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November 18, 2005



PAUL GIGOT: Few Supreme Court decisions have so unified critics on all sides as the decision last June that local governments have more or less unlimited authority to take private property. The backlash is enormous. Correspondent Celeste Ford reports from New Jersey.

CELESTE FORD: On the New Jersey shore, residents of a beachfront neighborhood are fighting to keep their homes. The city of Long Branch is working with a private developer to build luxury condominiums, retail space and a park. The next phase of the plan hinges on buying and tearing down at least 30 houses. But residents say they won't sell their homes so that other homeowners can enjoy their spot. If Denise Hoagland doesn't cooperate, she says the city will use eminent domain to condemn her house and buy it for 400 thousand dollars.

DENISE HOAGLAND: They're stealing property from homeowners. I mean, look behind me. You see that ocean view? That ocean view -- I would like anybody, I challenge anybody in this world to tell me where I can get that ocean view on the Jersey Shore in Monmouth County for 400 thousand dollars.

CELESTE FORD: Hoagland says she's not interested in the city's money because she does not want to leave her house and uproot her family. For a dozen homeowners the issue is property rights.

BILL GIORDANO: In America, property ownership is recognized as a major component of the American Dream. And for someone to just come and turn your dream into a nightmare is totally un-American.

CELESTE FORD: The neighborhood suffered a huge setback in June when the US Supreme Court in a five to four decision ruled against homeowners in a similar dispute -- the Kelo case. The justices said New London, Connecticut could use eminent domain to condemn a home for private development if it served a public benefit such as tax revenues and jobs. The Kelo case appeared to give government and private developers the upper hand. But today, the ruling is suddenly giving property owners a big boost.

CHIP MELLOR (INSTITUTE FOR JUSTICE): There's been a strong emotional response that cuts across political spectrum, and economic class.

CELESTE FORD: Opinion polls conducted after the Supreme Court ruling show overwhelming opposition to the use of eminent domain for economic development. The result is a national backlash that surprised people on both sides of the issue.

JEFF FINKLE (INTERNATIONAL ECONOMIC DEVELOPMENT COUNCIL): In post-Kelo, it's going to be used as a political bullet against any politician that goes out there and says, "We're going to take someone's home."

CELESTE FORD: Under eminent domain, public use originally meant public works such as the transcontinental railroad and the Brooklyn Bridge. But starting in the 1950's, public use was expanded to include urban renewal and other projects involving private development. That expansion was upheld in the recent Supreme Court decision.

The Supreme Court did leave an opening for state governments by emphasizing their power to place further restrictions on the use of eminent domain. That's just what is happening. Since June, Congress and at least 35 state legislatures have been considering measures that could make it harder to condemn private property.

MAYOR ADAM SCHNEIDER: I think the reaction has been simplistic and knee-jerk.

CELESTE FORD: Back in New Jersey, the mayor of Long Branch, Adam Schneider, says the backlash could devastate struggling cities. He insists they need the power of eminent domain to assemble properties that will attract private investors.

MAYOR ADAM SCHNEIDER: Towns like Long Branch that have deteriorated for any number of different reasons are going to have a very difficult time rebuilding themselves unless government on the state and federal level wants to come in with a mass infusions of funds.

CELESTE FORD: Does that justify taking someone's home?

MAYOR ADAM SCHNEIDER: Yes, absolutely.

CELESTE FORD: The head of the International Economic Development Council says lawmakers must move slowly, or in a few years they'll have to undo the legislation they are working to pass. He says a lot is at stake. For example, in a rundown section of Washington DC plans for a new stadium for the Washington Nationals baseball team depend on the use of eminent domain to acquire the needed land. And what about New Orleans? If the federal bills pass, they could hinder redevelopment. The city might not be allowed to condemn some private property for fear of losing federal funds.

CELESTE FORD: How can you defend a policy that essentially guts the American dream of home ownership?

JEFF FINKLE: Generally we're gutting blight. What we're trying to get to is eliminating slums and blight and put people into a better place.

CELESTE FORD: He points to the success stories that relied on eminent domain, among them the Times Square makeover, including the new headquarters for The New York Times; Baltimore's Inner Harbor waterfront; San Diego's new ballpark; and the NASCAR complex in Kansas City.

So are there alternatives to eminent domain? The Institute for Justice, which represents the homeowners in New London, says yes.

CHIP MELLOR (INSTITUTE FOR JUSTICE): Cities will always have available to them many, many opportunities and power, powers to create incentives and to promote economic development. They do not need to resort to eminent domain. And I don't think there's any danger at all of the legislation that's being considered handcuffing the cities in a way that's counterproductive to their future.

CELESTE FORD: The Institute for Justice says it will represent the New Jersey homeowners if their dispute ends in condemnation.

DENISE HOAGLAND: What is our birthright? A constitutional right to own property. And I'm not going to stand by idly and let somebody take it from me.

PAUL GIGOT: Bret, it isn't often that Maxine Waters, the liberal California Democrat, agrees with Republicans on an issue. But she agrees with them on this one. What explains this strange bedfellows partnership?

BRET STEPHENS: Well, Maxine Waters and most Republicans know fascism when they see it.

PAUL GIGOT: Fascism?

BRET STEPHENS: Yes. This is a kind of fascism. This is using the power of the State to crush little people of obstreperous views by calling them "blight," and doing so on behalf of big corporations, developers, and people of means and influence. That's exactly what Sandra Day O'Connor said in her dissent in the Kelo case. And this is what's happening. I think it's a very worrisome precedent.

PAUL GIGOT: The people who end up having the most influence with government, in other words, are not the little guys. It's the rich and powerful who have the wherewithal to influence.

ROB POLLOCK: That's right. And this is not just sort of a post hoc alliance after the Kelo decision. The NAACP and the Southern Christian Leadership Conference, of Martin Luther King fame, actually filed amicus briefs with the Supreme Court on behalf of Susette Kelo.

PAUL GIGOT: Dan, there's a real paradox here. A lot of people on the political left do claim to represent the little guy, really think that somehow the only way you can revitalize some of these blighted inner cities is with the power of government to come in, clean it out, and then kind of have a top down model of revitalization.

DAN HENNINGER: Well, that's right. And it was ironic that this case came out of Connecticut, because New Haven is exhibit A in this sort of process. They've received billions of dollars from about 1960 onward, and the city remains a catastrophe, as does Bridgeport, Connecticut, as does Hartford, Connecticut. You can just roll bowling balls down the center of Hartford after closing time. And this is a proven failure: the model cities program, urban renewal, where you clear spaces. They did this in New York City on the Lower East Side and put up tremendous public housing projects, which made it difficult to put anything else into those neighborhoods.

PAUL GIGOT: But what about the example of Baltimore, where, for example, it was mentioned in the piece -- the inner harbor down there is really beautiful.

DAN HENNINGER: It's beautiful, and there's nobody there after work or after dark. No one comes down there. We not long ago were visited by a group from Baltimore, and the reason was that they had commissioned a study to try to figure out how Baltimore could attract more new immigrants the way Jersey City has, Houston, Phoenix and Dallas. Because they weren't coming to Baltimore. And they did a huge survey of places that had succeeded, and the thing that attracted new activity, new people, was economic opportunity. And if you don't have that in a place like Baltimore or New Haven or Long Branch, it is simply not going to happen.

PAUL GIGOT: It is true, if you go in New York City or Chicago, a lot of cities around the country, you'll see that neighborhoods that were 20 years ago really blighted, now have been revitalized, and they've been revitalized often, maybe even most of the time, by immigrant families, groups of immigrants who have come in, bought shops, built up a commercial enterprise, built up commercial activity. Harlem now is a boom town.

BRET STEPHENS: Absolutely. And the idea that there's something undesirable, per se, about a lower income neighborhood is just offensive. Look, lots of people live pretty good lives in neighborhoods like that.

ROB POLLOCK: Well also local governments could help their own communities by doing what local governments are supposed to do -- law enforcement is a big issue, creating economic opportunity by lowering taxes, encouraging better schools -- a whole panoply of things that we expect government to do, they aren't doing, so what they're doing is trying to substitute top down development schemes and hoping that a Pfizer or another major corporation is going to save them from their own incompetence.

PAUL GIGOT: The political momentum here is pretty strong. The House voted 376 to 38 to put limits on what hold money on states if they practice the Kelo precedent...

ROB POLLOCK: Well it was actually they condemned Kelo, and the vote to withhold money was a bit more balanced.

PAUL GIGOT: Okay, but anyway there's a lot of momentum for this. And I suspect it's going to get through Congress. Okay, thank you all. Next subject.