Private Property Rights Under Siege By Stephen Bainbridge

From CNN

The Supreme Court on Thursday ruled that local governments may seize people’s homes and businesses — even against their will — for private economic development.

So much for private property rights. Kennedy and Souter voted with the majority, proving once again just how essential it is that Bush pick somebody reliably – and permanently – conservative when there’s an opening. (Related post)

As I pointed out back in February:

… the requirement to pay fair market value is a grossly inadequate safeguard on government power for two reasons in Kelo. First, it fails to take into account the subjective valuations placed on the property by people whose families have lived on the land, in at least one case, for a 100 years. In other words, if the Supreme Court rules for the city, the government will be able to seize land at a price considerably below the reservation price of the owners. 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,” O’Connor wrote. “The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.”

As I argued back in another post back in February, it’s a moral outrage.

Others: Michelle Malkin is appalled, while Eugene Volokh is giving the public choice problem pointed out by O’Connor too little credit. As Will Collier puts it:

… 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.

This content was used with the permission of ProfessorBainbridge.

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