Alternatives to Eminent Domain APA National Planning Conference May 7, :00 pm 1A06 #

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1 Alternatives to Eminent Domain 2017 APA National Planning Conference May 7, :00 pm 1A06 #

2 Presenters John M. Baker, Greene Espel PLLP, Minneapolis MN Dana Berliner, Institute for Justice, Arlington VA Frank Schnidman, former DeGrove Eminent Scholar Chair in Growth Management and Development, Florida Atlantic University School of Urban & Regional Planning

3 Overview Historical background on public use and purpose Kelo v. City of New London and the response

4 The public use requirement is rooted not in the text, but in natural rights In the Fifth Amendment, public use is not phrased as a requirement: [N]or shall private property be taken for public use, without just compensation.... The public use language in the clause was never debated, so there is virtually no legislative history reflecting its intent

5 The public use requirement is rooted not in the text, but in natural rights However, as early as 1789, when describing his theory of natural rights, one Supreme Court justice said in dictum that certain powers (including taking property from A and giving it to B) cannot be presumed to have been given by the people to legislatures (Calder v. Bull) (opinion of Justice Samuel Chase)

6 The rise of public use as a Fifth Amendment requirement 1837: the concurrence of NY State Senator Tracy says a taking must be for a public use, i.e. for the purposes of the government as a political being... Some state courts allowed private mill companies to dam rivers for profit, so long as they compensated landowners inundated upstream A 19 th Century form of economic development? Fallbrook Irrigation Dist v. Bradley (1896) Supreme Court finds an irrigation ditch is a public use by reference to its public purpose and public interest

7 Berman v. Parker (1954)

8 Southwest Washington DC, 1930s-40s

9 Berman v. Parker: the dwellings within the redevelopment area 64.3% of the dwellings were beyond repair... only 17.3% were satisfactory; 57.8% of the dwellings had outside toilets, 60.3% had no baths, 29.3% lacked electricity, 82.2% had no wash basins or laundry tubs, 83.8% lacked central heating.

10 Southwest Washington, 1930s-40s Some areas like those pictured here, in the 700 block of 4 th Ave. SW were not themselves as blighted, but were also included within the area for condemnation and replacement

11 Berman v. Parker: DC s plan The entire area needed redesigning so that a balanced, integrated plan could be developed for the region, including not only new homes but also schools, churches, parks, streets, and shopping centers. In this way it was hoped that the cycle of decay of the area could be controlled and the birth of future slums prevented."

12 Berman v. Parker: the Supreme Court s unanimous holding (1954) The role of the judiciary in determining whether [the power of eminent domain] is being exercised for a public purpose is an extremely narrow one. Once the object is within the authority of Congress, the right to realize it through eminent domain is clear. The result: Initially, 15,000 people were displaced The new Southwest was the first part of DC to offer high-quality housing without regard to race

13 Building on Berman Hawaii Housing Auth. v. Midkiff (1984) (unanimous, written by Justice O Connor) To be sure, the Court s cases have repeatedly stated that one person s property may not be taken for the benefit of another private person without a justifying public purpose, even though compensation be paid... But where the exercise of the eminent domain power is rationally related to a conceivable public purpose, the Court has never held a compensable taking to be proscribed by the Public Use Clause. 21 years later, in Kelo, Justice O Connor dissented

14 The emergence of a libertarian revolt against private-to-private transfers Wall Street Journal articles from A series of lawsuits brought by the Institute for Justice during that period, some featuring particularly sympathetic property owners An I for J survey of private-to-private uses and threats of the use of eminent domain

15 Kelo v. New London (2005)

16 A relatively ordinary set of facts An undisputedly distressed City An area where residential uses have been nonconforming since the early 20 th Century Just down the street: a sewer treatment plant Plaintiffs property and structures were not public nuisances, but parcelized the area A proposed taking pursuant to a carefully formulated economic development plan The City s goals extended beyond new jobs and increased tax revenue

17 The outcome By a 5-4 vote, the Supreme Court upholds the Conn. Supreme Court s finding of a public purpose Justice Kennedy join[s] the opinion of the court and adds further observations. Justices O Connor and Thomas write blistering dissents, joined by Chief Justice Rehnquist and Justice Scalia

18 The overlooked story: how Kelo narrowed the concept of public use The majority created one new way for property owners to win by demonstrating that the government s justifications are simply pretexts for a real intention to benefit a single private party. Justice Kennedy s observations also suggest that he might switch sides where: transfers are so suspicious, or the procedures employed are so prone to abuse, or the purported benefits are so trivial or implausible, That courts should assume an impermissible private purpose.

19 Alternatives to Eminent Domain 2017 APA National Planning Conference Dana Berliner, Institute for Justice

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21 44 states changed their laws 11 changed their constitutions 40 enacted a broad range of statutory changes

22 30 states tightened the definition of public use or public purpose Alabama Alaska Arizona Colorado Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Michigan Minnesota Missouri Montana Nevada New Hampshire New Mexico North Dakota Oregon Pennsylvania South Carolina South Dakota Tennessee Texas Virginia Wisconsin Wyoming

23 25 states changed their definitions of blight Alabama Arizona California Colorado Florida Georgia Idaho Indiana Iowa Kansas Louisiana Michigan Minnesota Missouri Montana New Hampshire New Mexico North Carolina Ohio Pennsylvania South Carolina Texas Virginia West Virginia Wisconsin

24 9 states changed the burden of proof in eminent domain cases Arizona Colorado Georgia Michigan Montana Nevada Ohio Virginia West Virginia

25 State high courts increased protections against takings for private use Hawaii Maryland Missouri New Jersey Ohio Oklahoma Pennsylvania Rhode Island South Dakota Utah

26 In the aftermath of Kelo, a grand total of 47 states increased protection against takings for private use. Dana Berliner, Looking Back Ten Years After Kelo, The Yale Law Journal Forum (2015)

27 Do these they work Treat people as individuals with individual needs If someone objects, do not try to acquire property you do not absolutely need Develop without forced acquisition Carrots not sticks Curt Pringle, Development Without Eminent Domain: Foundation of Freedom Inspires Urban Growth (2007), available at

28 Do not do these they are illegal Pretextual takings Property ticketing or using nuisance laws

29 Charlestown Pleasant Ridge Neighborhood Association v. City of Charlestown, Indiana

30 And don t do this either - Amortization It could get the city sued

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32 ASSEMBLING LAND BY ASSEMBLING PEOPLE AMERICAN PLANNING ASSOCIATION 2017 NATIONAL PLANNING CONFERENCE ALTERNATIVES TO EMINENT DOMAIN BY FRANK SCHNIDMAN

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34 OWNERSHIP POOLING F INDIVIDUAL LOTS FOR REDEVELOPMENT OWNERSHIP POOLING IS AN ARRANGEMENT WHERE INDIVIDUAL PARCEL OWNERS FORM A PARTNERSHIP OR CORPORATION TO TAKE TITLE TO THEIR INDIVIDUAL PROPERTY. THEN THE ASSEMBLED SITE IS HANDLED AS A SINGLE PARCEL.

35 PRIVATE SECTOR INITIATIVES TRADITIONAL LAND ASSEMBLY OUTRIGHT PURCHASE PARTNERSHIP AGREEMENTS

36 PRIVATE SECTOR INITIATIVES POOLING PARTICIPANT INITIATED DEVELOPER INITIATED CONSULTANT ROLE KEY CONSIDERATIONS

37 FOREIGN EXPERIENCE: LAND READJUSTMENT LAND READJUSTMENT Essentially, Land Parcels are Pooled in a Land Readjustment District Among Affected Property Owners Who Retain Their Percentage Share of Ownership Rights Before and After Development While Land Within the Project is Replotted in Three (3) Ways:

38 LAND READJUSTMENT THE LARGEST PORTION IS ALLOCATED TO NEW PRIVATE BUILDING CONSTRUCTION ANOTHER IS CONTRIBUTED FOR LOCAL INFRASTRUCTURE AND FACILITIES REQUIRED BY THE INTENSIFICATION OF THE LAND USE, AND ANOTHER IS RESERVED AND SOLD TO DEFRAY CERTAIN PROJECT COSTS

39 FOREIGN EXAMPLES WEST GERMANY -- Land Regroupment NORWAY -- Land Consolidation JAPAN --KuKaku-Seiri SOUTH KOREA -- Land Readjustment TAIWAN -- Land Consolidation AUSTRALIA -- Land Pooling CANADA -- Land Replotting ETC.

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41 UNITED STATES EXAMPLES HISTORIC EXAMPLE Washington, DC NEIGHBORHOOD POOLING Atlanta, GA Arlington, VA COMMERCIAL POOLING Farmers Market, Dallas, TX Canal Place, Schenectady, NY NEGOTIATED REPLATTING Ormand Beach, Oxnard, CA

42 NEIGHBORHOOD POOLING ATLANTA, GEORGIA

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45 REPLATTING ARTICLE

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47 Thirty Years Ago.....

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52 CONCLUSION BECAUSE OF THE KELO BACKLASH, SUBSTANTIAL INTEREST EXISTS IN FINDING WAYS TO IMPLEMENT LAND ASSMEBLY FOR REDEVELOPMENT PROJECTS WITHOUT THE USE OF EMINENT DOMAIN

53 BENEFITS FROM LAND ASSEMBLY BY ASSEMBLING PEOPLE ALLOWS LAND ALREADY COMMITTED TO DEVELOPMENT TO BE REPLATTED TO MEET MARKET DEMAND PROVIDES FOR RENEWAL AND REDEVELOPMENT OF BLIGHTED OR INAPPROPRIATELY USED AREAS ALLOWS FOR RECOGNITION OF ENVIRONMENTAL VALUES AS PART OF SITE REDESIGN LANDOWNERS BENEFIT FROM THE INCREASED VALUES CREATED FROM THE REPLATTING, AND LANDOWNERS HAVE VARIOUS OPTIONS FOR PARTICIPATION IN THE REDEVELOPMENT PROCESS OTHER THAN FORCED REMOVAL

54 The Goal: Create a Process Which Allows Current Landowners to Pool Their Property Into a Single Entity, and Participate in the Redevelopment Process Rather Than Being Removed. THANK YOU FOR YOUR TIME AND ATTENTION!