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Eminent domain and private gain

A report claims that 10,000 properties have been seized by cities for private developers.

By Staff writer of The Christian Science Monitor / May 9, 2003


Bill Brody thought he was set for life.

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He'd bought and renovated four buildings on South Main Street in this struggling New York suburb and was successfully renting them out.

Then he was informed the village was taking his property - all of it. And because he missed a small, legal notice in the paper, he even lost the right to fight the decision.

The village had simply declared eminent domain, so that another private developer could build part of a Stop & Shop and parking lot where Mr. Brody's commercial buildings sat.

"It's ludicrous," says Brody. "If it was for a road or a school or a highway I wouldn't bother."

But since the village was taking his property only to give it to another private developer, Brody decided to take it to court.

The Constitution does give local governments the right to condemn property through eminent domain for "public use" if the owner is compensated. But in the past five years, both state and local governments have taken or threatened to take more than 10,000 homes and small businesses such as Brody's to turn them over to private developers, according to a report compiled by the Institute for Justice, a nonprofit advocacy law firm in Washington.

The local governments contend they're creating bigger tax bases and more jobs to help the local economy. That's the "public use." But to critics it's an unconstitutional abuse.

"Practically every house in the entire country would produce more jobs and taxes as an office building, and everybody's small business would produce more jobs and taxes if it were removed and turned into a Costco," says Dana Berliner, a senior attorney at the Institute for Justice. "If that's all it takes, then your house or business can be up for grabs as soon as a some private business interest takes a fancy to it."

The increase in the use of eminent domain for private entities has created a groundswell of opposition from New York and Detroit to California.

The Institute for Justice's report documents dozens of instances of apparent abuse where states and local cities and towns put the interests of individual developers over longtime residents. For instance:

• In Atlantic City, an entire black middle-class neighborhood was condemned and destroyed to make way for a tunnel to a new casino.

• Bremerton, Washington removed a woman in her 80s from her home of 55 years for the claimed purpose of expanding a sewer plant, but gave her former home to an auto dealership.

• West Palm Beach County in Florida condemned a family's home so that the manager of a planned new golf course could live in it.

Many individuals are fighting the practice and the courts, which used to routinely rubber stamp local condemnations, are responding.

In 40 percent of the challenges to eminent domain brought between 1998 and 2002, courts sided with the original landowners. Six state legislatures have passed bills increasing protections for people threatened with eminent domain. Eleven others are considering such bills, including New York.

The practice of eminent domain has been abused throughout US history. When the railroads and many of the nation's highways were built, landowners were often told their properties were condemned, given a dollar and told to go to court if they wanted their "just compensation." But even using such high-handed tactics, most eminent-domain condemnations were used for clearly delineated public purposes.