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The Private Property Rights Protection Act, H.R. 1689, is scheduled for action today in the House of Representatives. The bill is a response to the Supreme Court's decision in the Kelo v. New London (2005). Perhaps by coincidence, Little Pink House, which tells the story of Susette Kelo and her fight against eminent domain abuse, comes out on DVD and digital tomorrow.
Many Americans may not be familiar with eminent domain, but they should be. Eminent domain is the tool by which governments can seize private property for public use. Well, that's what it meant before Kelo. The Supreme Court redefined the term "public use," such as a road or a government building, in the Takings Clause of the Fifth Amendment to mean "public purpose." This includes economic development purposes through the transfer of ownership of property from one private owner to another, such as a corporation.
The Private Property Rights Protection Act seeks to penalize states that abuse eminent domain through Kelo-style takings. The bill would freeze federal economic development funds for two fiscal years to any state or political subdivision of a state that uses eminent domain to take land from a private entity for the purposes of transferring it to another private entity. It would also prohibit the federal government from using eminent domain for economic development purposes.
The Kelo case involves Susette Kelo and several of her neighbors from the Fort Trumball neighborhood of New London, Connecticut. They were served with condemnation notices from the New London Development Corporation, an entity created by the city council, to execute the plan for acquisition and redevelopment of the land. Kelo was served with her condemnation notice the day before Thanksgiving in 2000. Generally, eminent domain is used for blighted property, not property like that belonging to Kelo and her neighbors.
New London wanted to take advantage of the arrival of a pharmaceutical giant, Pfizer, in the city and generate tax revenue from the redevelopment of Kelo and her neighbors' property. Pfizer was attracted to the city through a generous tax break package requiring that it pay only 20 percent of property taxes for ten years on the nearly $300 million complex.
Kelo and her neighbors fought back in court. Unfortunately, the Connecticut Supreme Court ruled against them in March 2004. Represented by the Institute for Justice, Kelo and her neighbors petitioned the U.S. Supreme Court to take the case.
The power of eminent domain has visited the Supreme Court before. In 1954, the Court upheld the District of Columbia Redevelopment Act of 1945 in Berman v. Parker. The five-member District of Columbia Redevelopment Land Agency was created under the lawmto acquire property and transfer it to private entities for redevelopment.
The challenge in this case was brought by department store owners whose property was slated to be razed in the redevelopment of an area in Southwest Washington, D.C. The area had a population of more than 5,000 people, nearly 98 percent of whom were African-American. For the majority, Justice William Douglas wrote, "In the present case, the Congress and its authorized agencies have made determinations that take into account a wide variety of values. It is not for us to reappraise them."
The takings of the area in Southwest D.C. was allowed to continue. Some 23,000 dwellings were cleared for redevelopment. Although it doesn't mention Berman, a 2014 story in The New York Times explained that the post-Berman redevelopment didn't work out quite how D.C. hoped. "The Potomac waterfront in the southwest quadrant of the nation’s capital was once a symbol of urban renewal’s high hopes," the story noted, "and then of its crushing failure."
The Supreme Court decided another consequential property rights cases in 1984. In Hawaii Housing Authority v. Midkiff, the Court upheld the Hawaii State Legislature's Land Reform Act of 1967, which allowed eligible tenants to seek the title to property from their landlords through the Hawaii Housing Authority. The law was a means to increase the number of property owners on the island of Oahu.
Resting on the precedent in Berman, Justice Sandra Day O'Connor wrote the majority opinion in Midkiff. "That requirement is coterminous with the scope of a sovereign's police powers. This Court will not substitute its judgment for a legislature's judgment as to what constitutes 'public use' unless the use is palpably without reasonable foundation," she wrote. "Where the exercise of the eminent domain power is rationally related to a conceivable public purpose, a compensated taking is not prohibited by the Public Use Clause."
Berman and Midkiff were the foundations for the majority opinion in Kelo, in which "public use" in the Takings Clause was redefined to allow for economic development. Justice John Paul Stevens specific citied these two cases in his opinion for the majority, as did Justice Anthony Kennedy in his concurrence. Ironically, Justice O'Connor wrote a dissent in Kelo.
"Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more," Justice O'Connor wrote for the minority. "The Founders cannot have intended this perverse result."
Justice Clarance Thomas echoed these concerns in his dissent. "Allowing the government to take property solely for public purposes is bad enough, but extending the concept of public purpose to encompass any economically beneficial goal guarantees that these losses will fall disproportionately on poor communities," Justice Thomas explained. "Those communities are not only systematically less likely to put their lands to the highest and best social use, but are also the least politically powerful."
"Something has gone seriously awry with this Court's interpretation of the Constitution. Though citizens are safe from the government in their homes, the homes themselves are not safe," he added.
The impact of the case was immediate. Local governments threatened or condemned nearly 6,000 properties within 12 months of the decision. Thankfully, most states enacted legislation, constitutional amendments, or a combination of the two in the years after the decision. Highlighting Justice O'Connor and Thomas' point, a 2007 report by the Institute for Justice found that of the nearly 200 occasions in which Kelo-style takings took place, 58 percent of residents were minorities, nearly two-thirds had a high school level education or less, and the median annual income of was under $20,000.
In the years after Kelo, the redevelopment project was abandoned. The plot of land on which Kelo's home once stood was vacant, serving as a dumping ground for local residents for a time. Pfizer left New London, taking 1,400 jobs to nearby Groton, Connecticut.
Although most states have acted to prevent Kelo-style takings, Congress hasn't. In 2005, Rep. Jim Sensenbrenner (R-Wis.) introduced the Private Property Rights Protection Act. The bill passed by an overwhelming margin, 376 to 38. Thirty-six Democrats voted against it, as did two Republicans. Although companion legislation was introduced in the Senate, the upper chamber didn't consider either bill.
The versions of the Private Property Rights Protection Act in the 110th Congress and the 111th Congress weren't brought to the floor. At the time, Congress was controlled by Democrats. Democratic leadership didn't place the protection of private property rights as a priority. In fact, Rep. Nancy Pelosi (D-Calif.) voted against the 2005 version of the bill.
In 2012, the version of the Private Property Rights Protection Act introduced in the 112th Congress, H.R. 1433, passed by voice vote. The House again passed the Private Property Rights Protection Act in 2014 by a vote of 353 to 65. The Senate, controlled by Democrats, didn't take action in either Congress. Although Rep. Sensenbrenner reintroduced the bill in the 114th Congress, the House didn't consider it.
Today, the House will once again consider Private Property Rights Protection Act, H.R. 1689. The bill will almost certainly pass by a large margin and be transmitted to the Senate. Without question, the Private Property Rights Protection Act should become law. The question is whether the Senate will finally take action on this bill and whether the president, who has abused eminent domain and expressed support for the Kelo decision, would sign it.