Every once in a while the Supreme Court issues a horrific decision – one which meets with general condemnation, such as the Dred Scott, Plessey v. Ferguson, and Korematsu cases.
The most recent infamous opinion of this ilk is the 2005 decision of Kelo v. City of New London, where the Court in a reviled opinion held the government could condemn private property to turn over to a developer, who presumably would make more productive use of the property.
New London is a picturesque coastal town in Connecticut. Like many communities in the Northeast and Midwest, its traditional economic base is declining. New London was looking for economic development, and thought it found salvation in convincing Pfizer to build a large facility in New London, and develop a hotel, offices, condos and shops on the surrounding site. The city’s planners and political leaders salivated at the prospect of $1.2 million annually in increased property taxes, and thousands of jobs.
The only hitch was that the landowners, the residents who resided in the nice nine-acre Fort Trumbell neighborhood, refused to sell or move. New London therefore decided to condemn their houses, and then turn the site over to a developer.
The Court opined that the use of eminent domain for economic development constitutes a legitimate public use under the 5th Amendment’s Takings Clause: “Nor shall private property be taken for a public use, without just compensation.” The landowners’ argument was that the government does not have the power to take private property for a private use.
The Court held that the projections of economic growth, jobs, and tax revenues, as well as community revitalization constituted a public use.
The reaction to Kelo was quick, widespread, and generally hostile. Either by citizen referendum or legislation 43 states have limited the power of eminent domain.
Even if five justices, the media, and some politicians don’t understand the evil of Kelo, the public does. We believe that the government should leave our homes and businesses alone. To turn our houses and businesses over to rich developers or businesses defies the essence of America; we are equal. If it could happen in New London, it could happen anywhere in America. Those with money or power could use the government to squeeze out the less affluent.
Kelo is a singularly poor decision for three reasons. First, it violates the intent of the Bill of Rights. Our Founding Fathers realized that the Constitution granted broad powers to the government, but provided no protection to the people. The next step therefore was to adopt a Bill of Rights, which limited the role of government while recognizing the rights of the people.
The majority opinion interpreted the 5th Amendment to give rights to the state at the expense of the individual, clearly a judicial perversion of the Bill of Rights.
Kelo is also bad economics and public policy. It is premised on the illusion that government planners can map the future. The market will determine economic growth, not government planners. They will no more plan the future than the old 5 year plans of the Soviet Union. The result of Kelo is a $78 million investment by the city and state in a vast 24 acre vacant lot and a symbolic black hole in the ground representing no property tax revenues. The city traded weeds for homes.
Third, among the groups opposed to the decision are those representing minorities. Minority communities have long been victimized by earlier urban renewal projects, as well as being the recipient of land uses anathema to affluent communities. They know, and history proves, that the impacts of Kelo will disproportionately fall on their communities. The term is environmental justice.
Part of the reasoning of Kelo was based on dicta in a 1954 Supreme Court decision, Berman v. Parker. The case involved a standard 1950’s type urban renewal project: condemn the land in a “blighted” neighborhood, usually near downtown, and then turn it over to a developer to renew the area. The displaced residents then simply started a new ghetto elsewhere in the city. The projects were often unsuccessful in the long run, with the only profits being realized by the developers. Corruption or influence peddling was often the factors in choosing the developer and site.
Pfizer announced last week that it was closing the 750,000 square foot New London facility, resulting in the loss of 1,400 jobs over the next two years.
The redevelopment was bankrupt.
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