Abuse of Power:
How the Government Misuses Eminent Domain
by Steven Greenhut
(Seven Locks Press, 311 pages, $17.95)
For more than two decades the Michigan Supreme Court’s decision in
Poletown Neighborhood Council v. Detroit allowed
governments in that state to take most any property they wanted to
transfer to most anyone they wanted for most any reason they
wanted. The U.S. Constitution’s “public use” restriction was
satisfied, the court ruled, even when Detroit seized an entire
ethnic neighborhood to hand over to General Motors for a new
factory.
Alas, this case was no anomaly. As Steven Greenhut, an editorial
writer for the Orange County Register, observes in his
timely new book, Abuse of Power: How the Government Misuses
Eminent Domain, “governments increasingly use eminent domain
to take property from one private owner in order to give it to
another private owner.” A small home owner or businessman then
“must surrender his home or business because a wealthy developer —
perhaps a big campaign contributor and mover and shaker in the
community, or an out-of-town corporation promising an expanded tax
base for the city — has bigger and better plans for it.”
The abuses are legion. But sometimes property owners —
“ordinary heroes,” Greenhut calls them — fight back and beat city
hall. Today they often do so with the aid of the Washington-based
Institute for Justice, which has made protection of property rights
one of its most important objectives.
So rank have been the outrages that in July the Michigan Supreme
Court expressly overruled its Poletown decision “in order
to vindicate our constitution, protect the people’s property rights
and preserve the legitimacy of the judicial branch as the
expositor, not creator, of fundamental law.” The new case,
Wayne County vs. Hathcock, barred use of eminent domain to
construct an industrial and office park. Michigan may no longer
seize private property for “economic development,” that is, to hand
to new private owners who might pay more in taxes.
Although the case has no formal legal force outside of Michigan,
it reflects a slow renaissance of judicial respect for property
rights. The Poletown decision was oft-cited by other
courts as they ruled that public officials could take land at their
pleasure. Wayne County will help shift legal currents in the other
direction.
Indeed, all legal eyes now fall on the U.S. Supreme Court, which
is considering a case involving the city of New London,
Connecticut. The Connecticut Supreme Court, relying upon the
reasoning of Poletown, upheld the plan by the New London
Development Corporation to take scores of modest riverfront homes
and businesses to build luxury houses, expensive office space, and
a hotel. “How come someone else can live here, and we can’t,” asks
Susette Kelo, one of the dispossessed landowners.
It’s a good question, and Steven Greenhut’s answer is that
someone else gets to live there when local officials decide to
engage in social engineering for fun and profit. Not always, of
course — sometimes eminent domain is used for traditional purposes
as road-building.
But increasingly government deploys eminent domain in an attempt
to create “high-valued,” meaning taxable, development. That goal
often supplements the desire to benefit local elites, usually with
the connivance of the usual civic boosters, including the media.
Greenhut dissects how journalists routinely fail to question even
the most obvious eminent domain abuses.
THE HEART OF GREENHUT’S book is a series of examples of
government’s routine misuse of power. There’s abundant bad news.
Public officials typically favor the wealthy and influential
because they are wealthy and influential. But Greenhut also found
good news: though property owners often lose, increasingly they are
fighting back and winning.
For instance, the city fathers of Garden Grove, a working class
community south of Los Angeles, decided to turn a tidy neighborhood
of 400 into a theme park. Explains Greenhut: “There was no
developer in mind, just an idea in the head of the city’s top
planners and bureaucrats. They were going to do what they had been
doing on a smaller scale across the city: play land developer by
condemning property, then trying to market the acquired tracts to
some big out-of-town development company.”
Officials attempted to deny the obvious, while treating the
neighborhood as blighted. No normal person would have thought that
but, writes Greenhut, “Blight, as advocates of redevelopment and
eminent domain often point out, is a legal term rather than a
descriptive term.”
Happily, homeowners organized effectively and forced the city to
back down. Garden Grove removed the neighborhood from its
“redevelopment” area, while proceeding with similar efforts
elsewhere.
Equally outrageous was the attempt by Cypress, another southern
California city, to seize Cottonwood Christian Center in order to
transfer the property to Costco. Churches don’t deliver much in the
way of property or sales taxes, a black mark in the view of city
councilmen dedicated to the old principle of tax, spend, and
elect.
In Cypress, writes Greenhut, “City officials did not dress up
what they were doing in legalistic language. They were brazen in
their goals. They ridiculed church members at public meetings. They
bragged about their ability to use eminent domain for whatever
reason they chose, and they made it clear that the government’s
desires should take precedence over the desires of ‘a narrow
special interest,’ which is how city officials repeatedly referred
to the church.”
The 4,500-member interdenominational congregation fought back,
aided by the Becket Fund, which specializes in defending religious
liberty. To its credit, the church rejected an offer by Cypress to
trade for the property next door — which the city would seize from
its owner through eminent domain. Eventually, Cypress, which lost a
preliminary court ruling, agreed to a voluntary land swap which
yielded the church more room for its new worship center.
Adverse publicity helped derail an abusive taking by Atlantic
City. Vera Coking, a widow, was unfortunate enough to live across
from Donald Trump’s casino. He asked the local redevelopment agency
to take her property for a limousine parking lot for high rollers.
With the help of the Institute of Justice, Coking won: the term
“blight” could be most accurately applied to Trump’s enterprise,
which has veered towards bankruptcy.
EMINENT DOMAIN WAS LONG thought to be justified for a genuine
“public use,” that is, something used by the public. That’s why the
framers of the Constitution included a limited power to take
property in the Fifth Amendment. Yet today the public use
requirement has almost disappeared, as officials, with judicial
approval, regularly take property from Peter to give to Paul. Only
if officials forget to invoke an alleged public interest could it
be stopped.
Although the courts have been more willing to enforce the
provision requiring payment of compensation, they too often have
allowed governments to take advantage of property owners. Moving
expenses, business goodwill, advantageous locations, as well as
real values often are lost or minimized when figuring
compensation.
The result would still be rank injustice even if the property
was taken for a real public purpose. Instead, more often than not
eminent domain is now used as a form of corporate welfare, intended
to enrich billionaire retailers like Costco and millionaire real
estate moguls like Donald Trump. Other favored beneficiaries are
owners of hotels, race tracks, and sports franchises. Its “legal
plunder,” Greenhut writes, just like the historical experience of
mercantilism, which featured “a powerful central state that worked
in concert with established, private interests.”
Greenhut’s worthy call to arms concludes with a practical primer
on how individuals, families, churches, and communities can fight
back. Most important is an aroused citizenry prepared to defend
their rights. “Ordinary heroes” helped create this nation more than
200 years ago. They helped preserve America through many difficult
trials in peace and war. They can help restore life to
constitutional provisions that were meant to protect all of us from
government misuse of its power of eminent domain.
