Thursday, June 30, 2005
Sama on Kelo, Disney, and Boston’s West End Tragedy
Rob Sama has one of the best Kelo reaction posts I have seen: Remember The West End.
For some reason I was unaware or forgot the whole West End debacle. It’s Scollay Square and the Government Center disaster that always got the press and was talked about in my family. Yet another example of unconstitutional yet court-approved takings. Or to put it another way, blight my ass. It doesn’t matter whether your name is Moses, Rappaport, or Pfizer; the Constitution means what it says and no number of black-robed oligarchs dancing with words can change that.
I am aware of the manner in which Disney approached property acquisition for Disney World, doing it the right way, the way it should be. Trying to avoid the holdouts is always a problem, but it still comes down to the market and whether your value of the property for the intended use matches the current owner’s value perception. And these things are perceptions, not objective facts one can pull out of the ether and grandly pronounce. I’m going to quote some of the meat of Rob’s post:
The issue in Kelo is not whether or not developers could have undertaken such a large-scale project in New London, but whether or not they could afford to do it at market prices. Evidently, they either couldn’t or felt that it would be cheaper to use government fiat instead. But the idea that the development couldn’t otherwise happen is rubbish. If you want proof, I can point you to a San Francisco sized theme park in central Florida.
Consider also, the fact that in an eminent domain taking, the opportunity for competitive bidding is eliminated from the assessment consideration. Imagine for a moment that the developers in New London decided to go the Disney route instead of the eminent domain route. They could have bought up land over time, and developed it as they saw fit when they had acquired enough. But perhaps that timeline is too long for these developers, so instead they make a public offer to all the residents of the area for their homes. They announce that they’ll pay an X% premium over the current market value, contingent on everyone selling, and perhaps with a deadline on the offer. That would enable the residents to band together, and to collectively bargain with the developers. They could solicit competing bids from alternate developers with different visions of what should be built there. And in the end, they would have the opportunity to determine a real market value for the land.
It is impossible, however, for a government to determine what that real value would be without letting market forces do their thing. That’s why this is a real violation of the eminent domain clause of the constitution. Because when transferring private property from one private owner to another private owner, it is impossible to determine what the real market value of the land would be. And therefore, determining just compensation becomes impossible.
That’s what it’s all about: what is just compensation?
When the usage is public and will remove the property from the market for the forseeable future, as in the case of roads, the market value of the property will become null, and there’s justification to using available market data (similar properties in the area, etc.) to determine a value to pay the final private owner, add a modest premium, and call it a deal. When the usage is private, paying the current owner less than the highest paying prospective next owner would be willing to pay is indeed government sponsored theft.
I like the creative option Rob suggested of making a conditional tender offer to a group of property owners. That makes sense, keeping politics out and thwarting extreme holdouts.
Returning to Boston’s West End, Rob linked to this series of pictures, of which the below two show starkly the sheer scale of the theft of the West End property:
Before
After demolition
“Blighted” is not a valid reason to take property for another private, or even a gratuitous public, purpose. One man’s blighted is another man’s castle, which is the topic of another post I have been planning. What we’ve had has been bad. Kelo just made it worse and more open. Yet the awareness it’s generated might have set us on the way to reducing the abuse of eminent domain. We can hope.
Kelo-related posts:
Will The Supremes And Bad Lawyering Perpetrate A Constitutional Travesty?
United States Constitution, 1788 - 2005: Promise Unkept
Bad Precedent
Additional Kelo Fallout Thoughts
Will the Money Be Followed?
Kelo and Raich: The Root of the Supreme Court Problem?
Olek V. New London Case
Kelo and "Fair" Value
Boycotting Can Be Hard
Becker and Posner on Kelo and Eminent Domain
Kelo, IOLTA and Drugs - Oh My
Sama on Kelo, Disney, and Boston's West End Tragedy
Was Kelo The Lost Battle That Won The War?
You Thought The Kelo Outcome Couldn't Be Worse?
Update:
Added to today’s Beltway Traffic Jam