IÂ’ve read a lot of great stuff on the Kelo decision, which effectively gutted the above clause of the Fifth Amendment to the US Constitution. The best analysis seems to be that of Professor Stephen Bainbridge.

Unfortunately, the requirement to pay fair market value is a grossly inadequate safeguard on government power for two reasons. First, it fails to take into account the subjective valuations placed on the New London property by people whose families have lived on the land, in at least one case, for a 100 years. In other words, the government now will be able to seize land at a price considerably below the reservation price of the owners. Indeed, as Will Collier explained:

"... the price even a willing seller would be able to get from his property just took a huge hit. All a developer has to do now is make a lowball offer and threaten to involve a bought-and-paid-for politician to take the property away if the owner doesn't acquiesce."

Second, unlike the prototypical eminent domain case, in which the land is seized to build, say, a school or road, in this case the city is using eminent domain to seize property that will then be turned over to a private developer. If this new development increases the value of the property, all of that value will be captured by the new owner, rather than the forced sellers. As a result, the city will have made itself richer (through higher taxes), and the developer richer, while leaving the forced sellers poorer in both subjective and objective senses.

Justice O'Connor's dissent makes the point eloquently:

"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."

After news of Napoleon's victory in the Battle of Austerlitz was conveyed to British Prime Minister William Pitt, Pitt pointed to a map of Europe and said: "Roll up the map; it will not be wanted these ten years." In light of the Supreme Court's decision to side with New London, we might just as well roll up the Takings Clause of the Bill of Rights, because we won't need it any longer.

Indeed, not only have the justices declared that we do not need the Takings Clause any longer, but they have indeed taken it, eviscerated it, and left its carcass to rot in the sun, for we have now seen the principle of eminent domain expanded far beyond the concept of public use and the revitalization of truly blighted and decayed areas to include the destruction of viable middle class communities.

UPDATE -- Great blog with a good proposed constitutional amendment.

Posted by: Greg at 12:39 PM | No Comments | Add Comment
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