Alternatives to Eminent Domain

2017 APA National Planning Conference

May 7, 2017 4:00 pm 1A06 #9109891

Presenters John M. Baker, Greene Espel PLLP,

Minneapolis MN Dana Berliner, Institute for Justice, Arlington

VA Frank Schnidman, former DeGrove Eminent

Scholar Chair in Growth Management and Development, Florida Atlantic University School of Urban & Regional Planning

Overview

Historical background on public use and purpose Kelo v. City of New London

and the response

The “public use” requirement is rooted not in the text, but in “natural rights” In the Fifth Amendment, “public use” is not

phrased as a requirement: “[N]or shall private property be taken for

public use, without just compensation. . . .” The “public use” language in the clause was

never debated, so there is virtually no legislative history reflecting its intent

The “public use” requirement is rooted not in the text, but in “natural rights” However, as early as 1789, when describing his

theory of “natural rights,” one Supreme Court justice said in dictum that certain powers (including taking property from A and giving it to B) cannot be presumed to have been given by the people to legislatures (Calder v. Bull) (opinion of Justice Samuel Chase)

The rise of “public use” as a Fifth Amendment requirement 1837: the concurrence of NY State Senator Tracy

says a taking must be for a “public use,” i.e. “for the purposes of the government as a political being . . .”

Some state courts allowed private mill companies to dam rivers for profit, so long as they compensated landowners inundated upstream A 19th Century form of economic development?

Fallbrook Irrigation Dist v. Bradley (1896) Supreme Court finds an irrigation ditch is a public use by

reference to its public purpose and public interest

Berman v. Parker (1954)

Southwest Washington DC, 1930s-40s

Berman v. Parker: the dwellings within the redevelopment area

64.3% of the dwellings were beyond repair . . . only 17.3% were satisfactory; 57.8% of the dwellings had outside toilets, 60.3% had no baths, 29.3% lacked electricity, 82.2% had no wash basins or laundry tubs,

83.8% lacked central heating.

Southwest Washington, 1930s-40s Some areas – like those pictured here, in the 700 block of 4th Ave. SW – were not themselves as blighted, but were also included within the area for condemnation and replacement

Berman v. Parker: DC’s plan “The entire area needed redesigning so

that a balanced, integrated plan could be developed for the region, including not only new homes but also schools, churches, parks, streets, and shopping centers. In this way it was hoped that the cycle of decay of the area could be controlled and the birth of future slums prevented."

Berman v. Parker: the Supreme Court’s unanimous holding (1954) “The role of the judiciary in determining whether [the

power of eminent domain] is being exercised for a public purpose is an extremely narrow one.”

“Once the object is within the authority of Congress, the right to realize it through eminent domain is clear.”

The result:

Initially, 15,000 people were displaced The new Southwest was the first part of DC to offer

high-quality housing without regard to race

Building on Berman Hawaii Housing Auth. v. Midkiff (1984)

(unanimous, written by Justice O’Connor) “”To be sure, the Court’s cases have repeatedly stated

that ‘one person’s property may not be taken for the benefit of another private person without a justifying public purpose, even though compensation be paid . . .

But where the exercise of the eminent domain power is rationally related to a conceivable public purpose, the Court has never held a compensable taking to be proscribed by the Public Use Clause.”

21 years later, in Kelo, Justice O’Connor dissented

The emergence of a libertarian revolt against private-to-private transfers Wall Street Journal articles from 1998-2004 A series of lawsuits brought by the Institute

for Justice during that period, some featuring particularly sympathetic property owners

An I for J “survey” of private-to-private uses and threats of the use of eminent domain

Kelo v. New London (2005)

A relatively ordinary set of facts An undisputedly distressed City An area where residential uses have been

nonconforming since the early 20th Century Just down the street: a sewer treatment plant

Plaintiffs’ property and structures were not public nuisances, but “parcelized” the area

A proposed taking pursuant to a “carefully formulated” economic development plan

The City’s goals extended beyond new jobs and increased tax revenue

The outcome By a 5-4 vote, the Supreme Court upholds

the Conn. Supreme Court’s finding of a public purpose

Justice Kennedy “join[s] the opinion of the court and adds “further observations.”

Justices O’Connor and Thomas write blistering dissents, joined by Chief Justice Rehnquist and Justice Scalia

The overlooked story: how Kelo narrowed the concept of public use The majority created one new way for property

owners to win – by demonstrating that the government’s justifications are simply pretexts for a real intention to benefit a single private party.

Justice Kennedy’s “observations” also suggest that he might switch sides where: “transfers are so suspicious, or the procedures employed are so prone to abuse, or the purported benefits are so trivial or implausible, That courts should assume an impermissible private

purpose.”

Alternatives to Eminent Domain

2017 APA National Planning Conference

Dana Berliner, Institute for Justice

44 states changed their laws

• 11 changed their constitutions • 40 enacted a broad range of statutory

changes

30 states tightened the definition of “public use” or “public purpose”

Alabama Alaska Arizona Colorado Georgia Idaho Illinois Indiana Iowa Kansas

Kentucky Louisiana Maine Michigan Minnesota Missouri Montana Nevada New Hampshire New Mexico

North Dakota Oregon Pennsylvania South Carolina South Dakota Tennessee Texas Virginia Wisconsin Wyoming

25 states changed their definitions of “blight”

Alabama Arizona California Colorado Florida Georgia Idaho Indiana Iowa

Kansas Louisiana Michigan Minnesota Missouri Montana New Hampshire New Mexico

North Carolina Ohio Pennsylvania South Carolina Texas Virginia West Virginia Wisconsin

9 states changed the burden of proof in eminent domain cases

Arizona Colorado Georgia

Ohio Virginia West Virginia

Michigan Montana Nevada

State high courts increased protections against takings for

private use

Hawaii Maryland Missouri New Jersey Ohio

Oklahoma Pennsylvania Rhode Island South Dakota Utah

In the aftermath of Kelo, a grand total of 47 states increased

protection against takings for private use.

Dana Berliner, Looking Back Ten Years After Kelo, The Yale Law

Journal Forum (2015)

Do these – they work

• Treat people as individuals with individual needs

• If someone objects, do not try to acquire property you do not absolutely need

• Develop without forced acquisition • Carrots not sticks Curt Pringle, Development Without Eminent Domain: Foundation of Freedom Inspires Urban Growth (2007), available at www.ij.org.

Do not do these – they are illegal

• Pretextual takings • Property ticketing or using nuisance laws

www.ij.org/case/charlestown-property-rights

Charlestown Pleasant Ridge Neighborhood Association v.

City of Charlestown, Indiana

And don’t do this either - Amortization It could get the city sued

www.ij.org/case/dallas-amortization

ASSEMBLING LAND BY

ASSEMBLING PEOPLE

AMERICAN PLANNING ASSOCIATION 2017 NATIONAL PLANNING CONFERENCE

ALTERNATIVES TO EMINENT DOMAIN BY FRANK SCHNIDMAN

OWNERSHIP POOLING OF INDIVIDUAL LOTS FOR REDEVELOPMENT

•OWNERSHIP POOLING IS AN ARRANGEMENT WHERE INDIVIDUAL PARCEL OWNERS FORM A PARTNERSHIP OR CORPORATION TO TAKE TITLE TO THEIR INDIVIDUAL PROPERTY. THEN THE ASSEMBLED SITE IS HANDLED AS A SINGLE PARCEL.

PRIVATE SECTOR INITIATIVES

•TRADITIONAL LAND ASSEMBLY

•OUTRIGHT PURCHASE

•PARTNERSHIP AGREEMENTS

PRIVATE SECTOR INITIATIVES

•POOLING

•PARTICIPANT INITIATED

•DEVELOPER INITIATED

•CONSULTANT ROLE

•KEY CONSIDERATIONS

FOREIGN EXPERIENCE: LAND READJUSTMENT

•LAND READJUSTMENT

•Essentially, Land Parcels are “Pooled” in a Land Readjustment District Among Affected Property Owners Who Retain Their Percentage Share of Ownership Rights Before and After Development While Land Within the Project is “Replotted” in Three (3) Ways:

LAND READJUSTMENT

•THE LARGEST PORTION IS ALLOCATED TO NEW PRIVATE BUILDING CONSTRUCTION

•ANOTHER IS “CONTRIBUTED” FOR LOCAL INFRASTRUCTURE AND FACILITIES REQUIRED BY THE INTENSIFICATION OF THE LAND USE, AND

•ANOTHER IS “RESERVED” AND SOLD TO DEFRAY CERTAIN PROJECT COSTS

FOREIGN EXAMPLES

•WEST GERMANY -- Land Regroupment

•NORWAY -- Land Consolidation

•JAPAN --KuKaku-Seiri

•SOUTH KOREA -- Land Readjustment

•TAIWAN -- Land Consolidation

•AUSTRALIA -- Land Pooling

•CANADA -- Land Replotting

•ETC.

UNITED STATES EXAMPLES •HISTORIC EXAMPLE

•Washington, DC

•NEIGHBORHOOD POOLING

•Atlanta, GA

•Arlington, VA

•COMMERCIAL POOLING

•Farmers’ Market, Dallas, TX

•Canal Place, Schenectady, NY

•NEGOTIATED REPLATTING

•Ormand Beach, Oxnard, CA

NEIGHBORHOOD POOLING

ATLANTA, GEORGIA

REPLATTING ARTICLE

Thirty Years Ago . . . . .

CONCLUSION

•BECAUSE OF THE KELO BACKLASH, SUBSTANTIAL INTEREST EXISTS IN FINDING WAYS TO IMPLEMENT LAND ASSMEBLY FOR REDEVELOPMENT PROJECTS WITHOUT THE USE OF EMINENT DOMAIN

•BENEFITS FROM LAND ASSEMBLY

•BY ASSEMBLING PEOPLE •ALLOWS LAND ALREADY COMMITTED TO DEVELOPMENT TO BE REPLATTED TO MEET MARKET DEMAND

•PROVIDES FOR RENEWAL AND REDEVELOPMENT OF BLIGHTED OR INAPPROPRIATELY USED AREAS

•ALLOWS FOR RECOGNITION OF ENVIRONMENTAL VALUES AS PART OF SITE REDESIGN

•LANDOWNERS BENEFIT FROM THE INCREASED VALUES CREATED FROM THE REPLATTING, AND

•LANDOWNERS HAVE VARIOUS OPTIONS FOR PARTICIPATION IN THE REDEVELOPMENT PROCESS OTHER THAN FORCED REMOVAL

• The Goal: • Create a Process Which Allows

Current Landowners to Pool Their Property Into a Single Entity, and Participate in the Redevelopment Process Rather Than Being “Removed.”

• THANK YOU FOR YOUR TIME AND ATTENTION!