In response to popular demand, The University of Chicago Federalist Society has posted a podcast of my recent debate on Kelo and post-Kelo eminent domain reform with former U of Chicago Law School Dean Saul Levmore. Current UC Dean Michael Schill moderated. The podcast is available here. A good time was had by all, and I got some interesting new ideas for my planned book on Kelo and its aftermath. I am grateful to the UC Federalist Society for organizing this event, and to Dean Levmore and Dean Schill for their excellent participation.
I would like to briefly comment on a point Dean Levmore made that I didn’t get a chance to address at the debate. He claimed that “90 percent” of people whose property is condemned are happy about it (perhaps because they get high compensation). I would very much like to know the source for this statistic. Most studies of eminent domain compensation suggest that undercompensation is very common. For an excellent recent example, see this article by Yun-chien Chang, which finds that a majority of New York City takings involved less than fair market value compensation.
Many property owners actually value their land above the market price, which is one reason why they continued to own it in the first place instead of selling. So even fair market value compensation often won’t fully offset their losses. Studies of victims of blight and economic development takings (some of which I noted in the last part of this article) show that many of them end up far worse off than before. In that same piece, I also explained some reasons why even fully adequate compensation would not eliminate all the dangers of Kelo-style economic development takings.
Levmore is right that overcompensation is also problematic, since it might lead to people lobbying for their property to be condemned. That, however, rarely happens in the status quo, which is yet another indication that undercompensation is far more common than the reverse.
It’s possible that I misunderstood Levmore, and he simply meant to say that 90% of people whose land is condemned don’t contest the taking in court. That may well be correct. But if so, it is largely the result of the high cost of litigation and the low likelihood of winning, rather than actual satisfaction with the condemnation.
Butternut says:
Kelo...the Dred Scott of our times. They said old Dred liked a good whuppin’ cause he got fed better after it was over. Well, if not, at least the whuppin’ stopped...for awhile.
Quote
February 6, 2010, 10:09 pmPodcast of my Debate on Kelo and Post-Kelo Eminent Domain Reform with Saul Levmore | Liberal Whoppers says:
[...] the original post here: Podcast of my Debate on Kelo and Post-Kelo Eminent Domain Reform with Saul Levmore [...]
Publius says:
The government wanted my property and was unwilling to buy it for a fair price. They were shocked that I would go to court. Naturally, the court excluded important evidence, such as the offer I received for the property. The game is rigged against the property owner. I was unhappy with the process, as was my neighbor.
Quote
February 7, 2010, 8:04 amJoe says:
Getting paid for your house to be taken away after a democratically (with members of your own race, btw, involved) decided upon effort with some “public” purpose (however bad or nonexistent) was involved = blacks aren’t citizens. This being a local effort, not a national major piece of legislation on the issue of the day.
The Roe comparison, however inapt, is a bit more credible.
Also, if 10% are unhappy, we are talking a decent number of people. So, Publius’ account is not really useful.
Quote
February 7, 2010, 8:43 amButternut says:
Thanks, Joe. I had forgotten about the reference to race in the Thirteenth Amendment. Before its ratification life was hunky dory regarding that local issue as democratically decided upon.
Being denied personal freedom, by force, solely for the “profit” of slaveholders and being denied property, by force, solely for the “profit” of the state both spit in the face of liberty.
Quote
February 7, 2010, 10:25 amJoe says:
Thanks, Joe. I had forgotten about the reference to race in the Thirteenth Amendment. Before its ratification life was hunky dory regarding that local issue as democratically decided upon.
Not sure what your point is since I didn’t reference the 13A. Before the time of the 13A (and 15A), blacks generally couldn’t vote; slaves surely did not. Here Ms Kelo and other property owners had a chance to vote for the people who set up the plan in place.
Being denied personal freedom, by force, solely for the “profit” of slaveholders and being denied property, by force, solely for the “profit” of the state both spit in the face of liberty.
The fact both “spit” doesn’t mean they are comparably corrosive. Slavery is more akin to acid than saliva.
Also, the plan was for the ‘profit’ of the community at large. “The state” is not this faceless entity here but a local community voted by the people. “The people” are to blame here ultimately.
Quote
February 7, 2010, 1:46 pmJoe says:
BTW, eventually “the people” of the state amended their state constitution to limit economic takings. Dred Scott held the government could not treat blacks as federal persons as a constitutional matter. It would take a national constitutional amendment to override it. Missouri had no power, even after it abolished slavery on its own in 1865, under its rubric to declare blacks (particularly former slaves) were constitutional persons.
One more reason the two are not quite comparable.
Quote
February 7, 2010, 1:53 pmDan Schmutter says:
Big fan of Levmore, as he was my torts professor at U.Va. I never saw chickens and vegetables the same way again.
However, he is almost certainly wrong with that statistic. We do lots of condemnation work at my firm, and the condemnor always tries to low ball you with their offer of just compensation. And even if you do get a close to market value award from the commissioners, it costs considerable counsel fees to get there.
So you are never compensated in full, even when the commissioners get the number right.
Dan Schmutter
Quote
February 7, 2010, 2:50 pmED Maven says:
If Levmore said what you describe, he’e out of it. Studies have been done going back to the 1960s, and they revealed a pattern of undercompensation. More recently, there have been studies in California, Minnesota, Georgia, and Utah, all showing the same result: undercompensation.
Because the great majority of condemnees do accept the [inadequate] offers, condemnors are reinforced in their behavior. So what if they get hit hard in trials of some cases? They make it up on the multitude of others where they get to acquire property below its FMV. The reasons for such low incidence of litigation are unfamiliarity with one’s rights, the cost of litigation (small cases with a spread of $100,000 or less cannot be litigated economically), a belief that “you can’t fight city hall,” etc.
More important, the judicially defined FMV — as SCOTUS repeatedly conceded — does not reflect the actual transactions in the market. It ignores elements of value that participants in real transactions insist on.
Add to that the fact that a lot of demonstrable economic losses are judicially deemed noncompensable, and any owner who would want to have his land taken would be irrational.
Finally, condemnation lawyers charge contingent/overage fees (a percentage of the overage above the offer) so if things were the way Levmore believes they are, those guys would starve.
Quote
February 7, 2010, 9:09 pmButternut says:
Yes, Joe, slavery was the albatross this country was born with. The fact they were almost exclusively black added to the dilemma then and up to this day. However, without the myopia of the American experience, slavery is a colorless, genderless, sexless and secular affliction that eats at any society it touches. The right to personal freedom is inherent to man. I believe we killed a few people during the argument before we settled the question. As to your acid and spit, I will not ask for the basis of your expertise.
Takings is a touchy exercise. When it is done for the sole purpose of stuffing public coffers it takes on a different guise.
Just as there is no argument to justify slavery of another, there is no argument that justifies seizure of property from one to enrich another merely on the promise of public coffer enrichment. That is all economic takings are. To take from individuals under government power with the ultimate aim being to enhance government power. Frankly, I don’t give a damn who votes on it. The right to property is inherent and without it we ultimately starve.
Why folks are discussing the wispy straw man of over or under compensation is quite disheartening to me. Of course, your argument that Ms. Kelo had the chance to vote for or against those who took her property is disheartening as well. Mobs vote all the time.
Quote
February 7, 2010, 11:38 pmCB says:
Prof Somin,
I’m obviously not a fan of libertarianism, however, I applaud your Kelo efforts.
Quote
February 8, 2010, 1:09 pmED Maven says:
Butternut:
When your property gets condemned, make sure to let us know if you still consider undercompensation a “wispy straw man.”
Quote
February 8, 2010, 6:55 pmButternut says:
E D Maven,
I see your perspective. Once you have decided that the guy with the gun to your head really means to have sex with you, the question of lubrication becomes pertinent.
I,on the other hand, prefer to keep my eye on the gun I intend to take away from the bastard.
Quote
February 9, 2010, 8:41 am