For release Tuesday, June 28, 2005
Private Property At The Mercy of Government
When, if ever, does government have the power to take the
property of A and turn it over to B? According to a June 23 ruling
by the U.S. Supreme Court (Kelo vs City of New London),
government can do that whenever it thinks that B will pay more
Six years ago the New London CT city council conceived a plan
for urban revitalization and tax base enhancement. Through its
nonprofit development agency, it would buy or if necessary condemn
90 acres called Fort Trumbull, adjacent to the Pfizer pharmaceutical
complex. After setting aside 18 acres for parkland, it would
sell off the remainder to a private developer. The developer
would develop the remaining acreage according to a city-approved
master plan including a hotel, a conference center, restaurants,
and upscale retailing. The city would benefit from the jobs created
and also rake in a ton of property tax dollars.
Fifty-eight of those acres are owned by 115 small landowners.
Some of them have lived there all their lives, in modest and
well-maintained homes. They went to court to defend their homes
and neighborhood against the grand schemes of the city government
and its developer friends.
The Fifth Amendment of the U.S. Constitution says "nor
shall private property be taken for public use, without just
compensation." To the framers of the Bill of Rights, "public
use" meant highways, lighthouses, navy yards, arsenals,
and customs houses owned by the public, or canals, ferries, and
railroads serving as common carriers for the public. But private
property may not be taken by eminent domain - regardless of just
compensation - if the government simply turns it over to the
private use of a different owner.
The Supreme Court began to chip away at this protection in
1954. It upheld a District of Columbia slum clearance and redevelopment
program on the grounds that the area was unquestionably "blighted"
and harmful to public health and safety. (Such programs were
denounced by civil rights groups of the day as "Negro removal".)
In the Kelo case, the Court, on a 5-4 vote, ruled against
Susette Kelo and the other homeowners. The Court replaced the
constitutional requirement of "public use" with "public
purpose." As Justice O'Connor observed, dissenting, "Under
the banner of economic development, all private property is now
vulnerable to being taken and transferred to another private
owner, so long as it might be upgraded - i.e., given to an owner
who will use it in a way that the legislature deems more beneficial
to the public
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 Kelo holding is a victory for tax-hungry governments, planning
departments, and ambitious developers. It is a defeat for ordinary
citizens who, until now, believed that the Bill of Rights protected
their right to property ownership again governments eager to
dispossess them in favor of other private citizens.
As Justice Thomas pungently observed in his dissent, "Extending
the concept of public purpose to encompass any economically beneficial
goal guarantees that these losses will fall disproportionately
on poor communities. Those communities are not only systematically
less likely to put their lands to the highest and best use, but
are also the least politically powerful."
The Kelo case thus poses a dilemma for liberals. Liberals
love government action to make sure that all development is done
according to The Great Plan. On the other hand, liberals see
themselves as principled advocates for justice for the poor,
the little guy, disadvantaged minorities, Joe Sixpack - precisely
the people who will be forced out of their property as governments,
hand in hand with "the rich and the big corporations",
take advantage of the green light newly given them by the Supreme
Eight states expressly prohibit the use of eminent domain
for economic development unless the area is clearly blighted.
Vermont is not one of them. Vermont's constitution makes private
property "subservient to public uses, when necessity requires
it." To date, Vermont cities have rarely if ever sought
to use eminent domain to confiscate property from A and turn
it over to B, as in the New London case.
Now a U.S. Supreme Court majority has defined away the prohibition
against takings for revenue enhancing purposes. The Vermont Supreme
Court has shown itself willing to uphold almost any regulatory
taking of land values. Given these unpleasant facts, property
owning Vermonters should start thinking about adopting a constitutional
amendment to protect their rights. Their 18th century
constitutions are on their side, but their supreme courts, in
thrall to the "diverse and always evolving needs of society",
are clearly not.
John McClaughry is President of the Ethan Allen Institute