When the U.S. Supreme Court ruled that governments had broad power to take private property to boost economic development, real-estate executives cheered.What a beautiful, bi-partisan, populist backlash against the greedheads. Ayn Rand, Thomas Jefferson, and Hunter S. Thompson are surely all smiling down upon us.
But an unexpected backlash against the ruling stopped the cheering and threatens to derail some projects that depended on the use of eminent domain to seize property.
In the six weeks since the Supreme Court's ruling in the Kelo v. New London case, bills have been introduced in Congress and in more than half of the state legislatures that would restrict, to varying degrees, the use of eminent domain for private development. Delaware has gone the furthest, passing a law restricting the use of eminent domain. In Alabama, legislation curbing eminent domain for economic purposes has passed both houses and awaits the governor's signature.
Real-estate and economic-development officials are growing increasingly concerned that the backlash will block more projects, potentially causing big losses for developers and canceling long-planned projects.
"It's finally dawning on homeowners and small businesses that this could happen to me," says Dana Berliner, a lawyer at the Institute for Justice. Whether the Institute for Justice can take credit or not, the issue has struck a nerve with Americans. In Connecticut, where the Supreme Court case originated, a Quinnipiac University poll shows just how much the eminent-domain issue resonates. By an 11-to-1 margin, those surveyed said they opposed the taking of private property for private uses, even if it is for the public economic good. According to the poll, 89% of those surveyed were against condemnations for private economic development, compared with 8% for them. Douglas Schwartz, head of the poll, says he has never seen such a lopsided margin on any issue he has polled.
The Castle Coalition is a good source for information on the fight.