Taking a Wrecking Ball to Property Rights
There’s a famous photo from Tiananmen Square that has long captured the public imagination: In it, a single man in street clothes stands down a line of Chinese tanks rolling in to put down a protest.
The image came to mind this week while the supreme Court was hearing oral argument in Kelo v. New London, a property-rights case in which politics is being conducted by bulldozer.
The case involves a group of homeowners in New London, Connecticut, who are suing to prevent the city from condemning their homes in order to give the land to a real-estate developer. The developer intends to erect a private commercial spread, including luxury housing and private office space for such companies as drug giant Pfizer.
New London justifies its action under eminent domain, a constitutional power that allows government to take private property for “public use.” Historically, the power was intended to allow government to seize land it needed for things like roads or schools, as long as the owner was compensated. But in recent years, eminent domain has become the worst kind of corporate welfare, practiced at the expense of those who can least afford it.
In Kelo, the city justifies the seizure on the grounds that the new complex will contribute to urban renewal while raising the tax revenues the city receives from the property. Similar tactics have been used to condemn church property to make way for Costco (California), blocks of local residences to make way for shiny new malls (Ohio) and family land in favor of Nissan (Mississippi).
If it sounds like a litany of Robin Hood gone to the dark side, there’s more. Since the landmark 1981 case Poletown Neighborhood Council v. City of Detroit, in which the Michigan supreme Court ruled Detroit could condemn an entire community in the interest of giving its land to a new General Motors plant, abuse has been rampant. (The Michigan court has since [unanimously] reversed its decision, but the damage was done.) By one analysis, eminent domain was used more than 10,000 times between 1998 and 2002 to transfer title from one private owner to another.
Some of the most common uses of the law have been on behalf of sports stadiums and casinos, which local governments tout as great community enhancers and revenue machines. But often, it is politically powerful companies that are the beneficiaries. In Pennsylvania, when H.G. Heinz wanted a new location, the city of Pittsburgh got on the horn and threatened to use its eminent domain powers to get it the plot it wanted.
The same goes for the situation in Connecticut where, if New London gets its way, Pfizer will be the proud recipient of a new “office park.” And though the city bears greatest legal responsibility, the drug company should be ashamed of itself. In recent years, pharmaceutical companies have fought valiant battles to protect their own intellectual-property rights, despite “public interest” arguments that the drugs they discovered should be stripped of their patents or given away for a song.
Indeed, the Pfizer Journal, in an article on land reform, writes that “property rights are fundamental to human health and dignity. And protection of property—including the property of the mind—is fundamental to the industries that make jobs available to drive a healthy economy.” We’re sure the citizens of New London would agree.
After all, eminent domain seizures are never a pretty exercise. While the law stipulates that the city must pay market value for the property, in many instances, the payments are lowballed—sometimes as much as 50 percent. Meanwhile, the increased value of the property is not taken into account in the sale—whatever “benefits” may accrue from the development are never passed on to previous residents.
The issue has united people from both ends of the political spectrum, from the libertarian Institute of Justice to former Green Party candidate Ralph Nader. Nader, in his recent book on corporate welfare, deplored the business-political backrubbing exercise that makes a habit of condemning low-income property for the convenience of corporations. That it is done for the sake of community development is often a canard, he adds.
Nor do most of the condemned neighborhoods live up to [fit] the supreme Court’s own standard of “blight” set forth in its 1954 decision in Berman v. Parker. (New London’s plaintiffs have nice, middle-class homes). Besides, if corporations want to move into poor areas, nothing is stopping them from buying out homeowners at a price they would accept. “Gentrification” happens all the time, without any help from mayors.
In Kelo, defense counsel was asked on Tuesday whether higher tax revenue could justify any property seizure as in the public interest—say, that of a Motel 6 to make way for a Ritz-Carlton. Yes, he responded, if the difference is significant. But by that standard, nearly every piece of private property is effectively in play, at the whims of city planners.
Property rights were written into the Constitution explicitly to defend against this very brand of wrecking-ball politics. Respect for private land is what separated this country from others with a penchant for seizing and nationalizing things at whim.
So here’s to property owners around the country who are standing up to the bulldozer’s advance. Let’s hope the supreme Court gives them reason for a toast.
This article appeared in the Seattle Times at http://seattletimes.nwsource.com/html/opinion/2002189279_collin25.html and is posted here by permission of the author.