Saturday, February 19, 2005

Is Your Home For Sale Without You Knowing It?

Liberty Magazine has an article, long but worth reading in full, about the abuses of eminent domain. Link.
Eminent domain — the government's power to force a person to sell real estate against his will, at a price the government deems "just compensation" — is one of the most extreme forms of government coercion, and today, among the most common. Used for centuries for building railroads, highways, and post offices, eminent domain is now a multi-billion dollar industry, and a classic example of rent-seeking run amok. Governments throughout America routinely seize property to transfer it to private companies to "create jobs" and increase the tax base in a community. In 1999, the city of Merriam, Kan., condemned a Toyota dealership to sell the land to the BMW dealership next door. That same year, Bremerton, Wash., condemned 22 homes to resell the land to private developers. In one especially notorious case, billionaire Donald Trump convinced the government of Atlantic City, N.J., to condemn the home of an elderly widow so that he could build a limousine parking lot. As attorney Jennifer Kruckeberg puts it, "Whether you know it or not, your house is for sale. Corporations, using cities as their personal real estate agents, are proposing the following assignment: 'Find me your most prominent location, get rid of what is on it, help me pay for it, and maybe you will be lucky enough to have me move to your city.' Such is the state of the current eminent domain power." (...)

The exploitation of eminent domain by such private interests is a relatively new phenomenon, and is explicitly prohibited by the U.S. Constitution, which holds that "private property" may be taken only "for public use." But a series of court decisions beginning in the first years of the 20th century, and culminating in the 1954 decision Berman v. Parker, eroded the "public use" limitation to such a degree that, as Richard Epstein once noted, some law professors have taken to replacing that clause with an ellipsis when writing out the text of the 5th Amendment. (...)

With the eminent domain power thus unmoored, the result was predictable to public choice theorists: the power to redistribute property fell into the hands, not of the most deserving, but of the most politically adept. As government became capable of transferring unlimited amounts of land between private parties, the business community began investing an ever-increasing amount in lobbying to persuade it to give the land to them. These companies portray the redistribution of land as a benefit to the community, in the form of job creation and increased funding for public services, as well as an eradication of "economic blight," a vague term attached to any neighborhood that is less than affluent but not an actual slum.

At least these power grabs include paying the property owners something for their land and homes. More notorious in many ways are the spreading abuses by local governments whereby they tell a property owner that he may not use the property for its intended purpose or, in some cases, for any purpose whatsoever, without compensation of any sort. If the community leaders want a park, they should buy the property and make it a park. To declare private property a park, or a bike path, or whatever for public use is to make a limited number of property owners bear the costs for the entire community, because the residents would not be willing to pay the taxes necessary for those "public uses." It is an extension of Senator Long's old ditty, "Don't tax you; don't tax me; tax that man behind the tree."


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