On the Anniversary of Kelo

Will more sprawl come as a result of the groundswell of opposition to the use of eminent domain to revive blighted and contaminated sites in our cities and towns? The Kelo v. City of New London Supreme Court case, and former Supreme Court Judge Sandra Day O’Conner’s dissent, created a frenzied backlash. The ability of government and quasi-government agencies to use eminent domain for economic purposes when a taking (particularly of a residence) would benefit another private party, was questioned nationwide.

Just when it appears that segments of the suburban population are moving back to cities and developers are responding with a record number of projects, new legislation has been passed, or is being considered, to limit the ability to revitalize key parcels of land for urban development projects by restricting the use of eminent domain.

This action will quell the abundance of new development as both developers and municipalities are equally concerned that when a particular property may be needed for a project to proceed, they will not be able to assemble all of the land due to the new eminent domain restrictions being contemplated. These become lost opportunities for everyone.

Let Developers Do the Development

In order to solve this problem (i.e., governments taking land from one private party, consolidating it into a larger parcel, and then transferring it to another private party for its benefit), government agencies across the country would have to act as developers to clean up their municipalities, thereby taking the risks they have been able to get others to take in the past.

Will constituents be comfortable with the possibility that their government would be at tremendous financial risk for projects that go beyond the typical school building, town hall or infrastructure project? Could they handle the extreme coordination it would take to lease the projects they develop? I think we can all recall a number of municipal projects that took far longer than proposed and exceeded the budgets originally established. Governments have proven through experience that they should not act as developers, because they typically do not have the staff or know-how to handle such projects — let alone take the risks typically associated with a large mixed-use or single use project. Developments are generally best undertaken by private developers or partnerships between the public and private sector.

Therefore, I am afraid these important projects will not come to fruition in the future and the vacant, often boarded-up buildings will remain eyesores. The end result will be tenants, ready and willing to occupy these urban locations, forced to look elsewhere with their developers. “Elsewhere” means more sprawl into the fringes of the community, on the few remaining greenfields — not in the cities where the majority of brownfields in need of attention are located.

Much of the most important legislation on this matter will initiate at the state level. Any anti-eminent domain legislation that may be passed in the coming months and years should at least contain a carve-out provision for contaminated properties (which are often blighted) so that they can  be turned into productive ratable land once again. If communities are against sprawl, then they must seriously consider the impacts careless legislation will have on potential new development in the future. BFN

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