THE END OF PRIVATE PROPERTY RIGHTS

Nealz Nuze ^ | June 24, 2005 | Neal Boortz

[beaureguard]

I cannot remember being more dismayed at a court ruling, and this includes the occasional ruling against me when I was practicing law. What ruling? Just in case you don't already know, the United States Supreme Court yesterday issued a ruling that goes a long way toward destroying private property rights in this country.

Background. The Fifth Amendment to our Constitution restricts the government's right of eminent domain. It does not, as I heard so many commentators say yesterday, grant a right of eminent domain, it restricts it. The right of eminent domain was assumed as a basic part of English Common Law. The Fifth Amendment merely said that government could not exercise this right for a public use without paying for it. The exact working is "nor shall private property be taken for public use without just compensation."

For hundreds of years the term "public use" was interpreted to mean use for something like a school, library, police or fire station, power transmission lines, roads, bridges or some other facility owned and operated by government for the benefit of the general population. As politicians became more and more impressed with their own power they started to expand this definition of public use.

The new theory is that increasing the property taxes paid on a parcel of property is a public use. Increasing the number of people who can be employed by a business located on a particular piece of property can also be a public use. This would mean that government would be free to seize private property if it can be handed to a developer who will redevelop the property so as to increase the property taxes paid or the number of people employed. This is the theory that was validated by the Supreme Court yesterday in its ruling approving just such a private property seizure in New London, Connecticut. As Justice Sandra Day O'Connor said in her dissent, this decision renders virtually all private property vulnerable to government confiscation.

Bottom line: If you own property, and the government wants that property --- you're screwed. You now own your private property only at the pleasure of government; and that means that you own your property, be it your home, your business or a piece of investment real estate only at the pleasure of the local controlling politicians.

Let me give you a few real-life examples of just how politicians can now use this Supreme Court decision. In considering these examples, please remember one of the first rules of politics: There is absolutely no limit whatsoever to a politician's desire for more tax money to spend.

First let's consider our lovely Southern Belle producer Belinda. Belinda and her husband recently purchased a tract of land behind her new home. That tract of land contains one rather small and old house plus some empty acreage. Belinda will rent the home for just enough to cover her debt service and property taxes on the new purchase ... maybe. Now, here comes a developer. He wants Belinda's land because he can build at least three, maybe four new homes on that property. Belinda says no. She likes not having houses abutting her back yard and appreciates the investment value of the land she has purchased. So .. the developer wanders off to the Capitol to talk to some politicians. He tells them that he can increase the property being paid on that tract of land tenfold if he could just get in there and build some houses, but the owners just won't sell the property to him. Under this Supreme court ruling the city can just seize the property from Belinda and hand it over to the developer to build those homes. Belinda has no way to stop this action. The city will have to play Belinda "just compensation," but that compensation will never match what Belinda might have earned by selling the property herself. Besides ... she didn't want to sell in the first place. It was her property, and she wanted to keep it. Now it can be taken ... just like that.

Another example. This time we'll use me. About two years ago I brought a building lot in the Northeast Georgia mountains. It's a lot in a mountain resort community. Before I bought the lot I made sure that there were no covenants or regulations that would require me to build a home on that lot before I was ready to do so. At present it is not my intention to build a home. I bought the lot as an investment. Now, since there is no home as of yet the property taxes are rather low. Along comes a developer. He wants to build a home on my lot. I tell him the lot is not for sale. He waltzes off to the local county commission to complain. He wants to build a house, I won't sell him the land. If he could build the house the property taxes would jump on that parcel of land. The county commission then sends me a letter telling me that if I don't sell my land to that developer to build that home they are going to seize the land and turn it over. Thanks to the Supreme Court, I'm screwed.

Now take the situation in New London. This is the case the court was considering. The targeted neighborhood is populated by middle class residents. The homes are old, but very well kept. One couple now slated to have their property seized is in their 80's. They celebrated their wedding in that home. They raised their children in that home. They held their 50th wedding anniversary party in that home. Now they're going to lose that home because a developer wants the property to build a hotel, some office buildings and a work out center. This is America. This shouldn't happen in America. That couple shouldn't be kicked out of their home just because a new development would pay more in property taxes.

There are also small businesses located on this tract of land. They're history. The big boys are in town, and the big boys can use eminent domain to get your property.

No society ostensibly based on economic liberty can survive unless that society recognizes the right to property. The right to property has been all but crippled by this decision from the Supreme Court. That right is now subject to the whims of politicians and developers.

I'm not through ranting. Read on.

Considering this ruling, how likely are you to invest in real estate at this point? If you saw a tract of land that was placed squarely in the path of growth, would you buy that property in hoes that you could later sell it for a substantial profit? I wouldn't. I wouldn't be interesting in investing in that property because I know that when it came time to sell the potential purchaser would lowball me on the price. I would never get a true market value based on the highest and best use of that property. And why not? Because the developer wanting that property would simply tell me that if I didn't' accept his lowball offer he would just go to the local government and start the eminent domain process. This ruling also means that virtually every piece of raw land out there has decreased in value. The threat of eminent domain for private economic development has severely damaged in most cases, and destroyed in many others, the American dream of investing in real estate.

Another element of the New London case. These middle class homes and small businesses were located on a waterfront. Everybody knows that middle class people and small businesses have no right to live on prime waterfront property. This property should be reserved for expensive homes and for big businesses with powerful political connections .. businesses like Pfizer Pharmaceutical company. Pfizer will be one of the beneficiaries of the New London seizures. This hideous Supreme Court ruling is going to result in a disgusting orgy of wealthy developers and politically powerful business interests using their political connections to ride roughshod over the property rights of poor and middle class property owners. I doubt seriously that you'll ever hear of some politician invoking eminent domain to seize property from a wealthy individual or business to make way for a low income housing project.

There's another element I want to add to this rant. I believe this Supreme Court decision to be a victory for the dark side in the war against individualism. Sadly, sometimes I think that I'm the only one out there who realizes that this war is being fought ... the only one on the side of individuality, that is. How in the world can leftist icon Ted Kennedy make say that "we are engaged in a war against individuality" without at least a few people in the media asking him what in the world he's talking about?

The concept of individuality is a very troublesome one for liberals. Recognizing the concept of the individual brings with it a whole lot of baggage that liberals don't want to carry around. When you acknowledge the existence of the individual you then have to recognize that the individual has rights. Among those rights would be the right to property. Liberals aren't friendly with the idea of property rights. They're fond of chanting such absurdities as "human rights, not property rights." Well, truthfully speaking; property has no rights. People have the right to property .. and those rights have been severely damaged.

Now ... is there a bright side? Is there anything good in the ruling? Yes, there is, and this is where you come in. Even though the Supremes approved these government confiscations of private property, the five justices who voted with the majority did say that they didn't like it. They encouraged local jurisdictions to pass laws severely restricting these seizures. There are eight states in the nation where the use of eminent domain for private development is all but prohibited by law. Those states are Washington, Montana, Illinois, Kentucky, Arkansas, Maine, South Carolina and Florida. If your state is not on this list, it's time for a little political activism. Start the movement now. Let your legislators know that you want your private property rights restored, and that your decisions on election day will be governed by their willingness to act to preserve your rights.

The Supreme Court decision is a horrible blow to private property rights. Whether or not it is a death-blow will be up to you.

[ubu]

Tkdietz:

As an employee of a government (albeit not a dept. directly involved in such roadbuilding) I ask you this:

How do you think the government decides which roads get built or widened?

Why, the ones near where the "right people" live, or the "right people" have snapped up all the available commercial property on spec, of course. Now we can add "or all the wrong people live nearby and it can be redeveloped."

Here in Houston, the Grand Parkway's route was determined by publicly allowing "land owners" to donate the property. Of course, those land owners were developers who had gone out and bought the land cheap. Then they donated tracts along the edges of their property--resulting in a route that wanders all over the place (so it's more expensive to build) to ensure ready access to the developments they will create.

And this is despite studies showing a negative economic and ecological impact from the Grand Parkway's development!

[new cruelty]

I see your point. This spotlight may turn into something positive. Thank you again for your time.

[TheForceOfOne]

Don't worry, they will ply us with whiskey first, then have us sign treaty.

[Snoopers-868th]

ping

[RightWhale]

This spotlight may turn into something positive

It is possible. Some optimism would not hurt the mood of the day.

[ubu]

Just compensation doesn't matter. Gov't lowballs because it knows it can; once the gov't wants it, no one else is going to bother, so you can't get "market value."

Case in point:

"The UKMD (hail, comrade!) wants to create something they call a "community center" and offered to buy a two-story building for $1.9 million. It's owned by the American Automobile Association, and located o­n the Southwest Freeway near the Greenway Plaza; prime commercial real estate. Then the Girl Scouts, headquartered in the building next door -- even sharing the same parking lot -- found out it was for sale. It doesn't get any better than that. Either pay a lot of money to rebuild theur current structure, or they buy out their longtime neighbor. So they outbid the UKMD (hail, comrade!) , offering $2.2 million. (The property is assessed by the HCAD at $1.8m). The District decided that fine, they could meet that offer. This is great--capitalism at work! Someone's got a commodity, folks who are bidding have got the money. Lets do this!

Only o­ne side didn't want to play fair in a bidding war. Suddenly, the AAA broke off the negotiations with the GSA. Why? They got a letter from the UKMD (hail, comrade!) stating that if it had to do so, it would use eminent domain to take the building. The AAA, cowed into avoiding what would be a costly legal battle if they tried to defy the District, folded."

Emphasis added.

Full story
Almost a 25% difference between the assessed value and the last offer before the unelected "reinvestment zone" board cheated.

[sandydipper]

You will get a bad greeting if you show up here to seize my home - I don't give a rats butt what the Supremes said.

[RightWhale]

Most people don't have the knowledge or attention span to follow these municipal deals all the way and in detail. Those who do seem remarkably one-dimensional or dilettantes. Professionals can do it, right-of-way agents have the particular blend of character traits needed for success in this field of endeavor.

No doubt there will be more people taking a look at this kind of career, but the professionals will remain a small, select group.

[new cruelty]

Well, I see a reason for optimism if this is an issue of us simple folk just not being up to speed on things. If so, then perhaps more people will be moved to avail themselves of the opportunities set before them, inciting them to become more informed, take a greater interest in what their elected officials are doing, and take action at a local level.

But if this ruling means that those opportunities have come and gone, then screw it, I was better off sleeping. : )

[RightWhale]

Nope, control remains local. Get involved, attend city council meetings anyway. For light reading, the anti-federalist papers can spark some useful thinking.

[MarMema]

And we have a governor who was not elected.

[Vicki]

And we have a governor who was not elected.

We have already lost our rights. Let's get I-912 on the ballot and rub Olympia's noses in it!

[AdamSelene235]

Being primarily a local issue in most cases, the local community has a great deal of control.

If the property is under community control it isn't private property but rather communal property.

[indcons]

pls. include me in this ping list

[Wolfhound777]

I hate to say it but the Federal Government is fast becoming an illegitimate government. It is no longer a government in service to the people, but in service to itself by outright theft. The SCOTUS is completely out of control and impeachment proceedings are warranted. It may not be too early to start "shooting" the bastards anymore.

[TKDietz]

You cite a bad example. There are plenty of good ones, examples of beneficial and even necessary roads that have been built or widened and in the process required land that had to be taken by eminent domain. Think about some of the interstate highways and so on that would not exist without eminent domain.

[ubu]

Actually, I'm thinking it would have multiple advantages, though the changes would not be without discomfort.

Fewer freeways = less urban sprawl. Over time, people will want to live closer to their jobs, since they can't move 30 miles away and expect someone to build or widen a convenient freeway. Thus the cities'population & tax base, etc. are enhanced. (Other possiblity, jobs move to smaller towns; it's a tossup.)

Fewer freeways = more congested traffic, hence more pollution (bad effect), but therefore more pressure to make cars less polluting and more efficient.

Fewer freeways & higher pop density = more pressure to build mass transit (in existing ROW's)

Since the completion of 95% of the Interstate Highway system in the 1970's, most of the freeway construction in this nation has been _urban_ to _sub-urban_, not cross-country (I-49 being the biggest exception, as would be the proposed "I-69 NAFTA" highway.)

Stop making it so easy for developers to do "greenfield" development and then grease palms to get roads built to their new "master planned communities" and the tax base of the cities will eventually begin to recover.