Thinking outside the box: urban land re-use

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The Kelo decision, compelling property owners to sell to developers, is highly unpopular, but does answer (if badly) the need of older cities to make available to developers large tracts of land, to provide housing, shopping, business space, and other needed facilities. Forbes Magazine offers an intriguing alternative: co—ops of existing owners able to assemble and sell to developers from a stronger bargaining position than individual property owners could wield.

A new state law would work like this: If a group of urban owners wished to consolidate their properties, they would petition the city. A transfer agreement for streets, parks and other public services would get worked out. Then if a supermajority of 70% or 80% voted to approve, a new private community association, including all the property owners, would be established.

There would be no cram—down eminent domain; the property owners themselves, through a supermajority vote within their association, would approve any sale. And they'd get a price set not by judicial decree but by private negotiation. Proceeds would be divided according to the association's rules. If the owners preferred to stay in the neighborhood, rather than sell out, their new association would then function much like a residential version of a business improvement district. They could collect assessments, for instance, to sweep the sidewalk.

In the 1930s the Wagner Act provided for collective bargaining between newly organized workers and businesses. Today we need an urban Wagner Act that will enable collective bargaining between neighborhood property owners and developers.

Not a comprehensive solution, but worth exploring.

Ed Lasky   12 02 05

The Kelo decision, compelling property owners to sell to developers, is highly unpopular, but does answer (if badly) the need of older cities to make available to developers large tracts of land, to provide housing, shopping, business space, and other needed facilities. Forbes Magazine offers an intriguing alternative: co—ops of existing owners able to assemble and sell to developers from a stronger bargaining position than individual property owners could wield.

A new state law would work like this: If a group of urban owners wished to consolidate their properties, they would petition the city. A transfer agreement for streets, parks and other public services would get worked out. Then if a supermajority of 70% or 80% voted to approve, a new private community association, including all the property owners, would be established.

There would be no cram—down eminent domain; the property owners themselves, through a supermajority vote within their association, would approve any sale. And they'd get a price set not by judicial decree but by private negotiation. Proceeds would be divided according to the association's rules. If the owners preferred to stay in the neighborhood, rather than sell out, their new association would then function much like a residential version of a business improvement district. They could collect assessments, for instance, to sweep the sidewalk.

In the 1930s the Wagner Act provided for collective bargaining between newly organized workers and businesses. Today we need an urban Wagner Act that will enable collective bargaining between neighborhood property owners and developers.

Not a comprehensive solution, but worth exploring.

Ed Lasky   12 02 05