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Jewish World Review June 26, 2002 /16 Tamuz, 5762

Amity Shlaes

Amity Shlaes
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The evolution of eminent domain is the story of the lasting power of Supreme Court decisions to alter the American cultural fabric | For generations, the descendants of Bahamian conch fishermen and their families have lived in Riviera Beach, Florida. They would like to stay there, in part because Riviera Beach is one of the few affordable waterfront towns remaining in the state. But in all probability, they will not be able to.

Over the winter, the city council approved the development of "Harbor Village" by commercial yachting, shipping and tourism companies. The project would involve razing about 1,000 homes.

The Riviera Beach families are not alone. Across the US, towns, cities and state governments are allowing businesses to acquire private property by stretching state and federal constitutions. It sounds like a tale of bigfoot capitalism. But it is really a tale of bigfoot government. It is also a reminder of how Supreme Court rulings can alter the fabric of social life over decades.

The nominal goal of projects such as Harbor Village is economic development. But while new stadiums or new malls may make political sense, not all of them generate the growth or social benefit they promise. Indeed, a similar development in Riviera Beach - albeit on a smaller scale - foundered earlier. And public sector greed is at work: municipalities hope their projects will bring revenue for their coffers.

The trend, being local, is hard to resist at a national level. But there has been one effort, known as the Castle Coalition, as in "My home is my castle" (, backed by the Institute for Justice, a libertarian legal group. Its allies include both individual property owners and Green parties in some states.

The story begins with the nation's founders, who feared "the despotic power" of either the British Crown or a new federal government to assail property rights. In the fifth amendment of the US constitution, they wrote: "nor shall private property be taken for public use, without just compensation". The states duly replicated the terminology in their constitutions.

The issue is the meaning of "public use". It used to be clear: military bases, highways and so on. But over the years, cities began expanding the notion of "public use" to include "a public purpose" and even "public benefit". Some used it to justify levelling poor neighbourhoods in order to build something better.

In this, they won crucial Supreme Court backing. In a 1954 case, Berman vs Parker, the court ruled that an urban renewal project involving the compulsory transfer of families' and landlords' property to developers in south-west Washington was allowable under the constitution because it represented slum clearance. This ruling led to many others by lower courts, making possible the widespread urban renewal programmes of the 1960s and 1970s.

Matters were made all the easier by the fact that many of the properties at issue were rentals. Slum landlords made easy targets. Indeed, the expropriation of landlords enjoyed wide political backing. This was the US version of Latin American land reform.

But the tower blocks that supplanted smaller-scale homes did not improve the quality of life. On the contrary, they soon became centres of crime more dangerous than anything that had preceded them. The shift prompted Jane Jacobs to write The Death and Life of Great American Cities, a 1960s eulogy for lost neighbourhoods. Today, any number of redevelopments and public housing projects - Chicago's South Side being a prime example- are now regarded as the cause of blight, rather than the cure. The tendency is now to help the poor become homeowners, because property is viewed as the key to social mobility.

Despite this, "public purpose" and "public benefit" legal actions continued unabated. Indeed, there was a further change. Rather than merely claiming blighted land for urban renewal projects, local governments began to claim all types of property on behalf of private businesses. The argument was that those businesses would be able to put the land to better economic use.

Sometimes "public benefit" condemnations are really about simple business competition. The saddest example of abuse was the city of Detroit's decision in the early 1980s to raze a working-class neighbourhood, Poletown, in order to allow General Motors to expand its manufacturing facility. Poletown was not a slum; it merely blocked an opportunity for Detroit to please GM.

Then there was the Archie family, which lived for generations on a 24-acre plot near Jackson, Mississippi, then was ordered off its property to make way for a Nissan plant. The Archies were offered compensation but, as Alonzo Archie noted, this was not the point: "You can buy a house but you cannot buy a home."

The Archies sued and the state and Nissan backed down. But such an outcome tends to be rare. In general, the cards are stacked in favour of governments and their corporate allies. "Who is for expropriation and redevelopment? All the leaders of the town," says Scott Bullock, a lawyer who works with the Castle Coalition and the Institute for Justice. Local politicians, businesses and even the press tend to cheerlead for redevelopment. What is more, small landowners can rarely afford strong legal representation if they want to fight developments.

Lately, some courts have shown some appreciation for the property rights side of the debate. Illinois's supreme court ruled recently that "revenue expansion alone does not justify" condemnation or expropriation. In the case the court was considering, a private racetrack was trying to boot out a neighbouring business in order to expand its car park.

But even now, local property owners tend to lose these legal fights. All too often, "our town" becomes "their town".

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JWR contributor Amity Shlaes is a columnist for Financial Times . Her latest book is The Greedy Hand: How Taxes Drive Americans Crazy and What to Do About It. Send your comments by clicking here.


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© 2001, Financial Times