Tuesday, July 05, 2005

Responses to a heretic

John Hinderaker, famously of Power Line, is also a lawyer. I understand he's a good one. I know for certain that he's got a sharp mind and opinions I respect greatly. Power Line is one of the 3 blogs I check a few times a day, every day. John is a fairly regular contributor to The Daily Standard and has an article there regarding the Kelo decision in the Supreme Court. His reference to the article as "heretical" is both the target referenced by the title here and references his expected reception from conservatives who thought the Kelo decision was an injustice. Far be it from me to disappoint him. As I said, I respect John's views and opinions greatly. That doesn't mean his argument isn't flawed and his conclusion not dead wrong.

I've written already today on the matter of using anticipated tax revenues for the basis of eminent domain. I maintain that the fact that these tax revenues cannot be guaranteed renders them useless as a justification to force a private entity to divest itself of a lawfully held property. Feel free to read my thoughts at that other post. To address the issues of this new article by one of the Power Line Titans, however, will require more specific points. Allow me to address them in turn. First, John makes the point that the animosity toward Pfizer is unwarranted, and he's correct. Pfizer in no way instigated this action by the NLDC (New London Development Corporation) and has made no comment one way or the other on the case or the decision. Anyone ticked off at them is making assumptions and the wrong ones, to boot. I noted with a bit of puzzlement the description he makes of the Fort Trumbull area:

::::::::Focused on a 90-acre area called Fort Trumble that is comprised of both publicly and privately owned land, the project includes a typical mix of public and private uses: a pedestrian "riverwalk," a waterfront hotel and conference center, marinas for recreational and commercial uses, a new Coast Guard Museum, new residences, and an industrial park to which the city hopes small biotechnology companies will be lured by Pfizer's nearby research facility.::::::::

Does this sound like "urban blight" to you? I've personally driven in this area and I can assure you it's no slum. It's not Bill Gate's neighborhood, but it's not the "bad" part of the Bronx, either. Note particularly the "new" stuff there. A museum, new houses - that sort of thing. Sound dilapidated to you? Me neither. And this begins the parts of the article where I find more and more issues.

::::::::The issue before the Court was phrased very broadly by the majority: "We granted certiorari to determine whether a city's decision to take property for the purpose of economic development satisfies the 'public use' requirement of the Fifth Amendment." Thus, if the minority had prevailed, no municipality in America could condemn any property in order to carry out an "economic development" project. This would have the practical effect of making such projects virtually impossible.::::::::

I would say, then, that the question brought before the Court was phrased too broadly, if this was the result. I have no idea who gets to set the question being asked, so I can't say it was the property holders or the city officials. But the conclusion that economic development projects would be virtually impossible to complete if the ruling had gone the other way is ridiculous. Is it being claimed, now, that no such economic development (are we saying "urban renewal" anymore?) project has been completed in the United States without the use of eminent domain? If there has, in fact, been such a completion then the truth is that eminent domain takings aren't a necessity, they're just an easier method for the city planning corporations and officials. I stand convinced that the Constitution was not written to make the jobs of city planners easier. That it's easier to simply serve up an eminent domain filing and kick a property holder off his land is not in question. Clearly it is. The question was and is: should it be legal to do so when the land will not have something built upon it that provides the public with something to use? Is it legal to do so given the stated restriction in the Constitution that such takings are only to be allowed for "public use?" Ease of urban planning was not the issue on the minds of the Founders and any argument that relies on this as justification or support is injecting something into the debate that has no place within it.

The justification has been made that Court's precedents allowed such takings for "urban blight" and that this is only a teensy bit further along the line.

::::::::It is noteworthy, however, that the Supreme Court held long ago that a governmental unit can use its eminent domain power to relieve "urban blight" (see Berman v. Parker, 348 U.S. 26, 1954). That principle was not challenged by any party in the Kelo case or by the Kelo dissenters (with the possible exception of Justice Thomas). So, had the dissenters been in the majority, a city would be powerless to carry out a redevelopment project in a neighborhood that is only depressed--like Fort Trumbull--but if it waited until the neighborhood is actually blighted, a redevelopment project would be permissible. Permissible, but probably too late. It is not obvious how this result would represent an advance for either individual rights or public policy.::::::::

This statement is so clear an example of a slippery slope it should be enshrined in a dictionary. We've already said that redevelopment of urban blight is permissible. What's urban blight? Abandoned buildings. Buildings still owned by someone but not used - boarded up, chained up, etc. Buildings so horribly out-of-repair that average laymen can look at it and tell that it's crumbling. These are examples of urban blight and most everyone agrees with both the definition and actions taken to remove it. But now it's not a matter of a blighted area, it's an area that might become blighted. "Depressed" areas will, if we accept the premise in this argument, become blighted. Every time. It's inevitable. The only thing that happens when you hold off seizing the land and starting redevelopment is that the depressed area turns into urban blight. The Kelo decision was required to allow city planners to get in there and make a preemtive strike to keep the blight from happening to begin with, goes the reasoning. And your footing on the slope goes with it.

At what point do we call an area "depressed?" What's the criteria that says Fort Trumbull is "depressed" and Mystic, less than 10 miles away, isn't? Or Groton, right across the river? Compared with northern Virginia, all of northeast Ohio is depressed. Do we start eminent domain processes against Canton, OH? The law is replete with issues where a lawfully allowed response is only acceptable under specific conditions and not before. An eminent domain taking of a blighted neighborhood but not one that's simply depressed is just another of these and the fact that it is isn't a reason to change anything about it.

As for a decision reversed of Kelo being an advance for individual rights, I must ask: why was an advance necessary? To imply that the ruling had to do more than simply maintain the status quo that a property holder be allowed to keep his property absent a real and justifiable public use of that land is assuming much. The same goes for public policy, especially where public policy gets its advance by stomping individual rights into the ground. In any case, I can't find the advance for individual rights anywhere in a decision that allows an individual's home to be taken away and used to put up a shopping mall on the hope that the mall will generate more tax revenue.

From this point on, I began to have differences of opinon in increasing numbers, taking issue with just about every other statement made. Forgive me if this starts to look like a fisking - it wasn't intended to be.

::::::::Some hostility to the Kelo decision seems to be based on the belief that Corcoran Jennison may profit from its work--an odd concern, one might have thought, to be expressed by conservatives.::::::::

I'm afraid I have to call "straw man" on this one. No one's upset that a company will profit from its work. The issue, if I may turn the focus back to where it belongs, is that the profit is generated working on raw material - land, in this case - that the developer did not own and coould not acquire without the government stepping in, yanking it out from under the legal property holder and handing it to the developer. It's not the profit from the work anyone has an issue with, it's that the work was only allowed by stepping on the property rights of an owner whose only "'crime" is that he didn't have the assets or desire to develop the land as some bureaucrat thought would be best.

::::::::But New London's use of a private developer highlights an important point: there is no doubt that the city (or the NLDC) could use its eminent domain power in support of the Fort Trumble project if it planned to retain ownership of the land and administer the project itself. If the project were publicly owned, no one could question that the associated condemnation proceedings would be in support of a "public use." But are the rights of Americans any less imperiled by condemnation in support of publicly-owned projects? And, as a matter of policy, if a city wants, for example, to create more housing, does it make any sense to force it to pursue the long-discredited practice of building public housing projects, rather than facilitating the use of private capital and private management to achieve the same end?::::::::

Begging John's pardon, but it was certainly doubtful that the use of eminent domain was appropriate in taking land from a property owner for the purpose of building something for another private entity. That's what the court case was for. The issue was not who was paying for the construction or who owned the property after the building was done, although these are valid concerns. The issue was whether or not some anticipated tax revenue increase was a sufficent reason to force people out of their homes and businesses. Bringing up public housing merely proves my point. Is it right and proper to take away a man's home so you can give a home to someone else? The project management of the construction is immaterial.

::::::::There have, in fact, been development projects in recent years that have strained the Fifth Amendment's "public use" requirement to near, and perhaps beyond, the breaking point. In a number of instances, cities have condemned thriving businesses to clear space for a company to erect its corporate headquarters. Such transactions--very different from anything at issue in Kelo--can perhaps be characterized as seizing property from one individual or business to give it to another.::::::::

I fail to see the difference in taking land away from a legitimate property holder and handing it over to a company to build its headquarters and doing the same thing to hand over to someone to build a hotel. Perhaps John's a bit more discriminating than I am but it certainly appears to be the same thing to me.

::::::::Even here, though, it is possible to sympathize with the affected municipalities. Suppose a large company whose headquarters are located in an urban area needs more space--say, a whole city block. Lacking powers of eminent domain, it has only two choices. It can negotiate with each landowner on the block and try to buy all of the individual parcels. This, however, is often difficult or impossible; once it becomes known that the company is buying land for its corporate headquarters, any individual landowner can block the project by refusing to sell. Occasionally such "holdouts" are motivated by sentimental attachments, but usually they simply want to extort an unreasonable sum from the corporate buyer. (It is interesting that in her Kelo dissent, Justice O'Connor stressed that: "Petitioners are not hold-outs; they do not seek increased compensation. . . ." Yet the majority opinion notes that "[t]en of the parcels [at issue] are occupied by the owner or a family member; the other five are held as investment properties." If petitioners had won their case, the value of those investment properties would have skyrocketed.)::::::::

Again, I'm absolutely not going to concede that the Constitution was written in any way whatsoever with the concept of making urban planning an easy job. Making the job easy should never be a consideration in determining what the Constitution means, and any attempt to do so is going to run into a brick wall with me. John brings up the number of people who were living on their land versus those who owned it for investments and suggests that those folks would be opportunistic gougers in demanding more money for the property than they might have gotten selling it in the residential housing market. (Considering that at the beginning of this article, he was issuing a mild rebuke at any conservative who might take issue with someone making a profit, I have to ask what his point is, here.) First, it shouldn't matter if there were 10 of 15 owners who were using their properties to reside upon or if it were 1 in 15. The fact is that there were people who bought their property, built a house on it or bought one with the land, and were living on it. Those people should not be required to leave their homes simply because they have no more ambitious a design for their property than to live on it in peace. That someone else thought the land would be much nicer with a hotel or a company headquarters on it is supposed to be a non-issue - they don't own the land.

And what about those land investors? John says that once the word got out that a company was looking to buy the land, the values would have skyrocketed. So what? Economics tells us that the value of a property isn't what the seller says it is, it's what the buyer says he's willing to pay. If the buyer values that land highly because of its location, then the value is supposed to skyrocket. Its value increased because the company put more value on having that particular piece of property than the average home-buyer would. That's free enterprise. Again, the Constitution doesn't say anything about making sure property was priced at a point where a prospective buyer would be comfortable paying. That's up to the current owner and the prospective buyer. Or, at least, it's supposed to be.

John rounds out his arguments by pointing out that there are political forces that will make this sort of event rare and implies that most municipalities will be loathe to take this path for fear of the political backlash. Apparently there are those out there who are getting over it quickly. A few days ago I ran a link to a site that was detailing the efforts of various governments around the US who are taking full advantage of the Supreme Court's ruling and are pressing ahead with no qualms whatsoever. The Institute for Justice counted 13 eminent domain actions either restarted having held off waiting for the SCOTUS decision or started up fresh as a result of it. There is no incentive at all for local governments to avoid using this tactic given that they've been protected by the Supreme Court and the only practical weapon the local populace has against them can only be exerted at election time. Usually, that's plenty of time to get the job done.

I understand why John's having second thoughts and he deserves credit for stepping out with what he knew wasn't going to be a popular position. I just believe, with all my intellect and my soul, that he's in the wrong on this one.