It hasn’t gotten much media attention, but last week, Texas voters overwhelmingly approved Amendment 11, an eminent domain reform measure that purports to ban “economic development” takings of the kind the Supreme Court upheld in Kelo v. City of New London. Texas badly needs stronger protection for property rights, since it has a long history of eminent domain abuse, including recent examples documented by the Institute for Justice (the libertarian public interest firm that represented the property owners in Kelo) in this report.
Unfortunately, the new Texas law is one of a long series of eminent domain reforms that fall short of actually forbidding the kinds of abuses they supposedly target. The amendment does forbid the taking of property for “the primary purpose of economic development or enhancement of tax revenues.” , But it continues to permit condemnations in areas with “urban blight.” And, as I document in this article (pg. 2124), Texas is one of many states where the definition of “blight” is so broad as to include virtually any property that the government might want to condemn. Indeed, Texas’ definition counts as “blighted” any area that, due to a wide range of possible causes, creates an “economic or social liability to the municipality” where it is located. This includes any area that creates an “economic . . . liability” because of insufficient development. Furthermore, the new Amendment still allows the power of eminent domain to be wielded by private organizations if they are “granted the power of eminent domain under [state] law.”
Amendment 11 is a small improvement over Texas’ previous almost completely toothless post-Kelo reform law (which I discussed in this article, pp. 2124, 2135-37). The main positive change is that “blight” now has to be shown on a property by property basis. Previously, local governments could simply declare an entire area blighted and then condemn any property within it, even if there was nothing wrong with that particular tract. However, the impact of this improvement is likely to be minor, at best, given the ease of proving the existence of proving “blight” under Texas’ definition of the term. Amendment 11 also closes the previous law’s loophole allowing takings for “community development.” However, the broad blight exemption undercuts this improvement as well. “Community development” takings can easily be couched as “blight” takings.
Why did Amendment 11 turn out to be so ineffective? One possible explanation is that, under the Texas Constitution, a proposed amendment has to get the approval of two thirds of the state legislature before being submitted to a popular referendum. In my recent article on post-Kelo reform, I found that eminent domain laws that go through the state legislature are far less likely to impose meaningful constraints on condemnation than those that are enacted by an initiative process in which citizen groups can place propositions on the ballot directly. State legislators have strong incentives to water down eminent domain reforms so that takings that benefit influential interest groups can continue. And widespread political ignorance makes it difficult for voters to tell the difference between laws that actually ban economic development takings and those that merely pretend to do so, while allowing them to continue under a different name.