Eminent Domain Outcry Pierces Statehouses

HARTFORD, Conn. – The riverside town of New London, Conn., cleared a huge hurdle last summer when the U.S. Supreme Court ruled that the city could tear down private homes to make room for a hotel, health club and office park. Now, however, the project is stalled, waiting for the state Legislature to decide whether it can go forward at all.

Bills in both houses would overturn the high court ruling by stopping the development in New London and severely restricting the future use of eminent domain-the government’s constitutional right to seize private property-in the state.

“Very few issues are this easy to understand. My constituents have shown feelings of outrage, surprise, and some are scared,” said Connecticut state Sen. John McKinney, a Republican. “Few homes will be taken by eminent domain, but anyone’s home can be taken by eminent domain.”

Connecticut’s actions are typical of the scramble in many states to respond to the Supreme Court decision. When the justices ruled in June 2005 that economic development was a sufficient public use to justify condemning private property, they also gave states a green light to restrict property takings.

So far, lawmakers in seven states have acted to limit the use of eminent domain since the Supreme Court’s ruling: Alabama, Delaware, Michigan, Ohio, South Dakota, Texas, and just this week the Indiana Legislature sent its bill to the governor. Utah and Nevada took action in anticipation of the Supreme Court decision. Lawmakers in 41 states are considering bills to curb the government’s power to seize private property, according to the National Conference of State Legislatures (NCSL).

Meanwhile, many cities and towns still are invoking their right to use eminent domain to spur commercial development. And some high-profile projects have been grandfathered in under new state limits: When Texas passed one of the more restrictive laws, it carved out an exception to raze homes for a new Dallas Cowboys stadium.

The Supreme Court ruling came in response to a suit by Connecticut homeowners who contended that eminent domain – usually used for roads and schools – does not extend to seizing private property from one owner to distribute it to another private owner. State legislators now are trying to reconcile House and Senate bills that both would increase compensation for owners of seized property to 125 percent of fair market value and require approval by a supermajority of a city’s legislative body before residential property could be taken for any reason.

Only the House measure contains an outright prohibition on the taking of residential property to increase tax revenue. Both bills would be retroactive and would kill the New London project. Bills elsewhere often are more restrictive than Connecticut’s proposed limits. Most would prohibit the use of eminent domain for private development, but others would require only that property owners get greater compensation or make it harder to declare an area blighted.

State court decisions in Arkansas, Florida, Illinois, Kentucky, Maine, Montana, South Carolina and Washington already have restricted the use of eminent domain for economic development except to remove blight. Now those legislatures — except for Arkansas and Montana, which aren’t in session — are considering legislation to codify the decisions, according to Larry Morandi, NCSL’s director of the environment, energy and transportation program.

While the Connecticut House bill would boost protections only for residential property, bills in other states also extend to private businesses.

“I have concerns about an absolute prohibition, particularly in relation to urban centers where there is little land to assemble for an economic development project,” said Connecticut state Sen. Eric Coleman, a Democrat and sponsor of the Senate bill. “But we want to have every conceivable protection afforded to the property owner.”

Some critics contend that the rush to curb the government’s ability to seize property is ill-advised.

“The bandwagon effect rising from the court decision about the evils of eminent domain has little to do with evidence,” said David Parkhurst, legislative counsel for the National League of Cities. “What we’re seeing is sweeping changes driven by headlines rather than good detailed analysis of policy.”

He contends that most eminent domain disputes focus on compensation rather than the question of the government’s right to seize property.

Restrictions on condemning property could harm municipal bond ratings and “handcuff cities” from entering public/private partnerships that create jobs, Parkhurst said. That’s a costly policy to address a process that is rare to begin with, he said.

“These are a lot of solutions in search of a problem,” he said of the various state bills.

But Connecticut state Rep. Lewis Wallace (D), lead sponsor of the House proposal, said the driving force behind the legislation is homeowners’ “fear – real or perceived” that government will take their homes. “People invest their life in their homes. It should be a rare and extreme instance when government takes a home and gives it to someone else to increase tax revenue.”

Most of the new laws and proposals are too light, according to Steve Anderson, coordinator for the Castle Coalition , a Virginia-based advocacy and legal group that defends property owners in eminent domain disputes. “In most cases, property can still be taken if it is designated as blight,” he said. “Blight is defined so vaguely. This gives government agencies a chance to do economic development through the back door.”

The court ruling opened the floodgates to eminent domain abuse, Anderson said. The group’s Web site has more than 40 examples of local governments invoking the right after the court ruling. Some examples are:

• Long Branch, N.J., where more than 20 oceanfront homeowners may have to leave their homes to make room for a new luxury condominium complex.
• Oakland, Calif., where city officials evicted a man from a downtown tire shop his family had owned since 1949 to make room for a new housing development.
• Arnold, Mo., where officials want to raze 30 homes and 15 businesses to allow the building of a Lowe’s Home Improvement store and a strip mall.
• Baltimore’s redevelopment agency is taking more than 2,000 properties in the eastern side of the city to build a biotech park and a new residential area.

In Connecticut, the New London project is stalled for now. Republican Gov. M. Jodi Rell, a Republican, called for a moratorium on condemnations last summer until the Legislature could resolve the matter. However, the New London Development Corporation issued eviction orders to three homeowners anyway, only to rescind the notices at Rell’s demand. Rell has not formally supported the House or Senate bill.

Although Republicans in the Democratic-controlled Legislature have called for a legal definition of blight, Democratic lawmakers prefer that be left to local control. What’s more important is that the burden of proof would shift upon passage of the bill if the matter went to court, said Wallace, the House bill’s sponsor.

“A city would have to defend its action in taking the property for blight, rather than the person having to defend why they should hold on to the property,” Wallace said. “Even if eminent domain is used for blight, the city would still have to put it to a public use. There could be no plot taken for economic development.”

Fred Lucas is the statehouse reporter for The News-Times in Danbury, Conn.