Posted on 07/27/2005 4:39:00 PM PDT by nickcarraway
A recent ruling by the U.S. Supreme Court regarding eminent domain has Realtors and others in the housing industry on alert as advocates for individual property rights.
In what has been called a surprise ruling, the U.S. Supreme Court, in a 5-4 vote, sided with local government at the expense of private property owners in a highly visible case, Kelo v. New London, Conn.
While the ruling is based on what is allowed in Connecticut law and doesn't set a federal standard, it has raised important property rights issues because it is viewed as weakening the definition of "public use."
Eminent domain allows a government entity to take private property for public use or for a public purpose. When private property is taken through eminent domain, private property owners are entitled to fair market compensation.
Usually public agencies such as airport authorities, highway commissions or community development agencies can exercise the right to use eminent domain for projects such as building roads, constructing bridges, or to redevelop blighted areas in cities.
In the Kelo case, the property in question was not blighted but slated for a large commercial development project as part of the city's economic development effort. The project was designed as a "small urban village" to create jobs, revitalize the downtown area and increase tax dollars for the city.
A small group of residents refused to sell their property and filed a lawsuit that argued the taking of their property would violate the "public use" provision of the Fifth Amendment of the Constitution. The case ended up before the U.S. Supreme Court, where the final ruling favored the definition of "public use" as benefiting the "public's interest."
The court stated that its decision did not prohibit state legislatures from bringing forward legislation that would define appropriate "public use" and that state standards could be more strict than the federal standard. As well, four justices filed a dissenting opinion that said government should not have the power to take ordinary private property, even if the owners are compensated, to convert it from one use to another that is chosen by the government. The court also cited California as one state that restricts eminent domain takings for economic development to only blighted areas.
The National Association of Realtors and the National Association of Home Builders filed a brief in the case that argued for stricter standards on the public use question.
"Absolutely this is what being a member of the National Association of Realtors is all about," said Jeff Barnett, vice president of Alain Pinel Realtors in Los Gatos. "The association stands for fighting for individual property rights so more of this does not happen."
Barnett expressed surprise at the ruling and said, "For the local government to be able to take your land away for outside business interests to make more tax dollars for the city is ludicrous. This was a horrible ruling."
On a personal level, Judy Hamilton of Bankers Network was upset about the ruling's impact on homebuyers.
"It is one more area that the government is going to have control over our property. Before this ruling we only had to concern ourselves with making room for pending freeways. Now it has opened it up for private use such as strip malls. This is not fair to the home owner who may want to live in their property for the long term," Hamilton said.
Hamilton cited baby boomers and seniors as possibly being affected by the loss of control over home ownership. She said the ruling creates an uneasy feeling.
"People that are getting close to retirement and may be on a limited income would like to count on being able to stay in their homes. It is threatening because values may be affected as well as the appreciation that homeowners have counted on for their retirement," Hamilton said.
Meanwhile, as watchdogs for private property issues, Realtors are paying attention to the ruling and examining its impact. According to an article in Realtor Magazine, the National Association of Realtors is informing its members of the issue and developing resources for state and local associations to keep them informed in case they decide to seek adoption of stronger standards and definitions of public use at the state level.
Over the years, California Realtors have played a key role in bringing forward important legislation affecting real estate issues and homeowner rights. The trade association that represents more than 165,000 Realtors statewide is a strong force in Sacramento through its extensive legislative advocacy program. Locally, members of the Silicon Valley Association of Realtors participate in government affairs at the local level and through both the state and national associations on behalf of consumers and real property rights.
Realtors are not going to make a "fast buck" if the people stop buying houses because they are afraid they will be taken away at the drop of a hat. They(the realtors) are taking the only prudent course of action for them.
Indeed, the sorts of property consolidations that these whackado urban utopian projects responsible for the new wave of eminent domain case drive mean a steadily decreasing volume of transactions and less overall business for realtors.
This is a case of "follow the money". The real estate industry doesn't give a rat's petute about property rights, they just know this hurts their bottom line. If they really gave a damn about property rights, they would'nt be so eager to hide the truth about homeowner associations and how you sign away your property rights when you buy into a HOA run "community."
This is not to say that I am unhappy to hear them squawk about eminent domain abuse. The more that object to this abuse, the better.
Most real estate agents would run over their mother for a nickel.
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