D. Dowd Muska


Kelo: There’s Still Work to Be Done

February 18, 2016

Suggestion for state legislators: Take a break from raising taxes, expanding Medicaid, and saddling businesses with new regulations. Put all that aside for a few minutes, and read Protecting Private Property Rights: The Property Ownership Fairness Act.

Written by legal scholars Christina and Timothy Sandefur, the paper explores post-Kelo America. The Supreme Court’s 2005 ruling, quickly receding from memory, validated a larcenous “redevelopment” scheme in New London, Connecticut. It surely stands as the justices’ most infamous decision since Roe v. Wade. Rage was incited nationwide. Many state-level responses found two-chamber majorities and governors’ signatures, but as the Sandefurs note, most of the laws “were hampered by loopholes or ineffective tinkering with procedural details, thus leaving property rights as vulnerable as ever.”

Issued by the Arizona-based Goldwater Institute, Protecting Private Property Rights explains why the Grand Canyon State’s reaction to Kelo worked so well, and how similar measures can be wielded by civil libertarians elsewhere. Passed in 2006, the Private Property Rights Protection Act “has proven a marked success story -- improving government efficiency and securing Arizonans’ right to their possessions, with none of the chaos opponents predicted. The Act is an excellent model for states that want to provide meaningful security for one of the most essential human rights: the right of property ownership.”

A core oversight of many Kelo reforms involves “blight.” Sleazy cabals of municipal politicians, media busybodies, “community leaders,” union bosses, and politically connected developers regularly conspire to seize properties they think can be refashioned in superior ways. In Lakewood, Ohio, “a tidy, middle-class neighborhood” was targeted for destruction, to be replaced by luxury condominiums. In California, “blight” can mean buildings with “substandard design, inadequate size given present standards and market conditions, [or] lack of parking.” Most redevelopment laws, the Sandefurs lament, “let local officials declare an entire area blighted, even if it includes well-maintained homes or successful businesses.”

Property rights are at risk from another Big Government favorite: “regulations that prohibit owners from using, selling, or building on their land.” Prohibitions on short-term rentals, aimed at shutting down customers of Airbnb and HomeAway, are just the latest manifestation of such deceptive -- and frequently, corrupt -- Nanny Statism. “Powerful hotels and vocal neighbors are successfully urging cities to ban property owners from offering their homes to travelers, despite the fact that these restrictions have no connection to the government’s legitimate functions of protecting people’s health and safety. From New York City to Santa Monica, places with bustling tourism economies are rushing to restrict homeowners from offering rooms in their homes to travelers.”

To strengthen property rights at the state level, Goldwater’s attorneys are recommending model legislation “incorporating the lessons learned” from Arizona’s ten-year experiment in countering Kelo. Their language gets the key definition right at the start. “Public use,” the operative phrase in eminent domain, does “not include the public benefits of economic development, including an increase in tax base, tax revenues, employment or general economic health.” Blight still exists under the Property Ownership Fairness Act (POFA), but it must be justified by reasonable concern about genuine dangers.

Next, the burden of proof switches. Government land-grabbers must show that their plan is needed to eliminate real risks to the public. The evidence they present must be “clear and convincing.” And if a contested seizure is overturned by a court, it is taxpayers who pick up the tab for “property owners’ attorney fees.”

For regulatory takings, the POFA again decrees that rules crafted to ensure domestic tranquility and prevent eco-crimes aren’t at issue. (“Government is not required to compensate a robber when the policeman takes his gun away, or to pay people when it bars them from polluting their neighbors’ property.”) But when regulations “reduce the value of property in ways not justified by public safety needs,” compensation is due. A three-year period is allowed file a claim, the initial step in a process that is “designed to allow government and property owners to negotiate a settlement without having to go to court.” The goal is “elected officials [who] sensibly weigh the real costs and benefits of their land-use regulations instead of merely pretending that restrictions on property are costless.”

The Sandefurs’ paper eloquently assails the “growing belief than an individual’s private property should be micromanaged by regulators, despite the fact that they are often more interested in serving vocal special interests.” But they’ve provided a powerful tool to fight back, and place “fundamental fairness” above “community desires.” Pro-liberty legislators beyond Arizona’s borders should take notice -- and start drafting bills.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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