Property Rights Foundation of America®


EMINENT DOMAIN

Testimony before the New York State Senate
Judiciary Committee

By Carol W. LaGrasse
President
Property Rights Foundation of America

Legislative Office Building, Albany, New York
April 3, 2006

Thank you, Senator DeFrancisco, for the privilege of testifying on the subject of eminent domain and about the legislation before the Senate Judiciary Committee.

My name is Carol LaGrasse, and I am the president of the Property Rights Foundation of America, a non-profit, grassroots educational organization dedicated to promoting private property rights as guaranteed in the United States and New York Constitutions and to the preservation of the American tradition of private property ownership. I am a licensed professional engineer, having practiced in the civil and environmental areas. The Property Rights Foundation of America is based in the town of Stony Creek in Warren County, with about half of our participants being residents of New York. Our emphasis has been both on rural and urban property rights issues. We submitted friend of the court briefs in the Kelo v. New London eminent domain case, where the U.S. Supreme Court wrongly ruled against private property rights ten months ago, and which ruling precipitated the legislation under discussion today.

It is heartening to note the legislation that is before the New York State Senate to restore the justice denied in Kelo v. New London, and the draft legislation to establish an Office of Eminent Domain Ombudsman and other protections in the context of eminent domain. My comments will combine broad overview with specific comment on each proposal, in the context of current events.

Looking back over history, the long slide to the present case law under Kelo was given a powerful downward acceleration with the 1954 Berman v. Parker decision, which authorized the taking of a blighted neighborhood in Washington, D.C., for urban redevelopment. During the 1950s and 60s, central city neighborhoods were destroyed and in their place government agencies built impersonal housing projects and also urban amenities that would be enjoyed by people from higher economic strata.

According to Dr. Mindy Fullilove, Professor of Clinical Psychiatry and Public Health at Columbia University, thousands of mostly black neighborhoods were destroyed during the slum clearances of the 1950s. In her book Root Shock, she documented how black families and culture were diminished during those waves of eminent domain. While addressing our annual property rights conference in 2004, Dr. Fullilove said that blacks believed that "urban renewal was Negro removal."

As you know, a new epidemic of eminent domain is demolishing village and city center neighborhoods today. Working class homeowners and family-owned businesses are seeing their families and businesses uprooted, often from homes of a lifetime or generations. During the five-year period ending in 2003, over 10,000 properties were being hit with gratuitous eminent domain to transfer property to other private parties for economic development, according to a study conducted by the Institute for Justice using newspaper reports as the only source. The human distress is heartrending.

Although Senate bill S. 5936 responds to Kelo, legislation such as this to restrict eminent domain for economic development to neighborhoods defined as "blighted" would relieve little of this attack on the security of families in their homes and businesses. As a civil engineer, I know how easy it would be to define pleasant, prideful homes in modest neighborhoods as blighted. To make way for upscale condos, retail stores and offices three years ago, the City of Lakewood, Ohio, declared a neighborhood in a desirable location to be "blighted" because the houses lacked two bathrooms or proper garages, according to "60 Minutes." Property owners in Rochester, New York, told me that they face officials trumping up building code violations on two-family houses to set them up for slum clearance.

The Kelo case was litigated as a neighborhood that was not blighted. The question before the Supreme Court was whether a non-blighted neighborhood could be condemned to make way for one that would bring in more tax revenue. But the neighborhood, Ft. Trumbull on the New London shoreline, could easily have been declared blighted by working with a definition, such as one in S. 5936, where the predominance of the buildings are required to be "economically unproductive" or "deteriorated."

Restoring the Security of Property Owners

During my lifetime, I have not known any Supreme Court decision about private property rights that comes near to fomenting the level of outrage that the Kelo ruling caused. People widely express undiminished anger to this day because the decision destroyed their security in their homes and businesses. The sentiments of people across all walks of life, and across the state and country, are the same. They declare that eminent domain should only be used to take property for highways, schools, hospitals, parks, and like uses, not for new private homes and private commercial development.

The security of the property owner will only be restored if the intended use of the property subject to eminent domain is restricted, not by defining the quality of the neighborhood that can be condemned.

This principle of guaranteeing security of the individual in his or her private property as a fundamental right argues for the approaches proposed in S. 5938 and S. 5961. Both bills take the high road by clarifying the uses to which eminent domain would be applied.

The legislation S. 5938 would restrict the purposes of eminent domain to an exhaustive enumeration of classical public uses. The constitutional amendment S. 5961 takes a different approach. It would restrict the taking of private property to only "when necessary for the possession, occupation, and enjoyment of land by the public at large, or by public agencies"; and prohibit the use of eminent domain for economic development or for any other private use, except with the consent of the owner, with the exception of privately owned common carriers and public utilities. Additional wording in the brief amendment would make crystal clear the protection of the private property owner from a situation like that wrongly permitted in Kelo, by stating, "Property shall not be taken from one owner and transferred to another, on the grounds that the public will benefit from a more profitable private use."

However, I'd like to take exception to the use of eminent domain for housing, which would be allowed by S. 5938. In my opinion, government agencies have caused untold harm by destroying neighborhoods and cultures, and furthered the decline of families, by using eminent domain to build new housing, whether owned by the government or privately. Otherwise, I think that the approach of enumerating the public uses of eminent domain is an excellent approach.

In addition, with respect to S. 5938, although schools are often discussed in the context of being a public use, all schools are not publicly owned, are not occupied by the general public, and are not enjoyed by the general public. Eminent domain should be permitted for government-owned schools and should not be permitted for those that are privately owned. The wording in the proposed amendment is preferred, where the exception from public ownership, occupation and enjoyment by the public at large is solely for privately owned common carriers and public utilities.

Either approach, that of enumeration of the public uses, as in S. 5938, or that of a statement of principles as in the amendment, would represent an excellent measure to restore the security of individuals and families in their homes and businesses.

Public Authorities

The provision in Senate bill S. 5938 to require that local government vote to determine whether or not to condemn property when any industrial development agency approves the use of eminent domain is urgently needed. This provision should be approved as quickly as possible to help rein in the abuse of eminent domain by public authorities.

Ultimately, the power of eminent domain should be taken away from authorities. I think that it sheds light to trace such agencies to an ignominious attempted beginning during Reconstruction. There was an attempt to create a commission in 1877 by state constitutional amendment to place control of all revenue and expenditures by the City of New York in the commission's hands. The commission would have been elected only by property owning residents, cutting out the poorest immigrants. The elite property owners, who supported the city with their real estate taxes, were concerned that the rabble would vote to spend tax money to create public sector jobs that they desperately needed to survive. The amendment failed when the rent-paying poor were aroused by the realization that they would lose their right to vote as citizens.

But another unelected commission was indeed established about thirty years later by the Legislature—to build the Catskill Aqueduct to satisfy the city's need for an expanding water supply. This commission's powers ranged from engineering to financing to eminent domain to managing the immigrant Italian labor force. In the early twentieth century this efficiently managed commission wiped out upstate villages and expanded New York's water storage to flooded river valleys west of the Hudson, after creating one of the then-wonders of the world, the aqueduct.

Most New Yorkers know much of the history of Robert Moses' almost unchecked power to build public works in New York City and metropolitan area, to which history has accorded critical reviews. Today it is widely accepted that Moses' Cross-Bronx Expressway destroyed South Bronx. Moses' public works binge was brought under only citizen control when he faced well-heeled, articulate opposition late in his reign. Robert Caro, who chronicled the rise of Robert Moses in a biography entitled The Power Broker, considers Moses to be the architect of the modern public authority, where the public was effectively kept out of decisionmaking.

Today, New York property owners face the use of eminent domain by the Empire State Development Authority and a number of the other 640-plus state, regional and local authorities. One of the paramount reasons for their supposed efficiency is their insulation from the voter, bringing us back to that first aborted attempt to establish the commission to control the finances of New York City during the final days of Reconstruction.

In the 1870's it was the poor immigrants who claimed their full right as citizens to vote for their government; today it is the citizenry as a whole who are being awakened to the almost unfettered power of unelected government authorities. History records a consistent effort on the part of the state's elites to take the power to scrutinize expenditures out of the ordinary citizens' reach and to remove government from the control of their directly elected representatives. And, ironically, locally elected representatives have been observed to use this lack of direct control as cover to deflect citizen complaints about government abuse, such as excessive eminent domain. It is important that the Legislature give its support to S. 5938 to subject the use of eminent domain by an unelected industrial development authority to the vote of the local elected government body.

Economic Fairness

The proposal to include relocation costs as incidental expenses which may be paid to the owner of property being taken by eminent domain, which is part of S. 5938, is an important reform, which would improve the economic fairness in the difficult situation of eminent domain. Federal eminent domain procedure already requires reimbursement for relocation costs, and this applies wherever federal funds are involved in a project.

Leveling the Playing Field

It is exciting to know that legislation to create an Office of Eminent Domain Ombudsman is being drafted. In the State of Utah, the office of Property Rights Ombudsman has established a record of helpfulness to property owners faced with eminent domain by assuring that their full rights under the law are respected. At the same time, the seven years of existence of the ombudsman have revealed significant savings to the State by reducing litigation. It is my recommendation that the office of Eminent Domain Ombudsman be located in the Department of Transportation. On a federal and state level, much eminent domain law and procedure has been located in the transportation department. In addition, transportation issues related to eminent domain are popularly considered less controversial than issues related to economic development.

Looking to the Future

I applaud the creation of a commission to explore issues related to eminent domain. In addition to exploring the questions related to blight and public use, as now envisioned in the draft legislation, the commission could explore a wide range of issues. For one, it should investigate the impact on households whose property was condemned during the past ten years. The commission should investigate the "willing seller" claim so often used by municipalities, when the government agency points out that eminent domain is rarely used and then only as a last resort. A thorough, unbiased investigation could document the effectiveness of the all-important role of fear of eminent domain in facilitating the acquisition without actually going through the eminent domain procedure.

Downtown Brooklyn and Park South — Being Beaten by the Threat

An analogy explains how well the existence of government's ability to freely use eminent domain makes it possible for government to clear out neighborhoods without using this power for more that a few houses:

A robber confronts you on the street and points a gun at you. You hand over your wallet or pocketbook because you know that he can pull that trigger. An advocate for "robbers who carry guns" could argue that guns in the hands of robbers present very little threat to citizens because, out of, say, one hundred armed robberies, in only two cases did the robber fire the gun.

Just as you knew when you handed over your money that the robber had the power to fire that gun, the property owner knows that when eminent domain is threatened today, it can be used. Representatives of municipal organizations testified at previous Senate and Assembly hearings or were quoted in the media that municipalities rarely use eminent domain for urban renewal. They cunningly say that eminent domain is only used selectively or as a last resort, as though the Legislature should not take the threat of eminent domain seriously. But the trigger of the weapon of eminent domain does not have to be squeezed. The threat does the job to cause property owners to fall into line.

The citizen is confused by the process, knows that litigation is very expensive, and ultimately knows that the books are stacked against the property owner. The property owner knows the power of eminent domain. There is no purpose of waiting for the procedure to be carried out. The loss of home and neighborhood is bad enough. The ordinary citizen cannot bear the added stress of likely fruitless conflict to drag out the process.

This is exactly what is being accomplished in Brooklyn as the clock ticks on and Ratner's stadium and the massive downtown redevelopment roll over the resisting citizens. Deals have been cut one by one with individual citizens. Even originally vociferous leadership is caving in. In this uniquely well organized resistance to eminent domain, some of the best leadership remains in place and still hopes to save the neighborhood. But the threat of eminent domain, before the serving of actual condemnation papers, is winning out, facilitated by the power of the entire process chipping away.

Here in Albany, a few blocks from this hearing room, another neighborhood is being roiled by the threat of eminent domain. Although suffering from crime, Park South includes a well-knit, established section of Albany where the neighbors care about each other and their neighborhood. Here, too, the organization of resistance is weakening. The threat of eminent domain is now being minimized, but has not been renounced, while, on the other hand, millions of dollars in state loan guarantees and tax credits are flowing to the developer. Deals are cut to buy up certain multi-family dwellings at inflated prices. Thus the carrot and stick approach, with eminent domain hanging over the responsible small property owner, tips the scale against resisters who take pride in the community. The property owners who want to hold on suffer additional stress from the divide-and-conquer tactic, as they are categorized as spoilers.

Urgent Need for Reform

Government has gone crazy with the use of eminent domain. The citizenry are crying out for reform. Both the Senate bill S.5938 to provide that eminent domain powers shall be used only for enumerated types of public projects and the proposed constitutional amendment S. 5961A to provide that private property may be taken only for the possession, occupation, and enjoyment of land by the public at large, or by public agencies, would well satisfy the need for fundamental eminent reform in New York State. Passage of either one of these bills would be cause for celebration.

In addition, reform is overdue to reduce the unfair financial burden that eminent domain imposes directly on the owner of the condemned property, justifying immediate passage of S. 5938 to pay relocation costs.

Furthermore, even justifiable eminent domain needs to be transformed into a fair process. The passage of the draft legislation to establish an Office of Eminent Domain Ombudsman to assist the property owner, as demonstrated by experience with a similar program in Utah, would greatly help to level the playing field during this traumatic process.

Finally, the creation of a temporary commission to investigate the need for further reform has the potential to lead to increased fairness and justice for property owners and residents affected by eminent domain.

Thank you for the opportunity to comment on these outstanding legislative proposals.

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