code violation criteria can be set to determine blight. It is beyond the scope of this testimony to discuss all possible blight criteria, but all have their pitfalls. In my opinion, it is impossible to define blight in a way to assure just treatment of property owners in the context of eminent domain.

Basically, when blight is purportedly used as the criteria for eminent domain, the real criteria is that the property is underused in the eyes of those who would like to condemn it for economic development. It is not possible to fairly define the type of property to be condemned.

This conundrum leads to the conclusion that the opposite tack must be used as criteria for eminent domain, namely, the criteria for the ultimate disposition of the property to be condemned.

The only means to protect the security of the homeowner, small businessperson and community is to restore the classical definition of public use. Highways and bridges, railroads and airports, schools and hospitals, parks, city halls, and the like, are public uses sanctioned historically from the first days of American jurisprudence.

We are back to the "public use" standard, as the State Grange voted in its annual convention in Auburn, N.Y. a week ago. Property should be condemned only for public use.

We should return to the original and consistent meaning of the Takings Clause, as cited by Justice O'Connor. She wrote:

"[A] law that takes property from A, and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with SUCH powers, and there, it cannot be presumed that they have done." (Calder b. Bull, 3 Dall. 386, 388 (1798). (emphasis added by O'Connor's citation)

The one basic reform that the State Legislature should urgently enact is to prohibit the condemnation of private property for the purpose of transferring it to another private party, with the exception of utilities and transportation systems, which are clearly, historically public uses.

As would be expected, if the clear meaning of the Constitution is respected, the security of the citizens in their homes, businesses and neighborhoods will be protected.

Is this too "radical"? No. This is exactly what the people of this state are clamoring for since the Supreme Court's wrongful ruling.

This solution was consistent law until the era of urban so-called slum clearance during the 1950's, which destroyed thousands of mostly Black neighborhoods and greatly hurt Black families and culture, to force them into cold, mass-produced projects. Dr. Mindy Fullilove's book Root Shock—How Tearing Up City Neighborhoods Hurts America and What We Can Do About It (Ballantine Books, 2004) describes the dire consequences of destroying Black neighborhoods across the country. At our conference last year, Dr. Fullilove said that Blacks believed that urban renewal is Negro removal.

And what happened to many of those projects? Many have recently been demolished as crime-ridden and impossible to sustain.

Today, it is the duty of the Legislature to stop another wave of neighborhood demolition and all the family insecurity and cultural destruction that will accrue.

Reforms to Improve the Fairness of the Eminent Domain Procedure

However well the citizens are fundamentally protected from arbitrary eminent domain for economic development, a number of other reforms would help level the playing field without disrupting the legitimate functions of government.

It is important for the Legislature to move quickly on lesser, but significant, reforms even if a majority consensus is not immediately reached to give full protection to the citizens of this state from eminent domain for private gain.

The State of Utah has an official Property Rights Ombudsman, the only such office in the world. When contacted by the property owner, the ombudsman advocates on behalf of the owner during disputes over situations such as eminent domain. Senator Orrin Hatch held a press conference two weeks ago to introduce legislation to create a federal property rights ombudsman to help people faced with eminent domain. In addition to helping property owners deal with government agencies, the Utah ombudsman has saved the State money. Last week at our annual property rights conference here in Albany, Craig Call, the Utah ombudsman, reported that during the eight years that the office has been in place, expenditures for litigation during eminent domain have been significantly reduced. The ombudsman reduces litigation by seeing that the full rights to which the property owner is entitled are accorded him from the beginning.

Scott Bullock, who argued the Kelo case in the Supreme Court for the Institute for Justice, placed a letter to the editor last week in the Hartford paper stating that the property rights ombudsman proposal was a ploy, to get attention away from fundamental reform. I do not agree with this position. On the contrary, it is my opinion that a number of lesser, important reforms will go a long way to restore fairness to property owners.

In fact, I think that it is essential at this juncture to pass legislation that deals with the extreme eminent domain insecurity that currently exists. Stumbling blocks must be placed in the way of municipalities that are tied in with private developers with the goal of demolishing downtown neighborhoods to raise more taxes or to change the landscape to one that is of a higher class. So proposals to increase compensation to above appraised value; to compensate homeowners, businesses, and tenants for relocation costs; to slow down the process; to add evaluation criteria before eminent domain can be contemplated would be worthwhile steps.

Agencies at every level, from the State on down to the local towns, should make available for the property owner easily understandable publications about eminent domain, as the State Office of Real Property Services has published for property owners to challenge local assessments. The steps of eminent domain and how to challenge it, the purpose of the public hearing, and the like, can be reduced to clear language so the citizen is not befuddled with the specter of eminent domain. It is bad enough dealing with eminent domain when a person knows the facts, but impossible when information is posed so obtusely, available only in law books, that the ordinary citizen cannot understand what's happening. Furthermore, when federal funds are involved, an exhaustive guide for the citizen is published, but state and local agencies do not make the guide available.

The Utah Property Rights Ombudsman began publishing a citizen's guide to eminent domain this year, which is reminiscent of New York's guide to challenging your assessment.

In addition, the use of all State funds for eminent domain for urban redevelopment should be eliminated, so that local municipalities fully bear the cost of destroying neighborhoods out of their local budget. After all, if the redevelopment will bring such economic improvement, shouldn't the local municipality be willing to do the investment?

In addition, except for classical purposes such as when the State DOT does condemnation for highways and the like, the use of eminent domain by non-elected government agencies and quasi-government agencies should be eliminated, thereby ending the eminent domain power of the Empire State Development Corporation and lesser authorities, which are largely outside citizen scrutiny and control.

Pitfalls to be avoided in eminent domain reform are provisions that can be easily co-opted by developers. For instance, sports writer Juan Gonzalez exposed the Ratner corporation on October 18 in the New York Daily News for bankrolling—to the tune of $5 million—a neighborhood organization that was portrayed publicly as a community benefit corporation, but was instead advocating for Ratner's huge Atlantic Yards commercial development in Brooklyn. This corruption demonstrates that requiring developers who will benefit from eminent domain, re-zoning, or whatever, to fund community groups is not such a good idea.

Whatever procedures for citizen involvement may be created by statute, it should be kept in mind that it is difficult for citizens to individually participate in once-in-a-lifetime governmental processes. An ombudsman advocate, available free of charge, would go a long way to level the playing field.

In addition, it is essential to keep the issue of eminent domain before the public and the Legislature. Statistics and information about the application of eminent domain for private development should be gathered. The creation of a commission to further study eminent domain would facilitate this focus and information gathering.

Closing

As long as government agencies have the power to impose eminent domain for private use, homeowners, small business owners, and neighborhoods will be insecure. The claim that eminent domain will only be used as a last resort, or rarely, is meaningless, because it is the threat of eminent domain that forces by far the majority of property owners to sell out. The only way to protect the little guy from the combined power of government and big business to take his property is to prohibit the government from exerting the power of eminent domain for private use.

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