Is eminent domain necessary for revitalizing cities?

Samuel Staley's picture
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Planners are split on eminent domain-one group believes it's a critical component of planning since it allows them to implement plans more quickly. Others believe eminent domain does more to destroy urbanism than build it up. I've weighed in on it numerous times, including this commentary published by Planetizen.

One of the biggest hurdles for opponents to eminent domain is the simple and highly relevant question: "What's the alternative?" Many believe the presumption should be in favor of sweeping away old urbanism to accommodate new development. Without eminent domain, how could neighborhoods revitalize or adapt to changing economic circumstances?

I was prompted to revisit this question while viewing the most recent video installment of the Drew Carey Project on reason.tv.  This is the second segment on eminent domain by Drew, and this one has a pretty important twist: It highlights the redevelopment efforts of Anaheim, California. Anaheim, under the leadership of Mayor Curt Pringle, has adopted a resolution prohibiting the use of Eminent Domain for redevelopment purposes.

Guess what? Redevelopment is humming along just nicely in Anaheim without eminent domain.

This is quite a contrast to the efforts north of the city in Los Angeles. There, the City of Los Angeles cleared away an entire block, including 30 local businesses, to build a high end luxury hotel and condos. The city claims it's a win-win because the property owners got paid market rates. The business owners and property owners think otherwise.

The video also raises an important policy question: just because someone is paid market rates for property, is it fair? Is it fair to forcibly seize someone's property just because the property owner had a different vision for redevelopment than the city council-organic, street-level development instead of a high-rise luxury hotel in the LA case? The property owners are now deprived of the opportunity to redevelop the property because they city had a different, potentially more lucrative (for the city) vision. Eminent domain proceedings don't compensate for unrealized expectations or plans by the property owner. 

As a libertarian, of course, I don't think it is fair. Market prices don't necessarily reflect the value we individually place on property, land, buildings or other goods and services we own, especially if we don't want to sell them. The so-called market price used in legal cases reflects the value others place on those things. In the case of eminent domain, even though a property owner is compensated, the transaction is coerced so the entire concept of a market price is problematic from the get-go. (Market prices presume that transactions are voluntary.)

Notably, the developer for the LA property in the video admits the project would not have gone forward without the implicit subsidy of eminent domain. This raises yet another question: if the market would not have supported the project, what public purpose was it serving? 

Sam Staley is Associate Director of the DeVoe L. Moore Center at Florida State University in Tallahassee.

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