A New Jersey appellate court recently invalidated a "blight" condemnation in Long Branch, N.J. on the grounds that there wasn't enough evidence of genuine blight to meet the standards required by the New Jersey Constitution. The case is called City of Long Branch v. Anzalone; I have not been able to find a copy of the opinion online. But for readers with access to Westlaw, the cite is 2008 WL 3090052. [UPDATE: the opinion is available here; HT: VC reader Daniel Schmutter]

New Jersey is one of many states that has blight condemnation laws so broad that almost any property can be defined as "blighted" and then condemned. Last year, in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, the New Jersey Supreme Court invalidated a provision in New Jersey's blight law that allowed condemnation of any property that is "underutilized" or not fully productive. The Court ruled that New Jersey's state constitution (which gives local government the power to take "blighted areas") does not allow condemnations under a definition of "blight" this broad. Jonathan Adler and I discussed Gallenthin in this series of posts last year. Gallenthin requires that property not be condemned as "blighted" unless there is proof of "deterioration or stagnation that has a decadent effect on surrounding property." As I explained in this post , this is still a fairly lax standard; almost every neighborhood goes through periods when it is "stagnant" or "deteriorating." But at least it no longer simply gives local governments a blank check to condemn any property they want. Anzalone is perhaps the first major case applying Gallenthin. It ruled that Gallenthin and the New Jersey Constitution require that any area can only be declared "blighted" if there is "substantial evidence" of blight. And blight justifying eminent domain is only present if the poor condition of the area to be taken causes genuine harm to surrounding neighbhorhoods. A mere insufficiency of economic growth and developmentis not enough for a blight designation:

[The court's] reading of Gallenthin . . . requires a municipality to find that the physical condition of the properties at issue was contributing to social problems not only within the redevelopment area, but also in nearby areas. Even though redevelopment would be expected to result in higher property tax payments and more spending for local businesses, the difference between the actual level of economic activity in the redevelopment area and the level that might be achieved after its transformation does not by itself amount to blight. Eminent domain based solely on such a difference would instead amount to condemnation due to the area's perceived insufficiency of wealth, and it would exemplify the [NJ Supreme] Court's fear that most property would be continuously subject to forced redevelopment if the threshold requirement were nothing more than the possibility of a more profitable use of the land.

In Anzalone itself, the court found that the city had presented little evidence beyond "a a bland recitation of applicable statutory criteria and a declaration that those criteria are met," along with a poorly evidenced "expert" report. That was not considered enough to justify condemnation.

Like Gallenthin, Anzalone still gives broad leeway to local governments. It emphasizes that blight designations are considered "presumptively valid" and that proof of blight requires only that there be substantial evidence of "deterioration" or stagnation that might harm surrounding areas. A local government with skilled lawyers and staff can probably come up with such evidence for a wide range of neighborhoods. That might still happen even in this case, since the appellate court remanded the case to the trial judge to give the city an opportunity to provide additional evidence that the area really is blighted under the Gallenthin standard.

However, the two cases do tighten New Jersey's blight criteria relative to previous practice. In New Jersey, there are now at least some areas that cannot be declared blighted and condemned on that basis. So bad was preexisting law that this actually constitutes significant progress.

Unfortunately, as I explained in this article, most states still allow almost any property to be declared "blighted" and condemned. This is true even in the majority of those states that have passed new eminent domain reform laws since Kelo v. City of New London was decided in 2005 (see Part II of this article for details).

CONFLICT OF INTEREST WATCH: I have done a variety of pro bono work over the years for the Institute for Justice, the public interest law firm that represented the property owners.