Archive | Property Rights

Proposed California Referendum Initiative Would Make it Even Easier to Declare Property “Blighted” and Condemn it

Timothy Sandefur of the Pacific Legal Foundation has a good post outlining the the dangers posed by a California ballot question drafted by local governments interested in expanding their already very broad power to condemn property:

[J]ust before Christmas, the law firm of Rutan & Tucker—the leading California law firm for cities that want to steal your land for redevelopment—filed a new ballot initiative [that]… would bring back redevelopment as the “Jobs and Education Development Initiative.” But what’s even more remarkable is how it would expand the power of eminent domain even further than California’s already extremely broad Redevelopment Law allows. Indeed, if this initiative were to pass, it would essentially declare the whole state of California “blighted….”

Quick background: to take property for redevelopment, a local redevelopment agency (typically the City Council) has to declare an area “blighted.” They don’t have to declare each structure to be blighted—they can condemn whole neighborhoods, including perfectly adequate property, if lots down the street or around the corner are “blighted.” And what is the definition of “blight”? The Redevelopment Law contains two lists of factors (“physical” and “economic”), and the officials have to declare that one item from each list is present. That’s all. And the factors are already very vague. My personal favorite is “conditions that prevent or substantially hinder the viable use or capacity of buildings or lots.” What does that mean? It means whatever the government says it means.

That’s the current law. It is already so bad that practically any property in the state can be declared blighted if local officials want to do it. What the new initiative would do is expand these two lists even more.

For example, it changes “conditions that prevent or substantially hinder the viable use or capacity of buildings or lots” to

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Christian Burset on William Baude on Federal Eminent Domain

Last year I published an article in the Yale Law Journal arguing that the Constitution did not give the federal government the power of eminent domain. The Necessary Proper Clause was originally understood not to implicitly grant “great” powers to the federal government, and I argue that eminent domain (at least over land) was best understood as an example of a great power. The Takings Clause, passed a few years later, was not understood to grant the federal government any new powers. And from the Founding until the Civil War, the federal government never exercised a direct power of eminent domain in the states, instead relying on states to take land for any federal project that needed it. (Ilya critiqued the article here.)

Now the California Law Review’s online supplement has published a substantial response to my piece by Christian Burset, a law and history student at Yale. My thoughts are below the fold. His piece begins:

This Response critiques Baude’s historical account. He is absolutely right that the “great powers” doctrine needs more sensitive historical treatment, and he has greatly advanced our understanding of that history by recovering the lost case against federal takings. But he takes his case too far in arguing that from the Founding to the Civil War, “the federal government was not understood to have the power to exercise eminent domain inside a state’s borders.”

More generally, Baude, like his scholarly predecessors, errs in searching for a single historical understanding of federal takings. Until the Supreme Court settled the issue in Kohl, there was no consensus on the matter. Debate emerged in the 1780s and quickly became entangled with broader questions of federal power, slavery, and states’ rights. Baude rightly argues that Kohl was the first case to declare definitively the federal government’s

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Can Ghosts Increase the Value of Your House?

Most students who take a property law class study the famous New York case of Stambovsky v. Ackley, where a New York court ruled that sellers of a house must disclose to potential buyers the fact that the house was reputedly haunted. The court concluded that the house was “haunted as a matter of law” and that the haunting qualifies as a latent defect, because it is a condition that might reduce the value of the house. Courts in some other states have ruled differently, holding that sellers only have a duty to reveal physical, structural, or legal defects, not poltergeists. However, as Josh Blackman notes (citing this Forbes article), one Pennsylvania seller recently noted the haunting in his house ad, with the result that he actually ended getting more interest than expected:

I went back and forth,” Gregory Leeson says when asked about listing his Dunmore, PA home as “slightly haunted” on real estate website Zillow. “I thought I might as well. I didn’t think it would generate this much interest.”

But since uploading his for sale by owner listing on Sunday, Leeson has received multiple offers and interest from buyers as well as ghost hunters across the country. The home has also ignited a growing discussion on Twitter, with many sharing their own haunted home stories:

Leeson’s somewhat tongue-in-cheek description of his home, which is listed for $144,000, begins by pointing out typical features — 4 bedrooms and 2.5 bathrooms — before delving into the property’s more unusual characteristics:

“Slightly haunted. Nothing serious though,” he writes in the listing. “The sounds of phantom footsteps. A strange knocking sound followed by a very quiet (hardly noticeable, even) scream.”

While some people might recoil at the prospect of living in a “haunted” house and others might not care, [...]

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Upcoming Federalist Society Faculty Conference Presentation on my Next Book – The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain

Next week, on Friday, January 3, between 5 and 6:15 PM, I will be doing a presentation on my next book, tentatively entitled The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain at the Federalist Society’s annual faculty conference. This will be a preview of the book, which will be the first book-length treatment by a legal scholar of Kelo v. City of New London – one of the most controversial decisions in the modern history of the Supreme Court, and the important constitutional property rights issues it raises. The book considers Kelo from the standpoint of both originalist and living constitution theory, and also has the most complete analysis to date of the enormous political reaction that Kelo generated. I have completed a first draft of the book, but will be making revisions over the coming months.

The Federalist Society conference will be held in parallel with the annual AALS conference nearby. I will be presenting as part of a panel focusing on works in progress. If you are coming to the AALS conference and are interested in constitutional theory, property rights issues, or eminent domain, I hope you will consider dropping by. Legal blogosphere mavens may be interested to know that Dan Markel of Prawfsblawg, a leading criminal law scholar, will be presenting a paper as part of the same panel.

UPDATE: In the initial version of this post, I accidentally forgot to include a link to the Fed Soc faculty conference’s website. I have now fixed that problem. [...]

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Property Rights on the Moon?

Space law scholar Glenn Reynolds (AKA Instapundit) has an interesting USA Today column on the potential development of property rights on the Moon:

On Saturday, a Chinese lunar probe made the first soft landing anyone’s made on the moon since 1976….

Though the landing was a big deal in China, most of the rest of the world responded with a yawn. Moon landing? Been there, done that.

But October Sky author Homer Hickam was more excited. He wondered on Twitter if China might want to make a territorial claim on the moon, noting that the area the lander is exploring may contain an abundance of Helium-3, a potentially valuable fusion energy fuel that is found only on the moon. According to former astronaut/geologist Harrison Schmitt, China “has made no secret” of its interest in Helium-3. Schmitt observes, “I would assume that this mission is both a geopolitical statement and a test of some hardware and software related to mining and processing of the lunar regolith….”

The 1967 Outer Space Treaty provides that “outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.” But that’s not much of a barrier.

First, the treaty only prohibits “national appropriation.” If a Chinese company, instead of the Chinese government, were to stake a claim, it wouldn’t apply. And, at any rate, China — which didn’t even join the treaty until 1983 — can, like any other nation, withdraw at any time. All that’s required under the treaty is to give a year’s notice.

So if the the Yutu rover finds something valuable, Chinese mining efforts, and possibly even territorial claims, might very well follow. And that would be a good thing.

What’s so good

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New London Mayor Advocates Devoting the Kelo Condemnation Site to a True “Public Use”

Eight years after the Supreme Court ruled in Kelo v. City of New London that private property can be taken and transferred to other private owners in order to promote “economic development” because such development qualifies as a “public use” under the Fifth Amendment, the Kelo condemnation site still lies empty. But New London Mayor Justin Finizio, who previously apologized for the original Kelo condemnations, has proposed devoting the property for a true public use:

The 2005 Supreme Court decision in New London v. Kelo [sic], in which the court by a 5-4 majority constitutionally validated the New London Development Corp.’s use of eminent domain to purchase and raze the homes of Fort Trumbull residents who refused to sell, remains a “black stain” on the city, said its mayor

NLDC wanted to clear the site to attract large corporate development and expand the city’s tax base. Its judicial triumpth proved a pyrrhic victory, the decision widely despised for interpreting “public use” to include the government taking the property of citizens to turn over to private developers. Count the New London mayor among the despisers. He characterized the Kelo decision as a “corruption of the constitutional interpretation of public use.”

Fort Trumbull has seen no new construction since the bulldozers departed the flattened neighborhood.

Mayor Finizio said he would like New London to symbolically overturn Kelo by undertaking a true “public use” of the seized private properties. He offered as an example a parking garage, under discussion recently as a means of meeting the parking demands generated by Electric Boat’s offices in the former Pfizer buildings, the one major project resulting from NLDC’s corporate development vision.

This would not be any municipal parking garage, but one with solar panels to power it, landscaping and design to fit it into

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Philadelphia Condemns Artist’s Studio to Build a Supermarket and Parking Lot

Nick Sibilla of the Institute for Justice has a good article on the City of Philadelphia’s dubious efforts to condemn a successful artist’s studio in order to transfer it to a new private owner that would build a supermarket and parking lot on the site. This scheme isn’t quite paving paradise to put up a parking lot. But it’s almost equally egregious:

James Dupree has been celebrated around the world for his art. But now he is being condemned by the city of Philadelphia—literally.

His art has been shown at many museums, including the Philadelphia Museum of Art, the Pennsylvania Academy of Fine Arts…

But the city of Philadelphia has other plans for his property. In November 2012, the Philadelphia Redevelopment Authority (PRA) was authorized to acquire 17 properties to build a supermarket in Mantua. According to the redevelopment plans, the PRA wants to bulldoze Dupree’s studio to make room for the privately-owned grocery store and its parking lot. No tenant has been identified yet, but the supermarket project has received $2.75 million in state subsidies….

Dupree estimates professionally moving his oeuvre would cost at least a quarter of a million dollars. So just relocating his vast collection actually costs more than what he originally paid for the building.

Transforming a broken-down garage and warehouse into a top-notch art studio was no easy feat. “When I purchased the property, it was basically condemnable,” he said. The roof leaked when it rained. The plumbing and electrical were “next to nil.”

“I invested everything I owned into this property…I was basically broke,” Dupree remarked. The property itself cost a little under $200,000. Installing new electrical and plumbing: $60,000. Fixing the roof was another $68,000. Thousands more were spent on renovations, furnishings and appliances.

But Dupree sensed the property at 3617-21 Haverford

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My Talks about “Great Powers” and Eminent Domain Next Week

Next week I’ll be giving two talks about my most recent article (and I think it’s my best!) — Rethinking the Federal Eminent Domain Power. Here’s Ilya’s JOTWELL post about the piece. (Even if you think you don’t care about the federal eminent domain power, I promise it’s far more interesting than that, since it’s really also about federal enumerated powers more generally, including original understanding of the First Amendment, federal courts questions like commandeering and sovereign immunity, and the Chief Justice’s opinion in NFIB v. Sebelius.)

The first talk will be Monday, November 4th, at 3:00 pm at the University of Illinois Law School, courtesy of Professor Kurt Lash’s constitutional law colloquium.

The second talk will be Thursday, November 7th, at 12:00 pm at Yale Law School, courtesy of the Yale Law School Federalist Society’s Young Scholars Series. I believe it will be in Room 122. [...]

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A Poor Rationale for Banning Organ Markets

At National Review, Wesley Smith has a post criticizing a Canadian proposal to pay kidney donors. He supports banning such payments because they would “exploit” the poor:

The drive to turn living human bodies of the poor and destitute into natural resources for the well off continues….

If organs can be purchased like a steak at a butcher shop, only the desperate poor will sell (and perhaps, unemployed college grads with a lot of student debt). It’s that simple–and exploitive.

It’s far from clear that only “the desperate poor” would sell kidneys in a legal organ market. But even if this assumption is correct, it is not clear why the poor would be better off if denied the right to sell kidneys in this way. Presumably, those poor people who would sell their kidneys value the money more than having a second kidney. Given that living with one kidney creates very little added health risk, this is an entirely rational and understandable choice. Denying the poor this option makes them worse off, not better.

If we must ban kidney markets because allowing poor people to take the risk of living with only one kidney is “exploitive,” why should we not also ban poor people from taking dangerous jobs as loggers, coal miners, police officers, firefighters, and NFL players? These and other occupations involve far greater health risks than donating a kidney. And they are often especially attractive to “the desperate poor,” precisely because poor people are more likely to be willing to take risks in order to increase their wealth than the relatively affluent. Furthermore, if “exploitation” of the poor is really the reason for banning organ sales, why not ban such sales by people below a certain income threshold, but permit them if the sellers are [...]

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NSFWCorp Article on Eminent Domain Relies on Inaccurate Name-Calling Instead of Argument

The NSFWCorp website has published an article by Yasha Levine (subscription required) attacking me and other libertarian critics of the City of Richmond’s plan to use eminent domain to condemn mortgages. Unfortunately, Levine doesn’t actually answer any of the arguments against the plan advanced by libertarian critics. Instead, he devotes his entire article to claiming that libertarian critiques of eminent domain can be dismissed because Koch Industries contributes money to various libertarian organizations, the Kochs benefit from the use of eminent domain for oil pipelines, and libertarians (presumably in order to protect the Kochs’ interests) do not criticize oil pipeline takings.

If Levine had actually bothered to research this issue, he might have learned that I in fact have criticized oil pipeline takings (see here and here). So has the Cato Institute (another target of Levine’s attacks), which published an article by legal scholar Alexandra Klass urging the imposition of tighter constraints on such condemnations in 2008 [I had accidentally typed 2011 here earlier]. In this more recent law journal article, Klass discusses how eminent domain reform laws championed by libertarians (among others) have recently been used as the basis for lawsuits seeking to constraint pipeline takings.

Levine also ignores the reality that there are important constitutional and policy distinctions between pure private-to-private takings and those that transfer condemned property to public utilities or common carriers (the latter include some, but not all, oil pipelines), which are required to serve the public by law. These differences are well known to eminent domain experts; I discuss some of them in this article. It is not necessarily inconsistent to oppose takings that transfer property to, say real estate developers and auto manufacturers, while supporting at least some takings for public utilities and common carriers (though I believe the [...]

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Federal Judge Dismisses Lawsuit Challenging Richmond, CA’s Plan to Condemn Underwater Mortgages, on Procedural Grounds

Federal District Judge Charles Breyer recently dismissed a lawsuit by mortgage lenders challenging the constitutionality of the City of Richmond’s plan to condemn over 600 underwater mortgages, while paying compensation far below market level. Judge Breyer dismissed the case on procedural grounds, because it is not yet “ripe” due to the fact that the city has not yet made a “final” decision to go ahead with the condemnations. Needless to say, this is mostly likely not going to be the end of the legal battle over this plan. When and if the City actually does move forward with the condemnations, the issue will indeed be ripe for adjudication and the holders of the mortgages will be able to attack the various constitutional defects in the plan. I discussed some of them in this USA Today op ed. See also this article by Richard Epstein, which covers a wider range of issues than I did. However, I am far less optimistic than Epstein that the plan will be invalidated on “public use” grounds, so long as Kelo v. City of New London remains in force. I do, however, believe that there is a very strong argument that the plan is unconstitutional under current precedent, because the compensation the city proposes to pay is far below fair market value. [...]

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My New Article on the Supreme Court’s Important Recent Takings Clause Decisions

My new Cato Supreme Court Review article on the Supreme Court’s major recent Takings Clause decisions is now available on SSRN. Here is the abstract [But see important update on technical issues with the PDF below.]:

Property rights protected by the Fifth Amendment’s Takings Clause have long been “relegated to the status of a poor relation” in Supreme Court jurisprudence. Over the last 25 to 30 years, however, Takings Clause issues have been more seriously contested in the Court than previously, and property rights have had a modest revival. During the 2012–2013 Supreme Court term, property rights advocates won notable victories in Arkansas Game & Fish Commission v. United States and Koontz v. St. Johns River Water Management District.

This article considers the significance of Arkansas Game & Fish and Koontz, arguing that both cases are potentially important victories for property rights, and that the Court decided both correctly. But because both rulings also left some key issues unresolved, their full impact may not be evident for some time to come.

In Part I, I discuss Arkansas Game & Fish, the less controversial of the two cases. The Court’s unanimous decision makes clear that when the government repeatedly and deliberately floods property owners’ land, it is possible that the resulting damage qualifies as a taking for which “just compensation” must be paid under the Fifth Amendment. The Court’s unanimity is a rebuke to the extreme position taken by the federal government in the case. But it also leaves a number of crucial issues for later resolution.

Part II considers Koontz, which ruled that there can potentially be a taking in a situation where a landowner was refused a permit to develop his land by a government agency, unless he agreed to, among other things, pay

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New Jersey Adopts Dubious Post-Kelo Eminent Domain “Reform” Law that is Likely to Endanger Property Rights More than it Protects Them

New Jersey recently became the 45th state to adopt an eminent domain reform law in the aftermath of the Supreme Court’s controversial 2005 decision in Kelo v. City of New London, which ruled that it was constitutionally permissible for government to condemn private property and give it to another private owner in order to promote “economic development.” Unfortunately, as John Ross of Reason explains, the new law does not actually impose any meaningful constraints on the use of eminent domain, and may even actually promote abusive “blight” condemnations:

The law purports to do two things: first, codify a 2007 New Jersey Supreme Court ruling favorable to property owners and, second, decouple eminent domain from redevelopment subsidies. It fails miserably at both.

When local officials declare that an area is blighted and “in need of redevelopment,” the designation both allows them to offer economic development incentives and authorizes the use of eminent domain. But sometimes officials honestly don’t want to seize anyone’s property; they just want the ability to offer subsidies to developers.

But officials cannot credibly promise not to condemn property once it has been declared blighted. Officials can change their minds. And the next city council isn’t bound by past promises….

Decoupling the incentives from condemnation would remove the threat. And the law appears to do just that, allowing for the creation of “non-condemnation redevelopment areas.” But the law lets officials transform a non-condemnation area into a condemnation area if property owners refuse to sell….

The law also muddies the issue of blight.

In Gallenthin v. Paulsboro, the New Jersey Supreme Court held that before cities can seize property for private development, officials must show “substantial evidence” the property is blighted.

Prior to Gallenthin, municipal officials could claim a variety of vague, subjective conditions like

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Upcoming Talk on Property Rights at Cato Constitution Day

Next Tuesday, Sept. 17, from 1 PM to 2:15, co-blogger Ken Anderson and I will be taking part in a panel at the Cato Institute’s annual Constitution Day symposium, which will cover the major decisions of the Supreme Court’s 2012-13 term.

My talk will focus on the Court’s important property rights decisions in Koontz v. St. John’s River Water Management District and Arkansas Game and Fish Commission v. United States. I will also briefly cover this case. Ken will cover the Court’s major recent international human rights law decision, Kiobel v. Royal Dutch Shell Petroleum.

Cato Constitution Day will also have panels covering other major recent Supreme Court decisions, including the affirmative action and gay marriage cases.

Free registration for the event is available here. [...]

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How a “Free” Program Could Cost Over $500 Million

The National Law Journal has an interesting report on the rising costs of the federal “Rails-to-Trails” program.  What seemed like a neat way to create hiking and biking trails has spawned substantial amounts of litigation by landowners who assert the federal government cannot convert abandoned railroad easements to other uses without paying compensation.  According to the story, the Congressional Budget Office predicted the program would not cost anything.  Yet as NLJ reports, the federal government has shelled out $49 million to compensate aggrieved landowners in the past year alone, and some predict total liabilities will top $500 million. [...]

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