To property owners, help is on the way

Thousands of Minnesota properties now are threatened with private commercial development.

Caving in to tax-hungry city officials and land developers, the U.S. Supreme Court last June gave City Hall the OK to condemn your home if private builders target your land for a new, tax-generating office complex. To block this raid on property rights, Minnesota’s elected officials at the Capitol have been busy reinforcing property safeguards.

The federal ruling: The Supreme Court’s 5 to 4 decision in Kelo v. City of New London, Conn., clears the way for 15 nonblighted homes in a waterfront neighborhood to be torn down and replaced with a luxury hotel, upscale condos and office buildings. The U.S. Constitution, of course, still specifically states private property can be condemned by the government only for a “public use.”

Justices Sandra Day O’Connor, William Rehnquist, Antonin Scalia and Clarence Thomas in a dissenting opinion said, “Today the Court abandons a long held, basic limitation on governmental power Ö Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory. Ö The government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result.”

State responses: Since the Supreme Court’s ruling, Minnesota legislators have proposed several property condemnation reform bills. Eminent domain, reads one bill, must not be used to acquire real property that is then transferred to a person or nongovernmental entity. How much extra property owner protection will emerge from these bills for Minnesota citizens remains to be seen.

In addition, a group called Minnesotans for Eminent Domain Reform is promoting new property condemnation laws. According to state Sen. Sheila Kiscaden DFL-Rochester, “Unless the Legislature passes real eminent domain reform, including tightening up the definition of blight, municipalities will continue to be able to do economic development under the guise of blight removal.”

Minnesota is not alone. At least 40 other states have reacted with their own counterblasts. Alabama was the first state to strengthen property owner protection after the Kelo decision when state lawmakers passed, and Gov. Bob Riley signed into law Aug. 3, a bill that reads, “A municipality or county may not condemn property for the purposes of private retail, office, commercial, industrial or residential development; or primarily for enhancement of tax revenue Ö “

In November Ohio’s governor signed into law an eminent domain moratorium lasting until Dec. 31, 2006. Also in late 2005, Michigan’s Legislature passed a proposed constitutional amendment that prohibits “the taking of private property for transfer to a private entity for the purpose of economic development or enhanced tax revenues.” The state’s voters will accept or reject this amendment in November.

And on Feb. 3, Georgia’s Senate passed, on a 50-0 vote, a 120-day moratorium on all condemnations for private development. The bill specifically cites the need to protect Georgia property owners against the Supreme Court’s decision.

Even the U.S. Congress is firing back. On a 376-38 vote, the House passed the “Private Property Rights Protection Act of 2005,” denying federal economic development funds to local governments that use eminent domain for private development.

Why the rush? The Institute for Justice, a Washington-based civil liberties organization, reports that, “In the first two months after the Supreme Court decision, more than 30 municipalities began condemnation proceedings for private development or took actions to authorize them in the near future. Thousands of properties are now threatened with eminent domain for private commercial development and those numbers will continue to swell unless state legislatures and the U.S. Congress listen to their constituents and end the abuse of eminent domain.”

Where to from here? To better protect property owners, the Institute for Justice says state legislatures should not water down reform bills, but should pass laws that:

> Require state and local governments to show public use and proving the property to be condemned is actually blighted;

> Prohibit public entities from giving private developers control of land technically owned by the government;

> Give landowners the opportunity to rehabilitate property before it is condemned;

> Return the property to the former owner if it is not used for the purpose for which it was condemned.

American courts once kept a person’s private property beyond the reach of government abuse, and landowners once trusted local governments to take private property only for a public use such as a school or highway. Thanks to the commonsense actions of state governors and legislatures, we may be wisely headed back in that direction.

Ronald Fraser writes on public policy issues for the DKT Liberty Project. Please send comments to [email protected]