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State Based Anti-Kelo Laws: Full of Sound & Fury, Signifying Nothing

The U.S. Supreme Court’s decision in Kelo v. City of New London and its aftermath is the subject of a very interesting commentary in the February issue of the Planning & Environmental Law Journal, entitled “All Sound, No Fury? The Impacts of State Based Kelo Laws,” by Harvey M. Jacobs, a professor at the University of Wisconsin-Madison and Ellen M. Bassett, an assistant professor in the School of Urban Studies at Portland State University. 

In it, the authors explain that Kelo was one of the most controversial decisions to emerge from the Supreme Court, most certainly as it relates to takings jurisprudence.  Yet although proponents of the property rights movement have had great success in passing laws responding to public concern following Kelo, these laws have proven to be shy on substance, resulting in very little change in what local and state governments are actually do in taking property by eminent domain.  The article suggests some opinions for this outcome which are worth further consideration. 

The facts giving rise to this decision included Susette Kelo and her “little pink house,” as one of 15 property owners who refused to sell their land to the city so that it could consolidate those parcels with those of 215 other owners who were willing to sell to an urban renewal agency, which planned to assemble the land into larger parcels and then sell a portion of the property to a multinational pharmaceutical company to accommodate a research and production facility.  The city proposed to use eminent domain to obtain these 15 hold-out properties relying on its comprehensive plan and intent to provide a greater number of jobs for the community, increase taxes as well as its economic competitiveness.  Mrs. Kelo and others argued that the city’s efforts represented a violation of the Fifth Amendment “takings” clause in that it was intended to allow takings for a public use and prohibited taking private land from one private owner and transferring it to another.  The Court disagreed on a 5-4 vote, finding that the Fifth Amendment did not bar the city’s approach but went on to say that “nothing in our opinion precludes any State from placing further restriction on its exercise of the takings power.” 

As the Commentary notes, reaction to the Court’s decision was “swift, strong and negative.”  Forty-three states including Oregon, with one pending passage in Virginia this session, adopted legislation prohibiting government from using eminent domain to achieve a private purpose or to convey property acquired by eminent domain to a private owner.  Some writers have suggested that “the Kelo backlash probably resulted in more new state legislation than any other Supreme Court decision in history” with its closest competitors being the cases striking down segregation and death penalty legislation.  Notwithstanding this outpouring of support for these anti-Kelo reactions, they seem to have been relegated to the dustbins of history.  There is little current discussion and virtually no debate about their effectiveness.  Even commentators who favor the state-based limitations agree that the outpouring of legislation may amount to no more than “merely hortatory fluff.”

Other writers believe that the state anti-Kelo initiatives consisted largely of symbolic efforts by politicians to show their responsiveness to their constituents’ outrage.  Although the reasons why a more substantive reform was not demanded is unclear, these writers think the symbolic focus was an intentional act by those who stood to lose, such as environmentalists, the business community, or governments interested in urban renewal.  Yet others think it was ignorance on the part of the voters or legislators who failed to propose or demand something with more content.  Still another idea is that most state legislators find their political roots in working for local governments and feel the need to keep planning and financing strategies and options open.   These authors note a link between economic growth and substantive takings limitations.  Cities doing well are more likely to have more narrow and stringent takings prohibitions.  However, when the economy is faltering, the inability to use traditional eminent domain power can have dire consequences -- especially now.  Kelo raised public awareness of the relationship between government activity and private property rights in a way that has changed the way governments plan and act.  The Commentary authors argue that this increased awareness has made obtaining stakeholder support and the need for a transparent process even more important.  Planners should not forget that the fury of property rights advocates but they should hone their positions in response, as governments find themselves with limited options in terms fiscal solvency making the relationship between planning and the sound use of eminent domain more important than ever.

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