Bloomberg.com: U.S. Government Power to Take Property Backed by Top Court
(Bloomberg) -- Local governments have broad power to take over private property to make way for shopping malls, office parks and sports stadiums, the U.S. Supreme Court ruled.
The court said government agencies can constitutionally take property in the name of economic development -- and even transfer it to another private party -- as long as the landowners receive compensation. The 5-4 ruling today came in a case involving land near a Pfizer Inc. plant in New London, Connecticut.
Scott B, a friend of Pittsburgh, now working in DC, was quoted on the radio news today. He works with a nonprofit that fights against eminent domain.
I hate eminent domain. The excuse of economic development does not lessen this hate. Rather, this new court judgement makes policy makers more critical in the process. Overboard, power-hungry, do-good authoritarians are given more room to roam. Hence, eminent domain is sure to be more and more of an issue for many if not every election in the future.
I am one who says let the markets operate without heavy-handed governmental impacts. Buy the property. Do the development if you feel justified. But don't buy it with force.
Once property is able to be taken, then investors will slow their investments into property. Investments will go into other, more secure assets. Hence, the downward spiral of real property is sure to accelerate.
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Government Power to Take Property Backed by Top Court (Update2)
June 23 (Bloomberg) -- Local governments have broad power to take over private property to make way for shopping malls, office parks and sports stadiums, the U.S. Supreme Court ruled.
The court said government agencies can constitutionally take property in the name of economic development -- and even transfer it to another private party -- as long as the landowners receive compensation. The 5-4 ruling today came in a case involving land near a Pfizer Inc. plant in New London, Connecticut.
``Promoting economic development is a traditional and long accepted function of government,'' Justice John Paul Stevens wrote for the court in Washington. He said the justices ``decline to second-guess the city's considered judgments about the efficacy of its development plan.''
The ruling is a setback for property-rights advocates angered by what they said is an increasingly common practice, now used thousands of times a year.
``Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random,'' Justice Sandra Day O'Connor said in dissent. ``The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.''
Chief Justice William H. Rehnquist and Justices Antonin Scalia and Clarence Thomas joined O'Connor's dissenting opinion.
Public Use
The Institute for Justice, a Washington-based group representing seven property owners in the Connecticut case, had urged the high court to put new restrictions on government ``eminent domain'' power.
New London is seeking to raze a residential neighborhood to make room for a five-star hotel, luxury condominiums and office buildings near the Pfizer research facility. The city says it is trying to reverse decades of economic decline.
The case centered on the U.S. Constitution's takings clause, which requires government agencies to pay compensation when they take over private property ``for public use.'' The property owners argued that the public-use prong requires more than simply the possibility of economic revitalization.
The justices ruled in 1954 that government agencies can condemn blighted property as long as they compensate the owners. Thirty years later, the court said governments could take over property to break up an oligopoly on land ownership.
The latest question concerned bids to take over property that isn't blighted and doesn't involve an oligopoly.
Stevens said the New London plan ``unquestionably serves a public purpose.''
Pfizer Plant
New London's development plan, enacted in 2000, calls for the takeover of 115 homes and small businesses in the 90-acre Fort Trumbull neighborhood adjacent to the Pfizer facility. The city also set up a private entity, the New London Development Corporation, to manage the project.
The plan coincided with the decision by Pfizer, the world's largest drugmaker, to open a new research headquarters in New London. Pfizer isn't directly involved in the litigation, and its property wasn't at issue in the high court case.
A handful of property owners refused to sell their property and instead sued. The Connecticut Supreme Court, in a divided opinion, said the city and development corporation were acting legally.
The case is Kelo v. City of New London, 04-108.
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