The Volokh Conspiracy

Richmond Times-Dispatch columnist A. Barton Hinkle recently published this piece on a case of eminent domain abuse in Virginia:

As a general rule, progressives do not get worked up about property rights the way conservatives do. This is a mistake — as a case out of Norfolk shows.

To the progressive eye, property is bound up with materialism and wealth and greed and other yucky things. But property is also bound up with some things progressives hold dear. And even progressives were outraged when, in its 2005 Kelo decision, the Supreme Court said governments could take property from the poor and give to the rich.

That is what has been happening in Norfolk, where the city’s Redevelopment and Housing Authority has been using eminent domain to take dozens of pieces of private property for resale to a foundation run by Old Dominion University. The housing authority has been collecting commissions on the sales; the foundation has then been turning the property over to developers for their use as part of a swanky new University Village.

Among those properties is the building that houses Central Radio, whose story was detailed here back in May 2010. Some years ago, Norfolk offered to buy the property for a lowball price of $700,000 (more than a decade before, a developer had offered more than $1 million). Central Radio’s president, Bob Wilson, turned the city down. So the city slapped a spurious designation of “blighted” on the property and condemned it.

Norfolk couldn’t get away with that today. Virginia’s General Assembly has sharply curtailed such abusive use of eminent domain, precisely because of cases such as this one and others like it….

But the legislature’s changes to eminent-domain law included a grandfather clause, allowing Norfolk to proceed. Wilson is naturally cheesed off. He has vented his frustration by putting up on the side of his building a protest banner. (“50 years on this street,” it reads. “78 years in Norfolk. 100 workers. Threatened by eminent domain.” The words “eminent domain abuse” are surrounded by a red circle with a slash through it.)

But Norfolk officials apparently feel it is not enough to take away Wilson’s property. They also are trying to take away his right to free speech, by insisting that his banner violates the city’s sign ordinance….

Hinkle correctly notes that this is just one of several recent cases around the country in which local governments and influential developers not only engaged in dubious takings, but also tried to prevent property owners from speaking out against them. As he also points out, Virginia is one of a minority of states that has enacted strong post-Kelo eminent domain reform that will constrain abusive condemnations in the future. But as I documented in this article, in many other states reform still has a long way to go. Even in Virginia, eminent domain reform will not be fully secure in the long run until it has been incorporated into the state constitution, as well as statutory law.

Because blight and “economic development” takings tend to victimize the poor and politically weak for the benefit of the wealthy and politically powerful, they have generated widespread opposition on the left as well as the right. We will need greater cross-ideological cooperation on this issue to fully address the problem.

The Fordham Urban Law Journal City Square website has posted a debate between NYU Professor Roderick Hills and myself on the the New York Court of Appeals controversial decisions upholding “blight” condemnations in the Atlantic Yards and Columbia University cases. In my 2011 symposium article “Let there Be Blight,” I argued that these takings violated both the New York state and federal constitutions. I especially emphasized the incompability between the court’s decision defining blight so broadly that virtually any area could qualify with the New York state constitutional provision limiting blight condemnations to “substandard and unsanitary areas.” Hills has written a critique of my analysis. My reply is available here.

Hills is one of the leading property and federalism scholars out there, and I always learn from our exchanges. As I explain near the end of my reply, in this case there may be more areas of agreement between us than initially meet the eye.

Today, I published an op ed in the Daily Caller on the passage of Mississippi referendum Measure 31, an important eminent domain reform law. Here is an excerpt:

The Supreme Court’s 2005 decision in Kelo v. City of New London generated a record political backlash. Kelo upheld the condemnation of private property for transfer to other private owners in order to promote “economic development.” The case inspired widespread outrage. Polls show that over 80% of the public opposes economic development takings. As a result, 44 states have enacted eminent domain reform laws that restrict the condemnation of property for the benefit of private interests.

The most recent state to react to Kelo is Mississippi. On Tuesday, Mississippi voters adopted Measure 31 by a decisive 73% to 27% margin. The new law will make taking property for economic development unprofitable by forbidding most transfers of condemned land to a private party for 10 years after condemnation. The measure is a major victory for both property owners and the state’s economy.

Tomorrow, Mississippi voters will decide the fate of Measure 31, an important eminent domain reform proposal. Mississippi is one of only seven states that has not enacted any eminent domain reforms at all since the Supreme Court’s decision controversial decision upholding “economic development” takings in Kelo v. City of New London.

Measure 31 would effectively ban economic development takings by forbidding most condemnations that transfer land to private parties during the first ten years after condemnation. Economic development condemnations are often used by powerful interest groups to acquire land for themselves at the expense of the poor and politically weak. In Mississippi, recent condemnations have transferred land to big auto firms such as Nissan and Toyota. Mississippi Governor Haley Barbour and others claim that these takings are needed to promote economic growth. In reality, economic development condemnations often destroy far more economic value than they create, by wiping out homes, small businesses and schools.

Many of the post-Kelo reform laws enacted in other states fail to impose genuinely effective restrictions on economic development condemnations. Legislators have found various ways to produce bills that have major loopholes. The most common tactic is that of allowing economic development condemnations to continue under the guise of alleviating “blight.” Many states define “blight” so broadly that almost any neighborhood qualifies and is therefore subject to condemnation. Such unlikely areas as downtown Las Vegas and New York’s Times Square have been declared “blighted” for the purpose of justifying condemnations. The New York Court of Appeals recently upheld blight takings justified by a combination of virtually limitless definitions of blight and biased studies conducted by a firm with a severe conflict of interest. Fortunately, Measure 31 avoids this pitfall by forbidding blight takings except in cases where the land in question is severely dilapidated or poses a direct threat to public health and safety.

Politicians enact ineffective reform laws in part because it is difficult for voters to tell the difference between a real “anti-Kelo” bill and one just for show. A 2007 Saint Index survey found that only about 13% of Americans knew whether or not their state had passed an effective post-Kelo reform law. As I explain in this article, referendum initiatives like Measure 31 tend to be stronger than reforms adopted by state legislatures because many of them are drafted by activists rather than by politicians. Measure 31 was submitted by the Mississippi Farm Bureau Federation (small farmers are often victims of eminent domain in the state). The vast majority of post-Kelo referenda adopted by voters impose tough restrictions on takings.

Unlike state legislators, the property rights activists who wrote most of the citizen-initiated anti-Kelo ballot initiatives had no need to appease powerful pro-condemnation interest groups in order to improve their reelection chances.

Measure 31 isn’t perfect. It still leaves the door open to abusive takings in genuinely blighted areas, and possibly to dubious condemnations on behalf of common carriers and public utilities. But it’s still a huge improvement over the status quo in Mississippi, which includes both an extremely broad definition of blight and a statute authorizing large-scale economic development takings.

On Monday, October 10, I will be speaking at the University of Mississippi School of Law on a Mississippi eminent domain reform referendum initiative, Measure 31 (which is on the ballot this November). The talk is sponsored by the University of Mississippi Federalist Society, and will begun at 12:30 PM in Room 2094.

Mississippi is one of only a handful of states that have not enacted any eminent domain reforms at all since the Supreme Court’s controversial 2005 decision in Kelo v. City of New London, which ruled that the Constitution allows government to forcibly transfer private property to other private entities for purposes of “economic development.” Forty-three other states have enacted new laws, though many of them are likely to be ineffective.

Mississippi has a considerable history of dubious takings. Republican Governor Haley Barbour is a prominent advocate of massive condemnations that transfer property to big business interests such as auto manufacturers. In 2009, he vetoed a legislative eminent domain reform billIn this article, I explained why the kinds of economic development takings Barbour supports generally create more economic harm than benefit.

Although Measure 31 is not perfect, it would be a major improvement over current Mississippi law, which allows a wide range of economic development takings for big development projects, and also defines “blight” so broadly that virtually any area can be declared blighted and condemned. The initiative precludes economic development takings almost entirely by forbidding the transfer of condemned property to private interests for at least 10 years after the taking. It does create an exemption to this rule for property that is unfit for human habitation or poses a “direct threat” to public health or safety. But that is much more restrictive than the state’s current blight law. Broad definitions of blight that license abusive takings are a serious problem in many other states, including New York.

I will have more to say about Measure 31 at my presentation, and probably in a follow-up post that I will write after the talk for readers interested in the issue who are unable to attend.

Reason TV has a short but interesting video about the urban renewal era of the 1950s and 60s, when hundreds of thousands of people – mostly poor minorities – were forcibly displaced from their homes by eminent domain. As the video notes, often the land was transferred to politically connected developers and other influential interest groups.

I discuss this period in greater detail in my recent testimony on the civil rights implications of eminent domain abuse before the US Commission on Civil Rights. As I point out there, today’s abuses are not on as large a scale as those of fifty years ago. But it is still common for “blight” condemnations to be used against the minority poor and other politically weak groups in order to transfer their land to politically powerful groups. And nowhere more so than in New York City, the focus of the Reason video. The recent Columbia University and Atlantic Yards cases are particularly egregious examples, which I described in this article.

Urban renewal and blight takings are also a good example of how, contrary to stereotype, protecting property rights often benefits the poor more than the wealthy. Indeed, government is far more likely to threaten the rights of the former, because they usually have less political influence with which to protect themselves.

On August 12, I testified at a US Commission on Civil Rights hearing on the “Civil Rights Implications of Eminent Domain Abuse.” The video of the oral testimony is available here. I have now made my more detailed written testimony available online here. Here is the Introduction, which includes a summary of the rest [footnotes omitted]:

I am grateful for the opportunity to address the important issue of the impact of eminent domain on racial and ethnic minorities. I would like to thank Chairman Castro, Vice Chair Thernstrom, and the other commissioners for their interest in this vital question. As President Barack Obama aptly put it, “[o]ur Constitution places the ownership of private property at the very heart of our system of liberty.” The protection of property rights was one of the main purposes for which the Constitution was originally adopted. Unfortunately, the Supreme Court has often relegated property rights to second class status, giving them far less protection than that accorded to other constitutional rights. And state and local governments have often violated those rights when it seemed politically advantageous to do so.

Americans of all racial and ethnic backgrounds have suffered from government violations of constitutional property rights. But minority groups have often been disproportionately victimized, sometimes out of racial prejudice and at other times because of their relative political weakness. Minorities are especially likely to be victimized by private to private condemnations that test the limits of the Public Use Clause of the Fifth Amendment, which requires that property can only be condemned for a “public use.” These include takings allegedly justified by the need to alleviate “blight” and promote “economic development.”

Part I of my testimony briefly surveys the constitutional law of eminent domain and public use. It documents the extent to which the Supreme Court has given condemning authorities a near-blank check to take property for whatever purposes they want.

Part II examines the impact of blight and economic development condemnations on minority groups. Both types of takings often victimize racial and ethnic minorities. Although such condemnations are defended on the grounds that they are needed to promote economic growth in poor communities, they often destroy far more wealth than they create. Economic development can be better promoted by other, less destructive means. African-Americans and Hispanics are targeted more often than other groups in large part because of their relative political weakness and comparatively high poverty rates. While, certainly, not all members of these groups are poor or politically weak, a disproportionately large number are.

Finally, in Part III I explain why the problem of abusive takings persists despite the wave of state reform laws adopted in response to the Supreme Court’s unpopular decision upholding economic development takings in Kelo v. City of New London. Many of the new laws actually impose little or no constraint on economic development takings. Even those that do impose meaningful restrictions usually still allow private-to-private condemnations in the types of “blighted” areas where many poor minorities live. Although post-Kelo reforms are a step in the right direction, much remains to be done before the property rights of poor minorities are anywhere close to fully protected.

UPDATE: Various commenters ask why this should be considered a “civil rights” issue and why it should matter whether there is a disproportionate impact on minorities. My answer is that property rights are in fact a major part of the “civil rights” that the framers and ratifiers of the Fourteenth Amendment sought to protect. And they particularly wanted to ensure their protection for African-Americans, whose property rights were at the time threatened by southern state governments. The disproportionate impact on minorities also matters because it is in part the result of past and (to a lesser extent) present racism, as is also the political weakness that makes it easier for even unbiased local governments to target the poor minority neighborhoods. It is not my view that the disproportionate impact on minorities is the only or even the most important aspect of this issue. But it’s certainly worth considering, and well within the mandate of the Commission on Civil Rights.

My new article, “Let There Be Blight: Blight Condemnations in New York after Goldstein and Kaur” is now available on SSRN. It critiques the New York Court of Appeals’ recent controversial blight takings decisions in the Atlantic Yards and Columbia University eminent domain cases. It was part of a Fordham Urban Law Journal symposium on Eminent Domain in New York. Here is the abstract:

The New York Court of Appeals’ two recent blight condemnation decisions are the most widely publicized and controversial property rights rulings since the Supreme Court decided Kelo v. City of New London. In Kaur v. New York State Urban Development Corp., and Goldstein v. New York State Urban Development Corp., the Court of Appeals set new lows in allowing extremely dubious “blight” condemnations. This Article argues that the New York Court of Appeals erred badly by allowing highly abusive blight condemnations and defining pretextual takings so narrowly as to essentially read the concept out of existence.

Part I briefly describes the background of the two cases. Goldstein arose as a result of an effort by influential developer Bruce Ratner to acquire land in Brooklyn for his Atlantic Yards development project, which includes a stadium for the New Jersey Nets basketball franchise and mostly market rate and high-income housing. Kaur resulted from Columbia University’s attempts to expand into the Manhattanville neighborhood of West Harlem. When some of the landowners refused to sell, Ratner and the University successfully lobbied the government to declare the land they sought to be blighted and use eminent domain to transfer it to them.

Part II addresses the issue of blight condemnation. Goldstein and Kaur both applied an extraordinarily broad definition of “blight” that included any area where there is “economic underdevelopment” or “stagnation.” In addition, the court opened the door for future abuses in three other, more novel, respects. First, it chose to uphold the condemnations despite evidence suggesting that the studies the government relied on to prove the presence of “blight” were deliberately rigged to produce a predetermined result. Second, it dismissed as unimportant the fact that the firm which conducted the blight studies had previously been on the payroll of the private parties that stood to benefit from the blight condemnations. Finally, the court refused to give any weight to extensive evidence indicating that Ratner and Columbia had themselves created or allowed to develop most of the “blight” used to justify the condemnations. The court’s approach opens the door to future abusive condemnations and violates the text and original meaning of the New York State Constitution.

Part III discusses Goldstein and Kaur’s treatment of the federal constitutional standard for “pretextual” takings. In Kelo and earlier decisions, federal courts made clear that “pretextual” takings remain unconstitutional despite the Supreme Court’s otherwise highly deferential posture on “public use.” Unfortunately, the Supreme Court has been extremely unclear as to what constitutes a pretextual taking. As a result, courts have taken widely differing approaches to the issue. Nevertheless, Kaur and Goldstein are outliers in this area, deferring to the government more than almost any other court that has addressed the question since Kelo. They virtually read the concept of pretext out of existence.

In a potentially important recent decision, Texas Rice Land Partners v. Denbury Green Pipeline the Texas Supreme Court has invalidated the use of eminent domain for a private pipeline to be owned by an oil company. Gideon Kanner has some good commentary on the decision here.

In Texas and many other states, public utilities and other “common carriers” have the power to use eminent domain to acquire land for their operations. In this case, however, Denbury, an oil company, sought to use eminent domain for a pipeline that would only transport carbon dioxide to and from its own facilities, without providing any service to the general public. In theory, the public would have the right to use the pipeline, but in practice no one but Denbury would have any reason to do so. The Texas Supreme Court quite rightly concluded that a “common carrier” taking must actually serve the general public, not just the carrier itself:

To qualify as a common carrier with the power of eminent domain, the pipeline must serve the public…. [E]xtending the power of eminent domain to the taking of property for a private use cannot survive constitutional scrutiny. The Denbury Green pipeline would not serve a public purpose if it were built and maintained only to transport gas belonging to Denbury from one Denbury site to another. As a constitutional matter, we can see no purpose other than a purely private one in such circumstances….

We accordingly hold that to qualify as a common carrier of CO2 under Chapter 111 [of Texas law], a reasonable probability must exist, at or before the time common-carrier status is challenged, that the pipeline will serve the public by transporting gas for customers who will either retain ownership of their gas or sell it to parties other than the carrier.

The case has been remanded for the trial court. In order to prevail there, Denbury would have to prove that its pipeline will transport carbon dioxide for the general public and not just its own use.

Some press commentary suggests that this decision will have a major impact on future pipeline takings in Texas. That may be so. But Texas eminent domain law contains several other loopholes that make it easy for private interest groups to get government to condemn property for their own benefit. As I discuss in this article and here, Texas’ post-Kelo eminent domain reform law includes a very broad definition of “blight” that enables almost any property to be declared blighted and transferred to private parties. Oil companies and others seeking to use eminent domain for private pipelines might be able to get the land they want by having it declared blighted. This might require greater political clout than the direct private exercise of eminent domain under Chapter 111. The oil company in question would have to lobby the local government or redevelopment agency. However, Texas oil companies certainly have plenty of political influence.

UPDATE: I have not been able to find a link to the decision online. It is, however, available on Westlaw and Lexis.

UPDATE #2: I have corrected some minor errors in the initial version of this post. Because I made the corrections within a few minutes of the original posting, I am not going to describe them in detail, since I don’t think there was any time for the mistakes to influence public discourse on the case.

Earlier today, I testified before the US Commission on Civil Rights at a hearing on the “Civil Rights Implications of Eminent Domain Abuse.” The other panelists were Georgetown law professor Peter Byrne, Hilary Shelton of the NAACP, and David Beito, a prominent historian and chair of the Alabama State Advisory Committee to the USSCR. A C-SPAN video of the event is available here.

I have previously written about the negative impact of blight and economic development takings on the minority poor here. I also discuss the issue in my recent article on “Federalism and Property Rights.”, where I point out that the political weakness of the minority poor who are the most common victims of eminent domain weakens the case for leaving property rights issues to the discretion of local political processes.

My recently published article “Federalism and Property Rights” is now available on SSRN. It’s part of the University of Chicago Legal Forum Symposium on Governance and Power. Here is the abstract:

Both the Supreme Court and leading legal scholars have often cited federalism as a reason to severely limit federal judicial enforcement of constitutional property rights. Defenders of the federalism rationale for judicial deference on property rights issues make two key arguments. One holds that abuses of property rights by state or local governments will be curbed by interjurisdictional competition, rendering judicial intervention unnecessary. The second is the superior knowledge and expertise of state and local governments relative to federal judges.

This article criticizes both claims. Part I explains why competitive federalism is unlikely to provide effective protection for property rights in land because property is an immobile asset. People who “vote with their feet” by leaving a jurisdiction cannot take their land with them. For this crucial reason, interjurisdictional competition will often fail to effectively protect property rights in land, though it may be more useful in the case of rights to mobile property.

Part II takes up the issue of diversity and expertise. While state and local governments may indeed have greater expertise than federal courts in assessing local conditions, federal judicial protection of property rights ultimately empowers not judges but property owners. It is the latter who will actually get to decide the uses of the land in question in cases where federal courts prevent state or local governments from condemning their property or restricting its use. Owners generally have greater knowledge of their land than local government officials do. Moreover, the local expertise rationale for judicial deference on property rights would, if applied consistently, justify judicial deference to state and local governments with respect to numerous other constitutional rights, including those protected by the First and Fourth Amendments.

Blogosphere mavens might be interested to learn that this is the first major article I wrote that was inspired by a blog post, specifically this exchange with NYU law professor Rick Hills (who is one of the “leading legal scholars” mentioned in the abstract). Although we continue to disagree on this issue, I’m grateful to Rick for the inspiration, and for his very helpful comments on the paper.

My article “The Judicial Reaction to Kelo” is now available on SSRN. It is the Introduction to the Albany Government Law Review Symposium on Eminent Domain in the United States, which includes contributions by several well-known eminent domain scholars including my colleague Steve Eagle, Amy Lavine, and David Schultz, among others.

Here is the abstract:

Kelo v. City of New London was one of the most controversial decisions in Supreme Court history, generating a massive political backlash that led 43 states to adopt eminent domain reform laws restricting economic development takings of the kind the Court ruled were constitutional. In addition to the better-known legislative reaction, Kelo was also followed by extensive additional property rights litigation in both federal and state courts. This is the first article to systematically analyze the judicial reaction to Kelo.

Part I briefly summarizes Kelo and its holding. Part II considers state court interpretations of their state constitutional public use clauses since Kelo. Most of these cases have repudiated Kelo, either banning economic development takings outright or significantly constraining them. Part III considers judicial interpretations of Kelo’s “pretext” standard. This is the one area where Kelo might potentially permit nontrivial public use constraints on condemnation. Kelo indicated that condemnations are unconstitutional if the officially stated rationale for the taking is a pretext “for the purpose of conferring a private benefit on a particular private party.” State and lower federal courts have not come to any consensus on what qualifies as a pretextual taking. Nevertheless, several decisions suggest that the pretext standard may have some bite.

Overall, state courts have taken a skeptical view of Kelo, often rejecting it as a guide to the interpretation of their state constitutions. This reaction continues the pre-Kelo trend of increasing judicial protection for property rights at the state level.

This article is a companion piece to my previous work assessing the much better-known political reaction to Kelo.

The Institute for Justice has won a victory in an important property rights case in National City California. The trial judge set aside the city’s “blight” designation of a massive area including almost 700 properties. Had the designation survived, it would have enabled the city to condemn any of these properties at will. Here is IJ’s statement on the case, and here is an article in which city officials seek to downplay the damage.

For reasons, I discussed in this post, the National City case is a particularly egregious example of the widespread phenomenon under which local governments use of dubious blight designations to condemn property and transfer it to politically influential developers and other interest groups. The City declared a vast area to be “blighted” on the basis of extremely dubious evidence, and then refused to even make the evidence available for public scrutiny.

The problem of blight condemnations is far from limited to California. In numerous states, broad definitions of “blight” have undermined post-Kelo eminent domain reforms supposedly intended to protect property owners against eminent domain abuse. If pretty much any area can be declared blighted and condemned, no one’s land is safe unless, of course, they have a lot of political clout.

The trial court ruling is only the first step in an ongoing legal battle. California courts are historically very deferential to blight condemnations, and it’s certainly possible that the trial court will be overruled, at least on some issues.

I may have more to say on this subject later. But for now, I must conclude, as my laptop battery is running low, while I wait for my connecting flight to Istanbul at the Vienna airport.

CONFLICT OF INTEREST WATCH: I have done pro bono work for the Institute for Justice on various other property rights cases. But I have not had any involvement with this one.

As part of his plan to address California’s fiscal crisis, liberal Democratic Governor Jerry Brown has proposed abolishing California’s 400 local “redevelopment agencies,” which would save the state some $1.7 billion per year, an important step towards closing the state’s $25 billion annual deficit. Unfortunately, his plan has so far been stymied by opposition from California Republicans, all but one of whom voted against it in the California Assembly. Under the California state constitution, passage of the bill requires a two thirds majority in the state Assembly, and Brown fell one vote short.

The GOP’s stance on this issue is extremely unfortunate, and at odds with the Party’s supposed devotion to free markets and property rights. As Steven Greenhut, an expert on California property rights issues points out in a recent Wall Street Journal op ed, the redevelopment agencies are notorious for their abuses of the power of eminent domain for the benefit of powerful private interest groups:

[I]n the last 60-some years, redevelopment agencies have become fiefdoms that run up enormous debt and abuse eminent domain by transferring private property to large developers promising to build tax-generating bonanzas. Today, there are 749 such projects. In the late 1950s, there were only nine. According to the state controller, redevelopment agencies consume about 12% of all state-wide property taxes—money that would otherwise go to critical public services….

Palm Desert’s redevelopment agency proposed to eliminate so-called blight by spending nearly $17 million on revamping a municipal golf club that remains one of the nation’s premier golfing locales.

In the 12 years I’ve spent reporting on this issue, I’ve seen an agency attempt to bulldoze an entire residential neighborhood and transfer the land to a theme-park developer. I’ve witnessed agencies declare eminent domain against churches—which pay few taxes—in order to sell the property at a deep discount to big-box stores that promise to keep city coffers flush. Working-class people and ethnic minorities often are the victims of this process since they often live in the vulnerable neighborhoods, and they have less muscle than big business developers.

The trouble is that blight is an amorphous concept, easily abused by government officials and redevelopment agencies. Once “blight” is found, the agency creates a project area and can then begins selling bonds (incurring debt) without a public vote. In 1995, one area of the city of Diamond Bar, where I lived, was declared blighted because there was chipped paint on some buildings….

While economic development and local control are crucial issues, it’s hard to understand why any Republican would believe that a regime of government planning and subsidy is the best way to achieve those goals. They should be standing up against the abuses of property rights and the fiscal irresponsibility inherent in the redevelopment process and championing market-based alternatives to urban improvement—even if it means defending a proposal from a Democratic governor they often disagree with.

As I have often pointed out in previously, dubious “blight” condemnations are one of the most serious threats to property rights in the United States today. They are especially likely to be used to victimize the poor, ethnic minorities, and the politically weak.
For these reasons, among others, Jerry Brown’s proposal should be supported not only because it will save the state money, but because it will protect vulnerable property owners against abusive takings. It’s also worth noting that these kinds of blight condemnations not only cause great harm to their victims, but also generally fail to produce the economic growth that supposedly justified them in the first place.

Overall, I have been skeptical about the prospects for “liberaltarianism,” the proposed political coalition between liberals and libertarians. On this issue, however, the two groups have an obvious common interest. The libertarian goal of protecting property rights overlaps here with several liberal objectives, including helping ethnic minorities and supporting one of the nation’s most prominent liberal governors.

Ilya Shapiro (no relation) has a good post detailing two important new eminent domain cases. Both are being contested by the Institute for Justice, the libertarian public interest law firm that litigated Kelo v. City of New London and many other important property rights cases.

The National City case from California is yet another egregious instance of the abusive use of “blight” takings: The City has declared a large area “blighted” on extremely dubious grounds in order to transfer the land to an influential developer who wants to build luxury condos there. It was described in greater detail in this 2007 Sports Illustrated article.

CONFLICT OF INTEREST WATCH: I have done pro bono work for IJ on a number of other property rights cases, though not these two.

This Friday, I will be speaking at an academic conference on eminent domain in New York at Fordham Law School, 140 W. 62nd Street. The event is sponsored by the Fordham Urban Law Journal. My panel will be at 10 AM, and I will be speaking about the New York Court of Appeals controversial recent blight condemnation decisions in the Atlantic Yards and Columbia cases.

The conference will also include presentations by many well-known property scholars, including Michael Heller, Lynne Sagalyn, Chris Serkin, and my colleague Steve Eagle.

This Wednesday, I will be giving two talks in Madison, Wisconsin. One, sponsored by the Federalist Society Lawyers Division, will be at a panel on the Obamacare individual mandate litigation. The other two panelists are Wisconsin Attorney General J.B. Van Hollen (Wisconsin recently became one of the 28 states challenging the mandate in court) and Democratic state representative Jon Richards, who will defend the constitutionality of the mandate. It will be held at 11:30 AM. Logistical details available here.

My second talk will be at 6 PM at the University of Wisconsin Law School, in the Lubar Commons, and is sponsored by the Law School student Federalist Society chapter. It will be about Kelo v. City of New London, post-Kelo eminent domain reform, and recent judicial decisions on takings, especially the two big New York Court of Appeals decisions (the Atlantic Yards and Columbia cases).

VC readers are more than welcome to come to either or both events!

Sadly, the Supreme Court has refused to hear the Columbia University blight takings case. This New York state supreme court decision was a particularly egregious instance of the abuse of “blight” condemnations to take property that was not blighted in any meaningful sense and transfer it to a powerful private interest group. I wrote an amicus brief on behalf of the Cato Institute, Institute for Justice, and the Becket Fund for Religious Liberty urging the Court to take the case. As we pointed out in the brief, the case represented a valuable opportunity for the Court to clear up the massive confusion in state and federal courts over the issue of what qualifies as an unconstitutional “pretextual taking” – a condemnation where the official rationale is a mere pretext for a scheme to benefit a private party. Even in Kelo v. City of New London, the Supreme Court emphasized that such pretextual takings are still forbidden by Public Use Clause of the Fifth Amendment. But it gave very little guidance on the question of what counts as “pretextual.”

I share Megan McArdle’s frustration about the Court’s refusal to take the case. But I do quarrel somewhat with her lament that “this is an issue that only fires up libertarians.” Among the amicus briefs urging the Court to take the case was this one, by liberal Democratic New York state Senator Bill Perkins, a prominent critic of eminent domain abuse in the state. The Becket Fund, one of my own clients in this case, is certainly not a libertarian organization. More broadly, among those strongly opposing the Kelo decision were such liberal groups and activists as the NAACP, the Southern Christian Leadership Conference, Ralph Nader, Howard Dean, and Representative Maxine Waters, as well as various conservatives. It is certainly true that libertarians have been the leaders in the campaign to protect property rights against eminent domain. But concern about the issue is hardly limited to us, and it is not too late to form a broad cross-ideological coalition to address it.

I recently wrote an amicus brief urging the Supreme Court to hear the Columbia University blight takings case, on behalf of the Institute for Justice (the public interest law firm that litigated Kelo v. City of New London, among many other important property rights cases), The Becket Fund for Religious Liberty, and the Cato Institute. The brief is available here. As I explained in this post, the New York Court of Appeals’ decision in the Columbia case is an extreme example of a very common problem: the use of dubious “blight” condemnations to transfer property from the politically weak to the locally powerful interest groups – in this case a major university.

The case also represents an important opportunity for the Court to address a major unresolved issue in eminent domain law. In Kelo, the majority ruled that “economic development” counts as a public use that justifies the use of eminent domain to transfer property to private parties. But the Court also noted that “pretextual” takings – condemnations where the official rationale is “a mere pretext…. when [the] actual purpose was to bestow a private benefit” – are unconstitutional. Unfortunately, the Court was extremely unclear about what qualifies as a pretextual taking. As we explain in Part I of the brief, lower federal courts and state supreme courts have been all over the map in trying to develop rules for what counts as a pretext. The New York Court of Appeals decision in the Columbia case is at an extreme end of a continuum, defining pretext so narrowly that it is almost impossible to imagine a successful pretext case. Other courts – including the supreme courts of Pennsylvania, Hawaii, Rhode Island, and the District of Columbia, and the federal Ninth Circuit – have defined pretext more broadly. But they disagree among themselves about what kind of evidence matters.

The Columbia case is particularly notable because it features all four of the factors that the Supreme Court and various lower courts have said might prove the presence of a pretextual taking: evidence of pretextual motive, benefits that flow primarily to a private party, an identifiable private interest that benefited from the taking whose identity was clear in advance, and the absence of a thorough and unbiased planning process. For details, see pp. 12-18 of the brief. For this reason, it’s a great opportunity for the Supreme Court to determine how important each factor is, and establish a clear rule for lower courts to follow.

Legal journalist Damon Root, who has written several articles about the case, has a good discussion of its connection to the pretext issue here (though he errs slightly in regarding Justice Kennedy’s concurring opinion in Kelo as binding, since Kennedy also joined the majority opinion; regardless Kennedy is certainly a key swing voter on property rights issues).

Ilya Shapiro (no relation), who helped out with the brief on behalf of Cato, has a post about it here.

UPDATE: The Pacific Legal Foundation has also filed a brief urging the Supreme Court to hear this case. It is available here.

Historian David Beito, chair of the Alabama Advisory Committee to the US Commission on Civil Rights, has an interesting post documenting the abuse of “blight” condemnations in Montgomery, Alabama:

“[E]minent domain through the back door” has become commonplace in Montgomery, the cradle of the modern civil rights movement. Under this system, Montgomery has demolished homes without the normal due process of conventional eminent domainand often gives little notice. The city alleges that these homes are “blighted” but, as the story on Jimmy McCall shows, at least some are in excellent repeir.

Typically, under eminent domain through the back door, the city of Montgomery bills the owner for the cost of demolition and he or she is left with an essentially worthless property. The victims are often low-income blacks, many of home live near or in Rosa Parks old neighborhood.

Beito and I described the broader implications of these kinds of takings in this 2008 op ed. Unfortunately, abusive blight takings are not confined to Alabama. They are a serious problem in many parts of the country. For example, New York’s highest court recently upheld two such condemnations in the Atlantic Yards and Columbia cases. Unlike many other states, Alabama has actually passed a fairly strong post-Kelo eminent domain reform law that defines blight relatively narrowly and forbids condemnations that transfer land to private owners for pure “economic development” purposes (see my analysis of that law and other states’ reforms this article). Unfortunately, sometimes the law on the books is one thing and enforcement is another.

In Kaur v. New York Urban Development Corporation, its recent decision upholding the condemnation of property for transfer to Columbia University, the New York Court of Appeals claimed that the use of eminent domain to transfer land to a private university is more defensible than its use to transfer land to commercial corporations, as in the Atlantic Yards case:

Unlike the [New Jersey] Nets basketball franchise [one of the key beneficiaries of the Atlantic Yards takings], Columbia University, though private, operates as a non-profit educational corporation. Thus, the concern that a private enterprise will be profiting through eminent domain is not present. Rather, the purpose of the Project is unquestionably to promote education and academic research while providing public benefits to the local community. Indeed, the advancement of higher education is the quintessential example of a “civic purpose”…. It is fundamental that education and the expansion of knowledge are pivotal government interests.

I think this line of argument is seriously flawed. I tried to explain why in one of my earliest posts on the Columbia University takings back in 2006:

…Columbia President Lee Bollinger and [others] defend the use of eminent domain to transfer property to universities on the ground that universities create “public benefits.” While universities do provide important benefits to society, this does not justify allowing them to condemn property.

Most of the benefits provided by universities are “private goods” that are fully captured by their students and faculty. For example, going to college greatly increases a student’s earning prospects, but that student will himself capture the benefits. Basic economics shows that there is no need for government subsidies for these kinds of private goods.

Universities do also provide some “public goods” – benefits to society that the university, its faculty, and its students cannot fully capture. Perhaps the most important is basic scientific research. Another might be educating underprivileged students, though this is less clearly a public good than basic research is, since most of the benefits are captured by the students themselves. However, both research and student tuition are already heavily subsidized by the government through a wide variety of programs… There is no reason to believe that they require the additional subsidy provided by the use of eminent domain. Even if additional public subsidy is warranted, the best way to provide it is to allocate additional funds earmarked for research or education, not allow universities to use eminent domain. Condemnation of property is rarely if ever actually useful for the purposes of advancing research or educating poor students. In general, research can be undertaken and students educated just as well on voluntarily purchased land. Education and research can be conducted in a wide variety of locations and thus are not vulnerable to the “holdout” problems usually cited as a justification for condemning property. Even if holdouts do become an issue, universities can and do use secret purchase and other market-based methods to get around them without resorting to eminent domain….

Obviously, students and faculty sometimes can benefit from acquiring land through condemnation. But the benefits in question (primarily esthetic and lifestyle-related) are not public goods that should be subsidized by the state. If universities wish to pursue these goals by acquiring additional land, they should do it by competing with other potential buyers in the real estate market.

Finally, a possible argument for allowing universities to use eminent domain is that they supposedly act only for the public interest. As President Bollinger puts it, “We are not a profit-making institution looking out for our own advantage… We are trying to do things that help the world more broadly.” Unfortunately, this claim is at best a half-truth. Universities do sometimes “help the world more broadly,” but their policies are also heavily influenced by the self-interest of faculty, administrators, and…. students. Anyone familiar with academic politics knows that self-interest plays a major role. The mere fact that a university is a nonprofit entity does not prove that it acts only out of altruism. Self-interested behavior by universities is often perfectly legitimate, but it does undercut claims that universities should be allowed to use eminent domain because they do not “look out for [their] own advantage” and only “do things that help the world more broadly.”

Given the Court of Appeals’ ultradeferential approach to blight condemnations, I have no doubt it would have reached the same result even if Columbia were a for-profit corporation. I just wanted to make the point that such judicial abdication does not become more defensible merely because the new owner of the condemned property is a university.

UPDATE: I have fixed what was previously an incorrect link to my 2006 post on this subject.

In today’s decision in Kaur v. New York State Urban Development Corp., The New York Court of Appeals (the state’s highest court) has upheld the condemnation of property in the Manhattanville area of New York City for transfer to Columbia University. This outcome is not surprising. In fact, I predicted it back in December. In the recent Atlantic Yards case, the Court of Appeals had already held that state and local officials could declare virtually any area “blighted” and thereby make it eligible for condemnation and transfer to favored private interest groups.

The problem of over-broad definitions of blight is hardly limited to New York. It is present in numerous other states too, including many that have enacted post-Kelo eminent domain reform laws. Nonetheless, the Atlantic Yards and Kaur cases set a new low in this field. Not only has the New York Court of Appeals applied an extraordinarily broad definition of blight, it has also endorsed blight designations based on studies that are probably rigged in favor of private interests who benefit from condemning the areas in question. Moreover, it has opened the door to condemnations based on the presence of “blight” created by the very people who will get to own the property after it is taken.

UPDATE: Tim Sandefur and the Inverse Condemnation blog have further comments on the decision.

UPDATE #2: Matt Festa of the Land Use Prof blog comments here:

I expected the standard Kelo-style deference to legislative and executive officials to determine what things are in the public benefit (although I thought the Court rather passively accepted the argument that Columbia = education (nonprofit!) and education = good = constitutionally sufficient public benefit). But I was still a little surprised at the extent to which the Court seems to bend over backwards to disclaim any competence at all to evaluate the sufficiency of a “blight” determination by the government (which also gets to decide to use eminent domain). That’s the rational basis test taken to its logical extreme.

Today is the fifth anniversary of Kelo v. City of New London, one of the most controversial decisions in Supreme Court history. In Kelo, a narrow 5-4 majority of the Court ruled that the condemnation of private property for transfer to other private individuals for purposes of promoting “economic development” was permitted by the Fifth Amendment, which allows government to condemn property only for a “public use.” Kelo was a flawed decision and it drew a massive political backlash. There are lesson to be learned from both.

I. The Shortcomings of Kelo.

In my view, Kelo was wrong both because it goes against the text and original meaning of the Constitution and because it embodies an unrealistic view of the political process. On the former point, this article by leading property rights historian Jim Ely does a good job of summarizing the relevant historical evidence. The Founders and early 18th and 19th century jurists disagreed among themselves about the exact meaning of “public use.” But there was widespread agreement that government lacked the power to condemn property owned by one private individuals and transfer it to another merely because the government claimed there might be some sort of public benefit.

Kelo was also mistaken because the majority justices wrongly assumed that the existence of a “plan” would minimize the likelihood that private interests would exploit the condemnation process to take from the politically weak. In reality, the political process makes it very easy for this to happen, as voters have great difficulty monitoring the quality of economic development takings. Moreover, the new owners of condemned property generally have no legal obligation to actually provide the economic benefits that supposedly justified the condemnation in the first place. This predictably results in condemnations that not treat property owners unjustly, but actually destroy more economic value than they create, as happened in the Kelo case itself. I develop these points in greater detail in this article.

More generally, it seems contradictory and self-defeating for courts to allow legislators to define “public use” as they see fit. The whole point of the Bill of Rights is to constrain government power. That objective is undercut if the scope of the rights to be protected is defined by the very government officials whose abuses are supposed to be constrained. It is a bit like appointing a committee of wolves to guard your chicken coop in a world where predation by wolves is the whole reason why you need guards in the first place. As Ely notes, “among all the guarantees of the Bill of Rights, only the public use limitation is singled out for heavy deference to legislatures.” Unfortunately, this is part of the Court’s more general policy of relegating constitutional property rights to second-class status.

II. The Post-Kelo Backlash.

Kelo generated a broader political backlash than any other Supreme Court decision in decades. As I explained in this article, over 80% of the public opposed the decision, and a record 43 states passed eminent domain reforms in the wake of Kelo. Many observers, including legal luminaries such as Richard Posner, argued that this backlash shows that judicial protection for property rights in this field is unneccessary.

Unfortunately, my work on post-Kelo reform also shows that the majority of the new laws provide little or no meaningful protection for property owners. In many cases, they ban Kelo-style takings for “economic development,” but allow the same types of condemnations to continue under the guise of combating “blight.” Blight, in turn, is defined so broadly that almost any area qualifies.

Several factors account for this result, including resistance by interest groups who benefit from unconstrained eminent domain power. In my view, a key problem is widespread voter ignorance that makes it difficult for most citizens to tell the difference between effective reforms and those are primarily for show. Given the overwhelming public opposition to economic development takings, I doubt that interest group lobbying could have prevented strong post-Kelo laws from being enacted if voters had been well-informed about the legislation in question.

The Institute for Justice, the libertarian public interest law firm that litigated Kelo, has a more optimistic take on the results of the backlash in its well-written report on the fifth anniversary of the case. Several of their points are valid. Thus, IJ points out that a number of state supreme courts have recently struck down Kelo-style takings under their state constitutions. This is true, though it’s hard to tell how much of this is the result of Kelo, and how much a continuation of a preexisting trend under which six state supreme courts ruled that way in the ten years before Kelo; with only two (including the Connecticut Supreme Court in Kelo itself) going the other way.

On the legislative reforms, there is perhaps less difference between my assessment and IJ’s than meets the eye. In this article (pp. 15-16), University of Illinois law professor Andrew Morriss has compared my evaluations of the state reforms with IJ’s and finds only three cases where there is a significant divergence (including one – Idaho – where I rated the reform law much more favorably than IJ did). I would perhaps add a couple more cases to this list that arose after Morriss’ paper was finished.

I also agree with IJ that a significant number of states (albeit, in my view, a minority) have passed strong reform laws and that we are today substantially better off than before Kelo. For example, I have long emphasized that reforms passed by referendum initiative tended to be quite strong. The main point of my analysis is to dispute claims that legislative reform is sufficient to address the problem, and take issue with various social science theories that predicted a much more effective backlash.

III. Lessons for the Future.

The Kelo experience offers several valuable lessons. First, there is the need to combine litigation and political action in any reform strategy. IJ and the broader property rights movement could not have been as effective if they had stuck to just one or the other. For example, most of the public would have remained unaware of the problem of eminent domain abuse if not for the media coverage generated by the Supreme Court case. Although preexisting Supreme Court precedent and eminent domain law in most states was even more hostile to property rights than the Kelo decision, the “rationally ignorant” general public was oblivious to this reality.

Second, the shortcomings of the Kelo backlash undercut the widely held belief that we don’t need judicial intervention to protect rights that are supported by majority public opinion. Although bolstered by such authorities as James Madison’s Federalist 10, this view has serious flaws that the Kelo experience highlights. A combination of political ignorance and interest group lobbying can easily lead to violations of rights that majorities value. It also makes it extremely difficult to correct those violations using the political process alone.

On a more positive note, the widespread political reaction to Kelo shows the potential for cross-ideological alliances on property rights issues. Kelo was denounced not only by conservatives and libertarians, but also by numerous left-liberal leaders and activist groups, such as Ralph Nader, Bill Clinton, Maxine Waters, the NAACP, and the Southern Christian Leadership Conference. They recognized that economic development and “blight” condemnations often target the poor and politically weak. It is unfortunate this potential alliance has been allowed to atrophy in recent years. Effective protection for property rights is unlikely to be achieved so long as the issue remains primarily a parochial concern of libertarians and conservatives.

Finally, I can’t resist pointing out that Kelo and the resulting backlash has been a great gift to takings scholars that just keeps on giving. For example, it enabled me to publish numerous articles, get offered various visiting appointments, and ultimately get tenure. I am currently writing a book on Kelo and its aftermath which is scheduled to be published by the Harvard University Press. And I owe it all to the justices in the Kelo majority.

As far as the public interest is concerned, I fervently hope that the the Supreme Court improves its takings jurisprudence. But when it comes to my own career interests, I hope the justices keep up the bad work!

CONFLICT OF INTEREST WATCH: As in previous posts on Kelo-related subjects, I want to note that I have written various pro bono briefs for the Institute for Justice. I also wrote a pro bono amicus brief in the Kelo case itself on behalf of the late Jane Jacobs.

In a recent post on Kaur v. Urban Development Corporation, the Columbia eminent domain case currently before New York’s state supreme court, NYU lawprof Rick Hills argues that the debate over eminent domain is largely meaningless. Kaur, like the Atlantic Yards case before it, addresses a key issue in takings law: whether the condemnation of “blighted” property for transfer to a private party qualifies as a “public use” under state and federal constitutions even if “blight” is defined so broadly that almost any area can be declared blighted and condemned.

Hills argues that efforts to address this question are ultimately futile and tend to elide the really important issues:

[T]he doctrinal battle… [in Kaur] really is rooted in empty, incoherent blather that can never be a satisfying basis for a doctrine. “Blight” is an epithet in search of a definition, while “public use” is either merely a requirement of public benefit (in which case, it is judicially unmanageable) or a requirement of public title (in which case, it is a perverse encouragement of statist inefficiency).

The concepts of “public use” and “blight” ignore the real and fundamental dilemma raised by over-fragmented land — viz.: (a) land markets tend to do a poor job of re-assembling over-fragmented parcels but (b) assemblers use eminent domain to hog all of the post-assembly surplus, to the justified resentment of the dispossessed owners. Absent some assembly mechanism beyond arms’ length private bargaining, Manhattanville will be locked into drab industrial uses — gas stations, storage facilities, auto repair, etc — that, I strongly suspect, the owners themselves would quickly jettison if they could get a reasonable share of the “post-assembly” value. Getting rid of eminent domain will not vindicate these owners’ private property rights: It will simply insure that they can remain trapped in a collective action problem

Hills’ argument is interesting. But I think it is ultimately wrong on all counts.

I. Why a Narrow Definition of Public Use Does not Lead to “Statist Inefficiency.”

If, as I have advocated, “public use” is interpreted to require either government ownership of condemned property or at least a right of access by the general public (as in the case of land used by common carriers or public utilities), it will reduce “statist inefficiency,” not aggravate it. Such an approach would block takings like those in the Kelo and Poletown cases, where property was taken from politically weak owners for transfer to politically powerful ones. In the process, far more economic value was destroyed than created. In Poletown, for example, some 4000 people were expelled from their homes and dozens of businesses, churches and schools were destroyed, in order to give the land to General Motors to build a factory, which ultimately failed to generate anything remotely approaching the economic benefits that were promised.

Hills’ argument implicitly assumes that if government is not allowed to condemn property and transfer it to private entities, it will simply undertake the exact same condemnations and use the land for the same purposes itself. This, however, is highly implausible. If the whole purpose of the condemnations was to transfer the land to politically powerful interest groups, that objective won’t be accomplished if the government can’t give them the land they covet. If Detroit were forbidden to transfer Poletown to General Motors, it is hardly likely that the city would have still condemned it and then built a government-owned auto factory on the site. Almost certainly, the condemnation would never have been undertaken in the first place.

To be sure, sometimes public ownership can be a mere fig-leaf for control by a private interest group. In my article on Poletown, I discuss the hypothetical possibility of the government retaining ownership of the area, but giving GM a long-term lease for a nominal fee. Effective enforcement of public use limits on takings requires judicial policing of such subterfuges.

II. The Case for a Narrow Definition of “Blight.”

Hills is right to suggest that “blight” is a vague term. Still, it is more than just an “epithet.” As I argue in this article, there is a strong case for using government intervention (though not necessarily condemnation) to eliminate blight defined as conditions on one property that inflict serious harm on the entire neighborhood, for example by spreading disease. If the effects are spread out over a large area, private parties face a collective action problem in trying to alleviate them.

On the other hand, there is no good justification for using eminent domain or other government coercion to alleviate “blight” defined merely as a lesser degree of development than government bureaucrats consider to be desirable. Market competition can generally do a good job of determining which land should be developed and to what extent. Indeed, defining “blight” so broadly that virtually any area can be declared blighted and condemned will actually undermine development by rendering property rights insecure, thereby deterring investment. Such blight condemnations merely enable politically powerful interest groups to take property that they covet from the politically weak.

Even in genuinely “blighted” areas, condemnation is extremely problematic, often leading to the expulsion of poor and minority populations to benefit more influential groups. But the case for government intervention in such areas is at least a plausible one.

III. Why Private Developers (Usually) Don’t Need Eminent Domain to Prevent Holdout Problems.

Hills also makes the standard argument that we need eminent domain to prevent holdouts from blocking valuable assembly projects. I have answered this claim at some length in this article (204-10). Interested readers should also check out this excellent article by Notre Dame property scholar Daniel Kelly. To briefly summarize, Kelly and I point out that private developers can effectively prevent holdouts by assembling property using secret purchases that prevent potential holdouts from learning that a major assembly project is ongoing. Therefore, they cannot use that knowledge to try to extract so large a share of the profit that the project becomes infeasible. This is how Disney assembled the land it needed for Disney World. Of particular relevance to the Columbia University case, it is also how Harvard University has routinely assembled property it needed in the Boston area. Secret assembly doesn’t perfectly solve all holdout problems. But it does work quite well.

Not only does secret assembly alleviate holdout problems, it is also superior to eminent domain because it sifts out those development projects that create more value than preexisting uses of the land in question from those that do not. By contrast, the use of eminent domain often leads to the transfer of land to uses that are actually less valuable than those of the original owners, as happened in both Kelo and Poletown. If the current owners genuinely value the land more than the would-be developer does, we should actually want the holdouts to succeed. This point is well addressed in Kelly’s article.

Finally, I think that Hills also errs in suggesting that the main problem with eminent domain is that current owners don’t get enough compensation for their losses. Owners are indeed often undercompensated. Yet even perfect compensation would not eliminate the danger that unconstrained eminent domain power leads to takings that actually destroy more economic value than they create. The problem is not so much that developers “hog all of the post-assembly surplus,” as we often end up with a post-assembly loss.

UPDATE: At another time, I will comment on Hills’ and Michael Heller’s important and innovative proposal to operate eminent domain through “land assembly districts” that would give greater protection for current property owners than traditional takings. My general view is that LADs would in many places be an improvement over the status quo, but still inferior to strict enforcement of “public use” constitutional limits on takings. I intend to discuss LADs in some detail in the book on Kelo and public use that I am currently writing.

The New York Court of Appeals (which, despite the misleading name, is New York’s state supreme court), held oral arguments yesterday in Kaur v. New York Urban Development Corporation, the case in which New York City is trying to condemn a large amount of property in the Manhattanville neighborhood in order to transfer it to Columbia University. The Columbia Spectator has an interesting summary of the oral argument here.

Columbia and the government’s Urban Development Corporation are claiming that the property can be taken because it is “blighted.” However, a lower court decision recently invalidated the takings because that the studies that supposedly prove the existence of blight are flawed and may have been deliberately cooked up to justify a bogus taking.

I have been very critical of both the Columbia takings specifically (see here for the most recent post and links to earlier ones), and the more general use of broad definitions of “blight” to justify condemnation of virtually any property that might be coveted by politically influential businesses and other interest groups.
At the same time, for reasons I discussed here, I am not optimistic that the Court of Appeals will uphold the lower court’s decision.

In the recent Atlantic Yards case, the court endorsed the constitutionality of condemnations under an extremely broad definition of “blight” that would allow the taking of any property that might be “underdeveloped.” I think the Atlantic Yards decision was badly misguided. Among other things, it grossly misinterpreted the blight provision New York’s state constitution, which only allows condemnation of “substandard an insanitary” areas. Nonetheless, it is difficult to distinguish the Atlantic Yards case from Kaur. However, the Spectator’s description of the oral argument suggests that the judges were tough on both sides, which may indicate that they have some skepticism about the government’s position.

The issue of broad definitions of “blight” is not limited to New York. It undermines protection for property rights in many other states as well. Since the Supreme Court’s controversial decision in Kelo v. City of New London, some 43 states have enacted laws banning or limiting the condemnation of private property for transfer to other private individuals in order to promote “economic development.” Unfortunately, as I explained at length in this article, most of these states’ laws define blight so broadly that virtually any area can still be designated as blighted and condemned. In other words, any property that government might want to take under an “economic development” rationale can instead be taken under a blight rationale.

UPDATE: NYU lawprof Rick Hills comments on the case and the more general questions it raises here. I disagree with several of Rick’s points and will try to address them in a later post, time permitting.