Jay-Z and Alicia Keys sing “there’s nothing you can’t do” in New York.  That may be true for Hova, but it’s not supposed to be true when it comes to eminent domain under New York law.  A purported “public purpose” is insufficient to seize private property for economic development.  So government authorities resort to “blight” designations to condemn private property they would like to redevelop.  This is the strategy being used for the Atlantic Yards Arena and Redevelopment Project in Brooklyn.  Yet as Nicole Gelinas reports, the blight designation here is a bit of a stretch, as it relies upon the condition of the Metropolitan Transit Authority’s railyards, occasional weeds and grafitti, and the alleged “underutilization” of local properties.  As Gelinas notes, if “underutilization” is sufficient to constitute blight, then nearly any proposed economic redevelopment project could utilize eminent domain under New York law.

Categories: Eminent Domain, Property Rights    

    40 Comments

    1. Tweets that mention The Volokh Conspiracy » Blog Archive » New York: Where “Underutilization” Equals “Blight” -- Topsy.com says:

      [...] This post was mentioned on Twitter by PostRank – Economics and New York Locksmith, Gregory Gelfond. Gregory Gelfond said: New York: Where “Underutilization” Equals “Blight” http://tinyurl.com/ybs6vo7 [...]

    2. Enemies Ready, U.S. About To Drop It’s Pants. « Moonbat Patrol says:

      [...] New York: Where “Underutilization” Equals “Blight”  The Volokh Conspiracy [...]

    3. athEIst says:

      Let us not forget the city in far S.E. California where Hyundai wanted to build a racetrack in the desert outside the city. Some owners refused to sell, the city annexed the desert area desired by Hyundai, declared THE DESERT BLIGHTED, condemned, and transferred it to Hyundai. Public purpose, doncha know.

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    4. Debauched Sloth says:

      If only there were some mechanism for preventing governments from engaging in this kind of duplicity. We could call it, I don’t know, “checks and balances.”

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    5. Mike McDougal says:

      As Gelinas notes, if “underutilization” is sufficient to constitute blight, then nearly any proposed economic redevelopment project could utilize eminent domain under New York law.

      That’s exactly right. Another obvious way to put it is this: Every rational for-profit real estate developer is attempting to eliminate “blight.” (I suppose their could be exceptions in projects that are driven by tax consequences.)

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    6. Strict says:

      “the blight designation here is a bit of a stretch, as it relies upon the condition of the Metropolitan Transit Authority’s railyards, occasional weeds and grafitti, and the alleged “underutilization” of local properties. As Gelinas notes, if “underutilization” is sufficient to constitute blight, then nearly any proposed economic redevelopment project could utilize eminent domain under New York law.”

      If the blight designation relies on the condition of the property AND the underutilization of the property, that doesn’t mean that the underutilization ALONE is sufficient to constitute blight.

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    7. David McCourt says:

      If “underutilization” equals blight, then I suppose the greatest small art museum in the western hemisphere, the Frick, should be condemned. There it sits, a large house, on Fifth Avenue at 70th, only three stories tall, with a wide expanse of lawn between building and sidewalk, and a garden behind as well; a selfish little gap in the canyon of properly utilized apartment towers. Knock it down — sure, take the Vermeers and Titians out first — and let Ratner unblight it.

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    8. B.D. says:

      Eminent domain for the “public purpose” of economic redevelopment is theft, and the perpetrators are government and the developers who stand to benefit.

      Everyone has his price. Even the property owners who claim they’ll never sell have a price—they definitely have a price. The difference between that price and the actual compensation for their property represents the amount of the theft.

      The same can also be said of property seized for an actual public USE, such as libraries and roads and schools. But at least that kind of theft was clearly contemplated by the 5th Amendment.

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    9. Mike McDougal says:

      Strict: If the blight designation relies on the condition of the property AND the underutilization of the property, that doesn’t mean that the underutilization ALONE is sufficient to constitute blight. 

      What’s the standard of review for a determination in New York that a property’s “condition” constitutes blight?

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    10. Mike McDougal says:

      B.D.: The difference between that price and the actual compensation for their property represents the amount of the theft. 

      I think you need to account for strategic holdouts. I wouldn’t call twarting or undercutting a holdout’s strategy per se “theft.”

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    11. B.D. says:

      Mike McDougal:
      I think you need to account for strategic holdouts.I wouldn’t call twarting or undercutting a holdout’s strategy per se “theft.”

      What do you mean by this? If someone is holding out, it’s because they won’t accept what you’re offering. Strategic or not, it reveals them to have a higher asking price. So it’s theft.

      So are you saying we should relieve private developers of the hard work of actually negotiating agreeable purchase prices with property owners because some might be “strategically” holding out? Wow, I’d love the have the power of the state behind me when I’m buying my house.

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    12. jmaie says:

      I think you need to account for strategic holdouts. I wouldn’t call thwarting or undercutting a holdout’s strategy per se “theft.”

      I would. It’s his property and should be his decision whether to sell.

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    13. alkali says:

      If only there were occasional elections so that citizens of New York had some sort of say in who ran that city.

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    14. B.D. says:

      alkali: If only there were occasional elections so that citizens of New York had some sort of say in who ran that city.

      OK, then. I never want to hear you complain about any law or policy of any democratically-elected government.

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    15. Strict says:

      “What’s the standard of review for a determination in New York that a property’s “condition” constitutes blight?”

      It’s probably very deferential.

      Sometime it’ll be obvious (e.g. air testing reveals dangerous levels of asbestos and the landlord has not taken any steps to remove, replace, or encapsulate the asbestos in the building), and sometime it won’t be.

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    16. David McCourt says:

      It’s simple. As the normal incentives of monetary gain in private transactions, freely entered into by wiling parties, are insufficient to place land in the hands of those who will utilize it best — yet another market failure in a season where market failures are raining cats and dogs! — then what is needed is condemnation: a “public option” where the politicians (and their friends) will make sure these resources are allocated efficiently.

      Just another feature of the state as ant colony.

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    17. A. Zarkov says:

      Strict: If the blight designation relies on the condition of the property AND the underutilization of the property, that doesn’t mean that the underutilization ALONE is sufficient to constitute blight. 

      Hard to say. The Constitution prohibits “cruel and unusual punishments,” does this mean both must apply? In other words, drawing and quartering would be allowed so long as it’s not unusual. On the other hand, if you read the Constitution as saying that cruel punishments are prohibited, and unusual punishments are prohibited, then drawing and quartering would not be allowed no matter how common.

      We need some kind of expert of statutory construction here. It’s a good question.

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    18. Pragmaticist says:

      How about a constitutional amendment that any private property taken by any Federal, State, or local governmental entity be compensated for at treble the fair market value. Of course, then you’ll have people lobbying to have their private property taken!

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    19. SuperSkeptic says:

      alkali: If only there were occasional elections so that citizens of New York had some sort of say in who ran that city. 

      If only there were no political parties and actual meritocratic candidates and elections that made blind appeals to democratic legitimacy not also mindless and unrealistic.

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    20. David Welker says:

      Just a bit of logic here.

      You says that X, Y, and Z are argued to constitute blight. (Where Z is underutilization).

      Then you complain that Z should not be sufficient to constitute blight.

      But, if X, Y, and Z are argued, in combination, to be sufficient to constitute blight, that does not imply that Z alone is sufficient to constitute blight. I assume there is something you are not telling us in this post that leads you to believe that Z is in fact a sufficient condition.

      Now, if you take the standard dictionary definition of blight as applied to urban areas, it would be something like “an ugly, neglected, or rundown condition of an urban area” (from dictionary.com).

      Clearly, “neglected” things or places definitely tend to be “underutilized.” After all, there is an incentive to not neglect that which you use heavily. So, it seems that utilization should at least be a factor in any blight analysis.

      Further, it seems that you are possibly misconstruing the concept of underutilization. This would be a continuous rather than binary variable. That is, if something is “underutilized,” the question would be a matter of degree.

      It would make sense to put more weight on high levels of underutilization and low weight on low levels of underutilization in any blight analysis. In fact, in some cases, it might make sense for underutilization to be a sufficient condition for finding blight (that is, a place that is hardly used at all for any legitimate purpose, such as an abandoned lot or building). In other cases, a small amount of underutilization certainly should not be sufficient for finding blight. (There are many legitimate uses made of the property or area, but some areas are not used during some times.) My point is that just because underutilization is a factor in the analysis, and in some cases even a sufficient condition, that does not logically imply that areas that are merely slightly underutilized could be classified as blighted.

      Anyway, what is your true position here? Do you believe that even blighted areas should not be subject to eminent domain? Because, I simply do not see how one could formulate a good definition of blight that did not consider utilization or lack thereof. 

      Alternative, if your complaint is really about underutilization itself and isn’t an extreme position that we should treat blighted areas precisely like anywhere else, perhaps you could enlighten us and tell us what sort of test for blight you would propose that does not consider the intensity of use of an area and why this would be better than an analysis that did consider such use.

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    21. Debauched Sloth says:

      Pragmatist –

      Actually what we do have is a constitutional amendment that says the government may only take private property for public uses. Unfortunately, what we don’t have is a Supreme Court that believes, as the Framers of the Constitution and the Fourteenth Amendment plainly did, that property ownership is a “fundamental” right. Talk about judicial activism.

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    22. David Welker says:

      Debauched Sloth,

      Clearly, the main point of the phrase “nor shall private property be taken for public use, without just compensation” is to require just compensation. Since the 5th Amendment is not the source of the power to take property, I don’t think the text is best read as limiting takings for public use. Also, we have to keep in mind that the 5th Amendment was originally meant to only limit the federal government and not the states. I think it is best read as saying that all takings (which when done by Congress certainly should only be on behalf of the public) require just compensation.

      If the founders wanted to distinguish between public use and private use, they probably would say something like this:

      “Nor shall private property be taken, except for public use and with just compensation.”

      This would be much more clear that what they did in fact say. I personally think the way you are reading the 5th Amendment is a stretch, because it seems like mentioning public use is merely incidental (as if all takings are, by definition, for public use).

      I would be interested in researching the historical evidence that might shed light on this though. I could be wrong. If anyone has any suggestions for primary sources shedding light on this topic, I would be interested.

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    23. Ryan Waxx says:

      Clearly, the main point of the phrase “nor shall private property be taken for public use, without just compensation” is to require just compensation. Since the 5th Amendment is not the source of the power to take property, I don’t think the text is best read as limiting takings for public use. 

      Why does that remind me of the creative reading of the second amendment to limit the right to milita?

      If there is a limit on taking land for a public use, that doesn’t necessarily mean that it’s open season on takings for a private use: That would be an absurd reading of the amendment, since logically you’d want MORE restrictions on that kind of taking, were it allowed at all. “Public use” is in there for a REASON, I think you’d agree. And if you can’t conceive of a non-absurd reason for those words to be there after you apply your parsing, then perhaps your parsing is incorrect.

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    24. David Welker says:

      Ryan Waxx,

      You have my opinion on what the words mean. However, that opinion is subject to change based on evidence.

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    25. New Pseudonym says:

      Since the 5th Amendment is not the source of the power to take property

      What, then, is the source?

      5th Amendment was originally meant to only limit the federal government and not the states.

      As were many other amendments numbered under 14.

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    26. David Welker says:

      New Pseudonym,

      What, then, is the source? 

      Read:

      Article I, Section 8
      Article II, Section 2

      As were many other amendments numbered under 14.

      Yes, but the fact that the Federal government is a government of enumerated powers while state governments are of a different nature may have implications for how we apply the 5th Amendment to the states.

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    27. Ryan Waxx says:

      If the takings clause wasn’t incorporated, then why was the supreme court involved in Kelo at all?

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    28. David Welker says:

      Ryan Waxx,

      Did I say it wasn’t incorporated?

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    29. Harvey Mosley says:

      Clearly, the main point of the phrase “nor shall private property be taken for public use, without just compensation” is to require just compensation. Since the 5th Amendment is not the source of the power to take property, I don’t think the text is best read as limiting takings for public use. 

      Under this reading, compensation is only required for takings for a public use, while takings for a private use require no compensation.

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    30. David Welker says:

      Harvey Mosley,

      To avoid such an absurd result we might think carefully about what is meant by the term “public use.” Congresses legitimate role is to serve the public. Back in the day, Alexander Hamilton thought it would be wise for the government to engage in various policies that would benefit US manufacturers, even though these are private parties. But, he nonetheless thought that it would advance the public good for the US to have a more robust manufacturing sector. That is, Hamilton clearly thought that engaging in economic development would be of benefit to the public.

      You may avoid the absurdity that concerns you by realizing that any actions taken by Congress are, by definition, for the benefit of the public and thus of public use. Therefore, if you have a taking, you must have just compensation. The government would never be in a position to defend failure to compensate for a taking based on the argument that the taking was intended to benefit a private party only, and not the public generally. Such a defense would be tantamount to admitting corruption.

      Once again, I do not think that the original meaning of this phrase in the 5th Amendment is entirely clear. However, I think that based on how it is worded, the best reading is that the phrase “public use” was not meant to be a primary object of the phrase “nor shall private property be taken for public use, without just compensation.” It seems to me that it is best read as taking for granted that all takings would be, of course, for public use. That said, the ambiguity is certainly not insignificant and I would be willing to revise my view based on evidence from primary sources (as opposed to further argument about the text, which really cannot do anything to cure the ambiguity by itself).

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    31. Debauched Sloth says:

      David Welker –

      As noted by others, your gloss on the Fifth Amendment’s takings clause is problematic for a number of reasons, including: (1) under your reading compensation is required for private-to-public compelled transfers, but not private-to-private compelled transfers; (2) if all takings can be understood to be for a “public use” simply because Congress authorized them, on the premise that Congress always acts for the public benefit (I note in passing that “benefit” is not the same as “use,”) — a proposition the Framers would emphatically have rejected, by the way — then the phrase “for public use” is meaningless verbiage; and (3) the Supreme Court has consistently understood the Takings Clause to prohibit private-to-private transfers for over two hundreds years (Calder v. Bull, 3 Dall. 386, 388 (1798), which renders your reading all the more idiosyncratic.

      All of this takes me back to my original point: there has been a shared understanding throughout the entire history of this country that the government may not take property from one private owner and give it to another private owner for private use — even with “just compensation.” But the Supreme Court figured out a way to evade that restriction — not by renouncing its centuries-long interpretation of the Fifth Amendment as forbidding private-to-private compelled transfers, but instead by down-grading property ownership to “non-fundamental” status and then inviting the government to make up “conceivable” justifications that in many cases (like here) have nothing whatsoever to do with the real purposes for which the property is being taken. I think that lacks integrity, I think it makes a mockery of constitutional law, and I think it’s terrible policy to boot. Cf. Pfizer’s recent skulking retreat from New London.

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    32. David Welker says:

      Debauched Sloth,

      First of all, I just want to be clear what we are arguing about. We are not arguing about current law. We are arguing about the original meaning of the 5th Amendment.

      Your point (1) is clearly dealt with in my last comment. With respect to point (2), I do not think that the words in the Constitution are meaningless verbiage, if it is the case that the text of the Constitution does not leave a role for the judiciary to second-guess Congress with respect to a particular provision. Remember, it is not only the role of the judiciary to interpret and follow the Constitution, but the role of the Congress and the President to do so as well. That is, it would go against the duties of Congress as envisioned to engage in corruption (pass legislation that redirects resources for purely private benefit). That is, one cannot say that language is “meaningless” merely because it does not create a standard that is easily enforceable by the judiciary. While, of course, your assertion that “benefit” and “use” are different terms is correct, in normal language anything that is “of benefit” can be said to be “of use.” That is, something is “useful” precisely because it provides “benefits,” so I think any sharp distinction is probably a product of your disposition to arrive at a predetermined outcome. (3) Caldur v. Bull was about whether the ex post facto clause as applied to civil matters, and the ruling was in favor of the State of Connecticut’s change in law that resulted in the party that would have otherwise won in probate, losing instead. I would be curious as to why you think this case, which resulted in a ruling that state legislatures have extensive powers to alter the results that would have otherwise occurred in ongoing litigation and noted the Connecticut’s long-standing authority to order new trials, is relevant. If this case is relevant, it seems to harm rather than help you as it affirms rather than limits the exercise of power by the states.

      Again, I think there is limited use in further arguing about the textual meaning here, at least without evidence from primary sources. My position on the best interpretation of the original meaning of the words themselves, without further evidence, is clear. But, if you could actually produce primary evidence (something more than mere arguments or assertions) that sheds light on this topic, I would be interested, especially as I do acknowledge some ambiguity in the precise meaning of the phrase in question.

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    33. David Nieporent says:

      While, of course, your assertion that “benefit” and “use” are different terms is correct, in normal language anything that is “of benefit” can be said to be “of use.” That is, something is “useful” precisely because it provides “benefits,” so I think any sharp distinction is probably a product of your disposition to arrive at a predetermined outcome. 

      The problem with your logic is that (a) the fact that something which provides benefits might be useful does not mean that these words are interchangeable and (b) the test is not “useful,” but “use.” The public simply doesn’t “use” a Pfizer headquarters, whether or not it provides “benefits” to the public.

      As for your little discourse on “underutilized,” you are mistakenly treating it as synonymous with “unutilized.” But under many land grabbers’ definitions, anything other than highest and best use is underutilized. That is, “underutilized” doesn’t mean, to them, that the property isn’t being used, but that some other landowner might get more use out of it, where “more use” just means a use the city likes more.

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    34. Lumi says:

      Ironically, Jay-Z is a part owner of the NJ Nets, for which eminent domain is being used, which underscores the lyric, “there’s nothing you can’t do” in NY.

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    35. Debauched Sloth says:

      David Welker–

      Calder v. Bull, 3 U.S. 386, 3 Dallas 386, 1 L. Ed. 648 (1798) (“An ACT of the Legislature (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority . . . . A few instances will suffice to explain what I mean . . . [A] law that takes property from A. and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with SUCH powers; and, therefore, it cannot be presumed that they have done it.”) 

      You claim to be interested in achieving an originalist understanding of the Fifth Amendment’s public use language, but then you systematically (and unpersuasively) brush aside any arguments or authorities that cut against your preferred interpretation — without citing any support for your position beyond your personal impressions, which seem rather obviously informed by a strong preference for majoritarianism. But that preference is not reflected in the text or structure of the Constitution, which was originally conceived not merely as a blueprint for government (which is how most judges seem to approach it today) but as a charter of liberty. And that’s not just rhetoric — it actually seems to have meant something important to the people who wrote and ratified the document, in part to secure “the blessings of liberty” for themselves and their posterity.

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    36. David Welker says:

      David Nieporent,

      First, what is meant by the term “use” in the phrase “public use” is ambiguous. But, something is either “used” or “of use” precisely because it provides benefits. So, I think a more broad understanding of the phrase is applicable, as the distinction you propose does not seem to serve any useful purpose and in fact would tend to hinder private participation in serving public ends.

      It seems to me as well that your cramped understanding would hinder public-private partnerships which may be required to finance infrastructure. For example, if it were necessary to exercise the power of eminent domain to build a transcontinental railroad, it seems to be your position that the government must own the railroad. There is absolutely no evidence that I am aware of that such enormous implications, which would tend to hinder private participation and funding of such projects, was intended.

      There is nothing within the phrase “public use” that would inherently require such an extreme result. 

      Second, you are making the same mistake that Adler did with respect to the concept of underutilization. You are treating the concept as binary. Either something is underutilized or it is not. But, this is a continuous not binary concept. That is, the question is not merely whether something is underutilized, but the degree. Of course, “unutilized” is merely one extreme (and too extreme to be useful as a test for blight) as even the most neglected, run-down vacant lot might be “utilized” once every 10 years for some meeting or gathering and hence not be “unutilized.” A test that required property to be totally unutilized would fail to identify blight in the majority and perhaps even all cases. I would imagine that one would only advocate such a test if they felt that property that was in fact blighted should be treated just like all other property. But, in that case, one should not be arguing against using underutilization as a factor in determining blight, instead one should be arguing against the idea that blight should matter at all.

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    37. David Welker says:

      Debauched Sloth,

      You are citing to mere dicta that was not even agreed to by any of the other justices, all of whom wrote their own opinions. Further, the Justice Chase’s idea that the Supreme Court might enforce arbitrary concepts of natural law, as opposed to the text of the Constitution itself is clearly rejected by Justice Iredell in his opinion in the very same case. I think we can conclude that you simply do not know how to read a Supreme Court opinion. But, let me list some basic problems:

      You are citing dicta that:

      (1) Had little or nothing to do with the case actually before the Court.
      (2) That was not agreed to by any of the other justices.
      (3) That was not an interpretation of the 5th amendment.
      (4) That was based on Justice Chase’s conception of natural law, and not his interpretation of the Constitution.
      (5) Where Justice Iredell explicitly rejects the notion that it is the Court’s role to enforce conceptions of natural law that do not appear in the Constitution. It is precisely because natural law either does not exist or is not clear enough such that we can arrive at a shared understanding of it (take your pick) that we need a written Constitution.

      Anyway, I have not “brushed aside” any evidence you have brought to the table. Instead, I have demonstrated how to read a case, a skill which you obviously do not yet possess, and have applied it to the one source you have cited which does not actually support the proposition you claim it does.

      Again, I invite you to provide actual evidence from primary sources that support your proposition regarding the original meaning of the particular phrase of the 5th Amendment we are examining. You can make assertions, but evidence is much more persuasive.

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    38. Debauched Sloth says:

      David Welker –

      Both the majority and the dissent in Kelo rejected your proposed interpretation of the Fifth Amendment, consistent with two centuries of Supreme Court jurisprudence. Of course, you could be right and the Supreme Court (along with every other court to consider the issue) could be wrong, but “Well, I just think so” is an awfully thin reed upon which to base that argument.

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    39. David Welker says:

      Debauched Sloth,

      Once again, as I mentioned earlier, I am not talking about current Supreme Court jurisprudence, I am talking about the original meaning of the text of the Constitution. Given the ambiguity, I am interested in evidence from primary sources. As far as the meaning of the text on its face, you already have my opinion on the best interpretation.

      But if you prefer to discuss only current Supreme Court jurisprudence, then clearly economic development takings (which don’t even require condemned property to be blighted) qualify as a public use. End of story.

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    40. The Volokh Conspiracy » Blog Archive » New York Appellate Court Invalidates Taking of “Blighted” Property for Transfer to Columbia University, but Contradicts State Supreme Court in the Process says:

      [...] studies and used similar arguments to justify his findings only accentuates the tension. Indeed, “underutilization” was the main evidence for the existence of blight in the Atlantic Yards proje..., as well as in the part of Manhattanville condemned for transfer to [...]

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