Thursday, December 29, 2005

Judges Define Public Use in Colorado

The most commonly known fact about the Kelo opinion is that it holds eminent domain may be used to acquire private property for public purposes like economic development, even if the title to property is being transferred, with just compensation, from one private individual to a different private individual. Not so well known is that the opinion also states although such uses are appropriate, state constitutions and local legislatures are the ultimate authority when it comes to defining what constitutes a public use. Since the New London Development Corporation was given the power to exercise eminent domain by the legislative, which was not in conflict with any other state law or the state constitution, the project was given the Supreme Court’s stamp of approval. The Court applied a test to define public use that holds what the legislative says is a public use is a pubic use.

I started to investigate what Colorado law had to say about the matter and discovered that the issue is addressed in Article II, Section 15 of the Colorado constitution:

. . . whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question, and determined as such without regard to any legislative assertion that the use is public.

In Colorado the task of defining public use is deferred to the judicial branch. This may pose a problem. Let’s say my property gets taken by government for a public use I think is better defined as a private use. What happens? We go to court and let a judge decide who’s correct. Let’s say the judge sides with me and the government appeals and wins. This goes on until we make our way to the Colorado Supreme Court. This is where the problem comes in. The Supreme Court says it’s not the place of the judicial to decide what constitutes a pubic use, but the Colorado constitution explicitly assigns this role to the judiciary. This means that when the Colorado Supreme Court rules in favor of me, the property owner, I better hope the Supreme Court doesn’t take the case on appeal since it will defer the matter to the legislature. And if the Colorado Supreme Court rules against me, that’s the end of the line for me and I better start packing my bags.

It seems to me the test the Supreme Court uses to determine the definition of public use fails to be meaningful for the citizens of Colorado who may be experiencing eminent domain abuse as they have no alternative to State Court. Perhaps this is one of many reasons an Amendment to the federal Constitution defining public use is needed.

Tuesday, December 20, 2005

It Comes Down to Philosophy

The following is Bruce Ackerman’s thesis in Private Property and the Constitution,

”In order to decide whether compensation law is basically sound or ripe for sweeping change it is necessary first to choose between two fundamentally different ways of thinking about law, each of which has roots in our present legal culture . . . [The] choice between the [different ways of thinking], it will develop, turns on questions that are generally thought to be philosophical rather than legal”

Ackerman’s book deals only with the just compensation portion of the Fifth Amendment, but I think his thesis can be applied not only to the rest of the Fifth Amendment, but probably to all debates about the law.

The takings clause of the Fifth Amendment reads,

“nor shall private property be taken for public use,without just compensation”

Let’s take the private property part first. For the average non-lawyer private property refers to something owned by an individual that can be used as the owner sees fit with restrictions limited to harming the person or property of someone else. This definition is derived from Locke’s conception that property ownership is a right of nature.

On the other hand, lawyers view private property as only a bundle of rights that allow people to use property only in particular ways. This view seems to come from Hobbes’ conception that man is too irresponsible to own property, so government must take and own all property and then grant rights to individuals to use it.

The answer to the question of what constitutes a taking hinges on which conception of property rights you side with. If you side with the average person, then you will be less inclined to favor regulatory takings. If you side with the lawyers, then you will see nothing wrong with them.

For what purpose private property can be taken comes down to philosophy on what constitutes a public use.

For an economist public use means providing a public good. A public good in economic terms is non-rival and non-excludable. This means that no matter how many people are consuming the good, they all get to consume the same amount. And even those who don’t pay for it still get to consume it. The only true public good I can think of is national defense.

The average person finds that schools, roads, community centers, and the likes constitute public use purposes. This comes from the belief that it is the role of government to provide such amenities. Such beliefs are rooted in socialism and have been reinforced by politicians since the New Deal.

The Court has found that public use means public purpose to include business development. I know the Court has called it economic development, but that is poor vocabulary use. This view is also rooted in socialism as it assumes that government can control the economy with better results than if people were allowed to act freely.

If you believe in the Invisible Hand then you’ll side with the economists. If you don’t, you’ll side with either the average person or the Court, depending on how great your doubts in the free market are.

The real question though is how to resolve these debates. Any ideas?

Monday, December 19, 2005

Eminent Domain for the Public Good?

From a Star Tribune editorial,

What bothers people is the use of eminent domain to benefit private development and the public tax base. But while that sounds alarming at first hearing, it's much ado about not very much. . . . Eminent domain is used sparingly in most states . . . . Its real value lies not in its execution but in its leverage. Just having the authority to condemn blighted land has been enough to help hundreds of cities reclaim abandoned industrial waterfronts, derelict warehouses and substandard residences for the greater good.

The role of government advocated here is inconsistent with the American system of political economy and disseminates a lie as it advocates threats to property in order to advance the greater good.

The advancement of the greater good is not a political or economic end the Founders of the United States sought to achieve. The Founders believed that individuals have rights that exist before the creation of government. Government does not grant rights to individuals, rather all individuals are born with natural rights. The most natural of rights is of course the right to property. What individuals do with their property is up to them, so long as they don't harm someone else along the way.

As it turns out, this right to property is the key to the creation and maintenance of an economically prosperous nation or community. It is when property rights are poorly defined and threatened that individuals fail to acquire wealth and prosperity because of the disincentive they face to produce. To promote any activity that threatens the right to property will do more harm than good because of the produced disincentive.

This doesn’t sound like the greater good to me. It sounds like a minority of individuals will benefit from eminent domain abuse while the majority is faced with the decision of how much to invest in property. With threats of eminent domain lingering over their heads investing in property to develop is taking a risk as it may be taken for someone else to develop instead.

Thursday, December 15, 2005

Happy Bill of Rights Day

The Cato Institute wishes readers a Happy Bill of Rights Day!

Bill of Rights Day is an official holiday signed into law by Franklin D. Roosevelt in 1941 to commemorate the 150th anniversary of the adoption of the first ten amendments of the Bill of Rights.

Is today really such a happy day though? The Bill of Rights was ratified in order to prevent government from over stepping its boundaries determined by the limited nature of government prescribed in the Constitution. In fact, several states would not ratify the Constitution without it; fearing government power might grow too strong thanks to the efforts of the Anti-federalists who opposed a strong central government and campaigned against ratification of the Constitution in favor of a confederation of largely independent states. After ratification they formed a political party to support states’ rights. They feared that a strong central government would be disconnected from the people it represents and tax too heavily and violate freedoms of the people because citizens would not be able to check the central government’s power.

Unfortunately it seems that even with the adoption of the Bill of Rights the fears of the Anti-federalists have been realized, especially with respect to eminent domain. Even with the Fifth Amendment restricting government’s taking of private property to public uses citizens all over the nation have found themselves in a battle to keep their property from being taken by government and given to someone else. Why? It’s just as the Anti-federalists feared, a strong central government will result in violations of individuals’ rights. Sadly, the most natural of rights, the right to property, is the right that has been most trampled on as a result of the judicial branch of the federal government’s disconnection with the people.

Thursday, December 01, 2005

Partnership for New York City Likes Government's Eminent Domain

"The head of the Partnership for New York City, a group representing the city’s business community, on Friday criticized a Congressional vote to curb eminent domain, a potential blow to businesses.

'We are alarmed,' said Kathryn Wylde, president and CEO of the Partnership, in testimony during a state Assembly hearing. “Without the power to condemn private sites to support economic development projects, New York and other older urban centers could not have kept pace with demands for upgraded infrastructure, modern office facilities and an expanded housing stock.'"
Okay, take land for new streets and roads. But, let individuals voluntarily choose whether they want to redevelop the land they own into new offices and new houses.

I wonder if the Partnership for New York City has any ties to state or local government?

Oakland Takings

Debra Saunders:
"On July 1, Oakland took possession of two properties that housed two viable businesses -- Revelli Tires and Autohouse, which provided the livelihoods of John Revelli and Tony Fung -- by eminent domain so that a private developer can build apartments in the redevelopment zone.

On Aug. 1, Oakland took possession of a parking lot about one block away -- on which owner Alex Hahn says he wants to build housing -- so that Sears can relocate its Auto Center on that lot.

If you had to re-read the above paragraph, it is because this story makes no sense. Oakland, you see, is using government's supreme power -- the ability to seize citizens' private property -- so that bureaucrats can trade years of sweat and dreams as if they were property cards for a Monopoly game board. Except Oakland pols view all properties as if they are inexpensive purple ones, Baltic and Mediterranean."
How does a person react to the obvious irony that local government is forcing a viable tire and automotive business to close because government is taking the land the business is built upon, only to replace it with another automotive business? Does it really make sense to see all of this as one developer suggests:
"One redeveloper noted that redevelopment is a wonderful tool where cities take from a few people and make life better for everyone."
There really is something wrong in all of this. Properties within cities redevelop all the time, and without government legitimated force. People buy and sell. People buy and build. Voluntary redevelopment is really hard to argue against. Justifying policies that use government to forcefully take land from others and that use government to forcefully take money from others to subsidize redevelopment of the taken parcels is a much more difficult thing to justify. I suspect it is actually something that honestly cannot be justified.