Eminent Domain: Still A Useful Tool Despite Its Recent Thrashing

While the public and the media like to bring attention to a few controversial cases, rarely does anyone recognize the all the good that has come from the sound use of eminent domain by local officials, says David M. Lewis.

Photo: David M. Lewis

Eminent domain has become a term of dread in our nation. Using the words "eminent domain" today is risky because the concept has been draped with negative news and connotations of property-owner abuse.

Rarely does eminent domain get credit for the positive things that have been accomplished through its use. Without it, our urban areas would be places without the great virtues of conformity and sensible land use.

How many good things have been supplied to the general public because eminent domain was used to acquire private property for a higher public use? Shouldn't eminent domain be used to take the land of an auto repair shop in order to provide a site for a charity hospital? Sites are needed for schools, hospitals, libraries and police stations. And where would our cities be if there were no roads, freeways or corridors of transit that were built with the aid of eminent domain?

In a rural environment, almost everyone agrees that it would be a justifiable sacrifice to take a rancher's land to build dams and lakes for providing water supply or electrical power to our cities' millions.

The current controversy and public discussion skims over the much-needed public projects that have been produced through eminent domain. Attention has been focused on a tiny segment of the eminent domain cases -- the rare use of the process to acquire land and blighted properties for redevelopment projects. When the frenzy dies down, most thoughtful Americans understand that it is sensible for government to "condemn land", which is otherwise known as acquiring properties through power of eminent domain. It's been happening for hundreds of years -- a time honored right of government.

Eminent domain has been hot topic nationally since the June 2005 U.S. Supreme Court ruling in the Kelo v. City of New London case, which gave governments the authority to condemn private property for development by private, for-profit investors.

The case focused on the City of New London, Conn.'s taking of waterfront property for a mixed-use commercial development. The small community expected that its actions would be a way to inject economic life into its waterfront. Instead it ignited a firestorm of public outcry across the nation. Almost overnight eminent domain became the most legislated property rights issue in the country, with 30 of the nation's state legislatures passing new eminent domain legislation in the last year. The new laws were designed to prevent eminent domain acquisitions that improperly deliver properties to private developers.

Legislators will respond when there is a public outcry, and a responsive government is a good thing. But when the fervor is peeled away from this legislation the new laws won't make a big impact in America. The cases where eminent domain has been used in conjunction with a private development are very rare, and the new laws will seldom be applied.

However, before we are too quick to dismiss the city leaders of New London as clumsy fumblers, we should consider the underlying merit in their intent.

Eminent domain can indeed be used to breathe new life into blighted areas, just as the New London leaders want to do. My company has been involved in thousands of eminent domain cases across the nation, and it is clearly evident to me that the use of eminent domain can lead to projects that stimulate economic rebirth.

In Houston, for example, land that was obtained to create the Minute Maid Park baseball stadium has benefited the community's downtown in a significant way. The stadium brings millions of people every year into downtown Houston, a place that had previously been a long way from being a lively 24/7 environment. The Houston stadium, an adaptive re-use of an old train depot, received an award from the Greater Houston Preservation Alliance. Around the ballpark, developers have created loft dwellings for young professionals, old buildings have been transformed into hotels, and a new high-rise residential tower is under development. This is all on downtown Houston's east side, which had been nearly a no-man's land in the 1990s.

Similar stories to that of downtown Houston can be told in many other communities.

Has every application of eminent domain in this nation been proper? Has this awesome power of government ever been misused? Certainly there have been problems and errors. Wise judgment is needed by our governmental leaders as they apply their eminent domain powers. If a mistake is made, then officials should be quick to correct it.

However, in most cases eminent domain is used sensibly, and we must not forget it. We should not be too hasty to give eminent domain a bad label. With proper planning and wise judgment eminent domain can be used to make our cities into greater places.

David M. Lewis founded Houston-based Lewis Realty Advisors in 1962. He formerly served as a member of the City of Houston Planning Commission. A certified appraiser, Lewis has been a lecturer in real estate economics and valuation at the University of Houston, the American Institute of Real Estate Appraisals and the Society of Real Estate Appraisers. Lewis was co-managing partner in the historic redevelopment of the Majestic Theater in San Antonio and he has been involved in other urban development activity.

Lewis formerly served as national governor of the Board of Governors of the Counselors of Real Estate organization. A significant firm in national real estate consulting, Lewis Realty Advisors has been involved in thousands of eminent domain cases over the years.

Comments

Comments

Different kinds of eminent domain..

The author mentions towards the beginning that eminent domain does in fact do good things, such as provide land for parks, hospitals, roads and the like. And this is absolutely true.

How many good things have been supplied to the general public because eminent domain was used to acquire private property for a higher public use? Shouldn't eminent domain be used to take the land of an auto repair shop in order to provide a site for a charity hospital? Sites are needed for schools, hospitals, libraries and police stations. And where would our cities be if there were no roads, freeways or corridors of transit that were built with the aid of eminent domain?

And I don't think you would find many people, even among strong believers in property rights, that would disagree that when there is a true need for infrastructure or a public park or hospital or some other type of public use that eminent domain can be justified.

However, then the author switches tracks and suggests that:

1 - Because those previous uses of eminent domain are fine - why not for Kelo?
2 - That the takings of private land for a ballpark is a valid use of eminent domain.

In Kelo - the justification by the NLDC was an increase in the tax base, pure and simple. There was no motivation to provide anything for the residents of New London other than more money for it's officials to play with.

Secondly, Minute Maid ballpark recieved a full 80%, or 180 million dollars of its financing from public sources. We are to believe that after receiving 180 million dollars of public subsidy , the owners of the Houston Astros couldn't even purchase at market rate the property that their stadium was to sit on?

These types of takings are very much not the same animal as what was described at first. The takings of private property to give to private individuals to use for private enterprise only passes for a public use in the loosest sense of the word. It rarely deserves the use of the biggest power that any government has, the power to confiscate something by force.

A Fundamental Clash of Values

Nonsense. Everything the government does has the implicit threat of force behind it. Land use regulation is not a commercial transaction.

Conceding that the power to condemn ought to be exercised wisely and rarely, the proper question is whether any civic value, such as the promotion of the general welfare, ever has a higher value than that of the private ownership of real property. The current hysteria, drummed up by a small cabal, is designed to obscure this long-standing bedrock principle of American governance.

Even in the case of a public road: what are all those private vehicles doing on that formerly private land?

______________________
Stephen Lawton
CD Director
Hercules, California

Why bother to live in societies?

the proper question is whether any civic value, such as the promotion of the general welfare, ever has a higher value than that of the private ownership of real property.

Of course. Why ask such a question? Are you working to undo Rights of Way values?

Best,

D

Values Under Assault

No, of course not. But Howie Rich and others are working to elevate property rights above all others, using deceptive initiatives to install the novel and odious concept of "regulatory takings" into the laws of multiple states. That's why I pose the question.

______________________
Stephen Lawton
CD Director
Hercules, California

Whoops - agreed

Whoops! I missed your point Stephen. Apologies.

Now that I'm taking care not to knee-jerk this reply, I agree with you and in my view the property-rightists must strike quickly for their initiatives, before too much information becomes public; as soon as all the land-use conflicts from these initiatives become apparent, the momemtum will be lost.

Best,

D

Eminent Domain and Scale

In earlier posts, perryair has supported the sort of small-scale development that Jane Jacobs admired. I suspect that he dislikes eminent domain because it generally takes many small parcels and consolidates the land for one large development.

But in Hercules, they want to use eminent domain to take land from Wal-Mart. I believe they would probably break up that large parcel and have it developed by many small developers, in a way that is consistent with the New Urbanist design of the adjoining neighborhood. See http://www.planetizen.com/node/19897.

I wonder what perryair would think about that?

I myself dislike the way that eminent domain is often used to remove existing neighborhoods and replace them with megadevelopments that generate more tax revenues. But I love the idea of condemning Wal-Marts and replacing them with fine-grained neighborhoods.

Charles Siegel

best of intentions..

Charles,

Yes in some abstract world I'd agree that i'd rather see a fine grained neighborhood instead of a walmart. But the problem lies in the execution. There is no good way to set a law into place that says that its ok to take land from private entity X to give to private entity Y, even when X in this case is Walmart and Y is a group of small developers. Soon with just a little bit of political influence, X becomes 'you and all the land owners on your block' and Y becomes Walmart.

In either case, its not the scale in and of itself that matters to me. I don't think that large scale developments should never be built. I do, however, think that anyone that develops any sort those projects should be willing, prepared and able to pay exactly what is asked of them by the people selling their land.

No Good Way?

You presume that all political acts are inherently corrupt. I do not.

Whether parcel assembly or subdivision, or a thousand other possible actions in a particular place, the fundamental idea is that communities can assert community values that, occasionally and rarely, oonflict with private property rights. We enjoy the legacy of a large and thoughtful body of law that provides a fair, reliable, low-cost process for resolving these conflicts.

Howard Rich and the property-rights Taliban want to burn our precious legacy, because they believe that private property rights are superior to all other rights in all cases.
______________________
Stephen Lawton
CD Director
Hercules, California

not all corrupt

Stephen,

Its not that I presume that all political acts are inherently corrupt, its just that i am fully aware that depending on the person and place, politics doesn't always have the intentions of the 'public' in mind, even when its presented in that way.

And even as Hercules is set to use eminent domain to block a Wal-Mart, there are plenty of jurisdictions around the country that are using eminent domain in order to place a Wal-Mart site. You can not have a rule in place that depends wholly on the generosity and fairness of the politician, because in our democratic system, there are lots of times when the 'other guys' are in power and enforcing the rules.

If you remove the capacity for takings of private land for ultimately private purposes, you eliminate the entire possibility of misuse. You place it upon the hands of the developer to then come up with a financially sustainable project plan that includes purchasing property at market rates, which is the only real 'fair and equitable' way.

Lastly, referring to defenders of property rights as the 'property rights taliban' does nothing to further the dialogue between those who have different viewpoints. We all value different things at differing levels. The act of making the unilateral decision that your viewpoint is inherently the right and correct one and that people who hold the other viewpoint are automatically evil is exactly what got the world into its current state of affairs..

Private purposes.

If you remove the capacity for takings of private land for ultimately private purposes, you eliminate the entire possibility of misuse.

Yes. The USC decisions are clear on this and takings must result in a public good.

Best,

D

D, The USC's majority

D,

The USC's majority opinion basically read as - "Courts should not be the final arbiter of land use, legislatures should. So we're going to give them as much deference as possible." And that is what was the impetus for all of the statewide referendums that we're seeing now.

Either way, eminent domain just comes down to how you interpret three things:

* what is a public use?
* what is 'just compensation'?
* What is blight?

So as agencies stretch all three of these things as far as they feel justified to, it is up to legislatures checked by the courts to draw the lines to what those things really mean in today's world.

State property rights initiatives

Well, perryair, the Private Property Rights (PPR) movement started way before Kelo, but at the Federal level. They've shifted their resources to the state level now that the USC isn't going their way. That is: the PPRs didn't just figure this out yesterday. To the rest of your comment, we have, in Kelo, an interesting conundrum: as her property wasn't blighted, the capitalist reason of jobs was used as public good. I find it fascinating.

Best,

D

Perryair -- please see my first post far above

Perry, I have read your posts. I made my first post tonight and probably replied in the wrong place. Its about a shocking case of Eminent Domain abuse taking place right now in Burlington Iowa. I gave some details in my post that is toward the begining of this thread. The city is going to buy and clear 24 acres of housing and sell the bare land to a Minnesota shopping center developer.

Any ideas will be appreciated.

Argument Against All Laws, Not Just Eminent Domain

This argument implies that we should never pass any laws, not just that we should never use eminent domain for private development.

From the premise:
"politics doesn't always have the intentions of the 'public' in mind, even when its presented in that way."

you cannot only reach the conclusion:
"If you remove the capacity for takings of private land for ultimately private purposes, you eliminate the entire possibility of misuse."

you can just as well reach the conclusion:
"if you remove the capacity for passing any laws, you eliminate the entire possibility of misuse."

In both cases, of course, you eliminate the possibility of beneficial use as well as of misues.

Charles Siegel

Not a condemation of all laws

Charles,

I think you're trying to fight a straw man here. Its perfectly valid to know that

1) public servants won't always act with the public in mind

and

2) laws are in fact needed to ensure order as the foundation for any working society.

My suggestion is merely to limit the areas in which eminent domain can be considered as a 'public use'. Without the temptation there to use it for private development purposes, it will be left to be used more for the public uses for which it was intended.

But don't fret - still legally murky is what the definition of what blight and just compensation really mean. Unless these items are dealt with legislatively, they can and will come up again in the legal system as well.

Ban All Eminent Domain for Roads

There is no doubt that the use of eminent domain to build roads has done much more damage than the use of eminent domain to promote private development. It has displaced more people from their homes; Robert Moses alone displaced over 100,000 people to build freeways. It is backed by special-interest groups that profit from it; the construction industry is the main backer of the latest freeway bond in California. It has been the number-one generator of urban sprawl over the last half-century.

So, should we ban all use of eminent domain to build roads?

That is clearly the logical conclusion of your argument that eminent domain for private development has been abused in the past, and therefore we should ban it completely to end all possibility of abuse in the future.

Charles Siegel

a road is still a public use.

Charles,

That is very much not the logical conclusion of my argument.

A road has some rational connection to being a public good. It comes about as close as you can get to the defnition of a 'public good' in the economic sense of the word. So to the extent that local and state (and federal) leaders decide that a road is needed in X location, X's rights to do something about it are limited at best beyond trying to get just compensation for their loss.

That type of eminent domain bears little resemblance to purely economic development based eminent domain. If you can not even utilize the very loosely defined 'blighted area' to justify a taking for reedevelopment purposes than you're on shaky ground indeed.

Freeways Are Not Public Goods

Perry:

Though local streets meet the economist's definition of public goods, limited-access freeways do not. They can be built by private businesses and funded by charging tolls.

The classic justification for using eminent domain to build freeways, rail lines, or power transmission lines is that any one property owner can stop a project that benefits many people by refusing to sell -- or can essentially blackmail the project by refusing to sell unless he gets far more than the market price of his land.

This is the market failure originally used to justify eminent domain in economic theory.

It has nothing to do with whether freeways, rail lines, and power transmission lines meet the economists definition of public goods; none of these classic uses of eminent domain does. And it has nothing to do with whether the project is publicly or privately owned; all these classic uses of eminent domain can be owned either way.

Of course, all these classic uses of eminent domain can be abused - so your argument from abuse logically implies that we should ban use of eminent domain for all of them.

Charles Siegel

slippery slope?

Again, nowhere am I claiming that because ED can be abused in any format that we should eliminate it totally. This right here is the ONLY thing that matters in this discussion:

"nor shall private property be taken for public use, without just compensation."

My definition of public use clearly excludes a lot of things that i'd imagine that you consider to be public uses. And that is the only logical conclusion you can or should draw from this exchange.

Eminent Domain at its worst in Burlington Iowa Now

I hope some will be able to give ideas that could help the residents in a low income neighborhood that the city of Burlington Iowa voted just last night to buy. The city plans to destroy the homes of over 400 low income people, 90% renters, and then sell the 24 acre parcel of bare land to a shopping center developer. A new casino is being built nearby. The targeted housing area can be seen from the highway that leads to the Casino.

I will share this as a link to the Burlington Hawkeye story printed today about the public hearing that took place last night.

http://www.thehawkeye.com/daily/stories/ln16_0926.html

I have lots of information about this shocking story that was revealed to the public on Sept. 8 by a Hawkeye newspaper story. There have been several stories printed in the Hawkeye on the subject and a few letters to the editor of the Hawkeye that are on line.

As some on this list will probably know, Iowa's Legislature passed a more restrictive Eminent Domain law this summer over Gov. Vilsack's veto. But, the section covering blight does not go into effect until Oct. 1st of this year. The new law requires a 75% blight in order to use Eminent Domain. The old law does not have that protection. So Burlington is sneaking in this land grab just before the new law takes effect.

Burlington staff and city council members worked on this project for over a year, as revealed in one Hawkeye story. Last night was the very first time that the city council considered the project in open formal city council meeting. The council voted for the project directly after the public hearing.

Its a big heartbreaking mess and the housing is not as bad as some of the stories may lead you to believe. Every apartment in that project is inspected every year and approved by the city. Yet, suddenly the city council and staff are saying that the housing needs to be destroyed. This is a good example of why there needs to be controls on Eminent Domain. I just found your forum a few minutes ago.

Unfortunately..

Charlotte,

Unfortunately it seems as though the city is using blight control as their rationale for eminent domain. (this is notoriuously hard to define or fight) And under the old set of laws, it appears as though they may have the power to do so. This falls outside of even the scope of Kelo and what much of the state level initiatives are aiming to limit.

I'd think that the best thing that the residents could do is to 1) try to hold up the process by forcing some kind of third party review of blight status or 2) build a media presence to this story which leads to 3)getting political support.

The City Council voted for it and the best bet is to force/shame/coerce/convince/etc the City Council to see why it might not be the best idea to wipe clean an existing neighborhood when it appears at least that there is plenty of vacant commercial space available in the town.

One thing that always baffles the mind is how people just can't see long term enough in the future to imagine that a run down neighborhood could possibly rebound and become a great neighborhood.

Nominally Kelo, centrally private property rights initiatives.

This falls outside of even the scope of Kelo and what much of the state level initiatives are aiming to limit.

Actually, of the four remaining initiatives (after the two that got thrown out due to deceptive wording), only AZ has Kelo-type wording. ID is a pay (no 'waive', all pay), CA is 'pay or waive', WA is 'pay or waive' - including for private property.

These are nominally about Kelo, as that is what the Pacific Legal Foundation, The Institute for Justice, Howie Rich, and other private property rights folks are using to push their agenda at the state level.

Best,

D

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