June 28, 2006
The Aftermath of the Kelo RulingBy Janet Levy
One year ago, on June 23, 2005, the United States Supreme Court opened the floodgates for the abuse of eminent domain by state and local authorities with its Kelo v. City of New London decision. That decision held that private property could be taken by government agencies and turned over to private developers under the guise of 'economic development.'
Since that time, private property seizures by local municipalities and state authorities have increased dramatically. According to a recent report issued by the public—interest law firm, the Institute for Justice, 5,783 properties have been seized or threatened with seizure nationwide within the last year, compared to only 10,281 properties over the five—year period from 1998 to 2002. This rise in eminent domain seizures indicates a significant change in the relationship of American citizens to private property. It also represents an alarming weakening of Constitutional protections under the Fifth and 14th Amendments, which protect citizens from unlawful seizures.
These protections were ignored in the Kelo case, which arose after the City of New London, Conn., faced with a declining tax base and a forecast of limited growth, devised a development plan in 2000 to 'further economic development' for the area. A hotel, conference center, state park, new residences and office space were part of the plan, as was the demolition of over 100 private residences.
In order to proceed with their development plans, the municipal government used the New London Development Corporation, a private, non—profit entity under city control, to acquire the necessary land in New London's Fort Trumbell neighborhood. Although 15 residents refused to sell, the City of New London ordered the residences condemned and seized for the project. Suzette Kelo, the lead plaintiff in the case, was an eight—year resident of Fort Trumbell who had made extensive improvements to her home with its waterfront view. Another petitioner, Wilhelmina Dery, had been born in her home in 1918 and lived there her entire life. Her married son had purchased the home next door and also lived there with his family for decades. The 15 property owners who were determined not to sell their homes sued the State of Connecticut and brought the first eminent domain case heard by the high court in over 20 years.
Historically, eminent domain has been limited by the Fifth and 14th Amendments to the Constitution. The Fifth Amendment restricts the federal government from the taking of private property except for 'public use' without 'just compensation.' The 14th Amendment extends those same restrictions to state and local governments. Those rights were only slightly modified in a previous, 1954 U.S. Supreme Court decision on eminent domain, Berman v. Parker. In that case, the court allowed property seizure for private development, but only to eliminate blighted or depressed areas.
However, when the court in its 5—4 Kelo decision agreed with the City of New London, it substantially expanded the definitions under which property could be taken and essentially removed existing Constitutional protections for private property. The Kelo decision expands the powers of government granted in the Berman ruling to include private development for the much broader purpose of 'economic revitalization.'
Economic revitalization often benefits the community at large, but more specifically and significantly it enriches private developers who often are the impetus behind new development. For example, documents obtained after the Kelo decision under the Freedom of Information Act link the City of New London with development efforts by drug manufacturer, Pfizer Inc. Pfizer completed a $300—million research facility on adjacent land, and sought redevelopment of Fort Trumbell and active use of eminent domain as long ago as 1997.
The Kelo decision paved the way for the expropriation of prime real estate, such as view properties and waterfront locations, and provided legitimacy to over—hyped projects proposed by large developers. It made it easier for government to condemn private property under the rationale that a proposed use for the property could produce more taxes or jobs and revitalize a 'blighted' area.
Although municipalities view eminent domain as an important tool for economic revitalization, many citizens groups view it as a legalized form of abuse of individual rights by the government. Many projects are approved based on the overstated promises of developers who are well connected to local politicians.
In the immediate aftermath of the Kelo decision, private property rights advocates predicted that certain populations, the elderly, poor and minorities, would be disproportionately affected by the decision, as would certain property classifications. Those classifications now at risk to politicians' whims and the influence of powerful, private developers include houses of worship — exempt from taxes and which contribute no revenues to economic revitalization — farms, small businesses and private residences.
Since Kelo, those predictions have come true. The overwhelming majority of development projects undertaken by municipalities within the last year involved the displacement of low—income residents. Local and state authorities have continued the trend of seizing residences and replacing them with more upscale ones. Several instances exist nationwide of upscale hotels replacing small businesses and shopping malls replacing private homes.
In addition, as noted in the Institute for Justice report, at least 16 churches have had to make way for private development and agricultural land has been taken for retail development.
Since Kelo, property owners have been afraid to refuse to sell their land voluntarily because government now has the power to condemn it and take it away from them. As a result, competition has arisen among developers who scour private land for their projects. The threat of condemnation has also made blight a self—fulfilling prophecy as property owners, unsure of court outcomes, defer maintenance and improvements while they await court rulings. More than 10 subsequent court decisions have cited Kelo as a precedent in rulings against owners and in favor of municipalities over proposed, property seizures.
Meanwhile, more than 85% of Americans support reforms to protect their property from eminent domain abuses, according to various national surveys.
In response, 31 state legislatures have passed laws curbing eminent domain abuse since Kelo. A bi—partisan effort to strengthen private property rights, H.R. 4128, the Private Property Rights Protection Act, has been sponsored by James Sensenbrenner (R—WI), Henry Bonilla (R—TX), Maxine Waters (D—CA) and John Conyers (D—MI). The bill passed (376 to 38) in the House in November but has been stalled in the Senate. H.R. 4128 contains provisions to deny federal economic development funding to state and local governments that abuse eminent domain for private commercial development, as in the Kelo case. The bill limits private property takings to cases in which the continued use of the land by existing owners is considered harmful and a threat to public health and safety.
On the one—year anniversary of the Kelo decision, President Bush issued an Executive Order that 'federal agencies cannot seize private property except for public projects such as hospitals and roads.'
This gesture was largely symbolic, however, because the federal government has a limited role in such projects. But U.S. Sen. John Cornyn (R—TX) applauded the order, explaining that 'the protection of homes and small businesses and other private property against government seizure or unreasonable government interference is a fundamental principle of American life and a distinctive aspect of our form of government.'
Cornyn decried the Kelo ruling as 'a radical departure' from the decisions relating to private property rights over the last 200 years. He welcomed the president's order as 'an important step toward righting that wrong.'