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Seizing Property

June 24, 2005 at 12:00 AM EDT
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MARGARET WARNER: Yesterday’s Supreme Court ruling said that local governments could condemn any person’s home or business to make way for private economic development projects that promise to generate jobs or higher tax revenues. The 5-4 decision cleared the way for the city of New London, Connecticut, to seize 15 middle-class homes for a large hotel, office and upscale housing complex. The homeowners had refused to sell. The wider implications of this decision expanding the government’s power of eminent domain is the subject of sharp debate.

And we join that debate now with Bart Peterson, the mayor of Indianapolis– he is also a vice president of the National League of Cities; and John Norquist, a former mayor of Milwaukee. He is president of the Congress for new Urbanism, which promotes walkable communities and the preservation of old structures. Their organizations filed briefs on opposite sides of the New London case.

Welcome to you both.

John Norquist, Sandra Day O’Connor, who was in the minority yesterday wrote that now “the specter of condemnation hangs over all property.” Is that the likely impact of yesterday’s ruling?

JOHN NORQUIST: Well, I think that’s the potential. It’s shocking, really. The founders of the country put the word “public use” in the 5th Amendment for a reason, because they wanted property rights to be part of our democracy. And there are really legitimate reasons for condemnation, not just public works but sometimes clearing lands so that it can environmentally repaired. There are all kinds of good reasons to do it. But this opens it up to virtually anything; any municipality could say “Well, the land will be more valuable.”

And the real problem with that is that municipalities haven’t been that good at predicting what actions will increase the value of property. I mean, there’s empty lots all over urban sites in America where cities have condemned land and then it just sit there is idle. Assembling parcels, tearing out the fabric of the city and creating super blocks has been a strategy for economic failure.

MARGARET WARNER: Mayor Peterson, is that the meaning of the ruling in your view, that the government can take any home or business and give it, sell it, lease it so-to-someone else if that someone else promised to generate more jobs or more tax revenue or bigger profit out of it?

BART PETERSON: Well, I think the first thing to since that the Supreme Court didn’t produce any new rights or didn’t order any new rights, didn’t expand any new rights for cities. All it really did was affirm the status quo. These are powers that cities all across America have had already and the Supreme Court simply said that they were not going to restrict those powers.

And, in fact, in different states, there are greater degrees of restriction and less degrees of restriction on the use of the power of eminent domain. So I don’t think we have to fear that cities are suddenly going to rush out and try to condemn anything. It’s used sparingly and it’s used sparingly because it’s unpopular. Nobody really wants to use the power of eminent domain but it’s essential as a tool to be able to revitalize depressed communities all across America.

And so we think this is a very important ruling and simply affirming the power that we’ve already had and making sure we can redevelop our cities. I think the rebirth of American cities over the last several decades is due to these kinds of urban revitalization efforts that really would be brought to a halt if eminent domain couldn’t go forward.

MARGARET WARNER: Well, I looked up both of your records and both of you as mayors have used the power of eminent domain.

And John Norquist, do you agree… I don’t think you do agree that this really doesn’t expand the powers, but use your own experience — what is different under yesterday’s ruling? What could you have done as mayor that you weren’t able to if today’s ruling were the law?

JOHN NORQUIST: What’s different is it really takes out any kind of balancing test for public use. Basically, all you have to do is say, “Well, we think it’s going to be worth more so we’ll take your property.” That’s not necessary. Cities have all kinds of ways to condemn land. They can go through the… what is usually a very low test to declare something blighted, environmentally damaged.

There’s all kinds of ways of doing it. And I disagree with Bart that this has been the key to the revitalization of American cities. The key to revitalization of American cities is the complexity of cities, the form of cities, the streets and blocks that were being ripped apart in the ’60s and ’70s and ’80s.

Cities have finally started to figure out that the urban form is actually valuable and they don’t need to tear cities down and try to turn them into the suburbs. And that’s really what this decision — the majority opinion sort of implies, that somehow cities automatically know what adds value.

And you look around the country and I really think this is going to encourage cities to feel there’s really very little restraint on them other than that, sure, there there’s the ballot box. But the founders of this country put in the 5th Amendment for a reason. That’s because they didn’t want to just leave it to state, local or federal government to decide whether or not people had property rights.

MARGARET WARNER: Mayor Peterson, as I understand it, you ran a family development company for a while before you became mayor so you know this from at least a couple of different sides. Are developers licking their chops after yesterday’s ruling? Do you think they think they’ll have a lot more clout?

BART PETERSON: I don’t think so at all. And I would go back to what John was saying and really I agree John that we have… and I would say we have learned a lot as mayors and as leaders, as local government leaders across the country about what kind of redevelopment works and what doesn’t.

I think we all agree the kind of bulldoze economic redevelopment efforts of the 1950s and ’60s and even ’70s didn’t work and we’re doing it very differently and I think what we’re going to see is a continuation of the successful careful redevelopment of urban areas that preserves their urban character.

MARGARET WARNER: But, Mayor, what I’m really asking has less to do with urban planning policy and more with yesterday’s ruling. The decision still left to city officials but we all know money talks, not only in political campaigns but because cities are starved for tax revenues.

JOHN NORQUIST: That’s exactly the point.

MARGARET WARNER: Let me just ask the mayor first. Is this going to make it harder for city officials to resist the promises and dreams of developers who come in and say “you know, you’ve just got a few homes here, we could build an XYZ.” Isn’t it going do change the balance of forces here?

BART PETERSON: I don’t believe so because these are the powers that were already in place. The Supreme Court simply reaffirmed them. In Indiana, for example, we have a blight requirement. You have to show that there’s blight before you can use the power of eminent domain.

Now, they did not have that in Connecticut. Many states require you to pay more than the fair market value of the property if you’re condemning for economic development purposes. So each state has the ability to structure it the way they want. So I believe that it’s state by state city by city democracy that really works to prevent that kind of developer greed that you’ve expressed a concern about.

MARGARET WARNER: It’s not my concern -

BART PETERSON: I understand -

MARGARET WARNER: — but this is what other folks are saying. John Norquist, you have concern, right?

JOHN NORQUIST: I don’t think it’s developer greed necessarily. I think what it really is, is that this encourages the kind of public/private partnership behind redevelopment that often goes awry. The small developer, the small business person, the small property owner, they’re the ones that are the key to urban revitalization — not having some big firms that’s routinely hiring lobbyists and lawyers and goes down to city hall.

And what Justice Stevens’ decision really implies is that you’re going they have this big, powerful developer come in with the city government and it’s always going to be a public/private partnership and they’ll automatically know how the add value to the economy. Encouraging that, I think, is bad for property owners and I think it pushes cities in the wrong direction.

MARGARET WARNER And John -

JOHN NORQUIST: In Connecticut and in New London they’re doing exactly what they were doing back in the ’80s. It’s an old-fashioned way of bulldozing valuable Victorian 19th century homes and putting up sprawl.

MARGARET WARNER: All right. Mr. Norquist, briefly before we go, what does this do to the homeowner’s status or clout? I mean, if you’re a homeowner and a development… potential development targets your property, does this reduce the clout you have, your ability to resist even in the negotiations, even negotiating price?

JOHN NORQUIST: Well, if a local government under the influence of whoever wants them to do this pushes hard enough, there’s really no defense. That’s the problem with it. There used to be a balancing test. It was easy, really, to condemn if a municipality had to do it for all kinds of other reasons.

Now they can do it very easily. I think that’s going to be something that the Supreme Court and everybody else is going to regret and I think there will be a lot of public pressure to change this.

MARGARET WARNER: And Mayor Peterson, do you anticipate we’re going see big battles now in state legislatures, because as you pointed out and the court did say, states could enact more restrictive policies?

BART PETERSON: I do think it’s possible that we’ll see some states review their laws and see whether they think they’re restrictive enough or whether they want to add anything; and that’s, you know, that’s the democratic process.

But I really think that states and local government officials are… we’re smarter than John gives us credit for. I think we understand how to do urban redevelopment. We understand preserving the urban character of our communities is the key to success and a key to improving the quality of life. And I think you’re going to see people continue to do the reporting live from thing in spite of this… without regard to this ruling because it really just preserves the status quo.

MARGARET WARNER: All right. Mayor Bart Peterson, former Mayor John Norquist, thank you both.