Lessons From a Little Pink House, 10 Years Later

Since the Kelo decision, 45 states have passed laws reforming eminent domain, with mixed results.

June 22, 2015 • Commentary
This article appeared in The Wall Street Journal on June 23, 2015.

June 23 marks the 10th anniversary of Kelo v. City of New London, when the Supreme Court held in a 5–4 ruling that government could use eminent domain to take private property for “economic development.” At issue in the case were 15 homes, including a little pink house owned by Susette Kelo, in the city of New London, Conn., which wanted to transfer the properties to a private nonprofit with plans to revitalize the area. But after the court ruled and the houses were razed (with the exception of Ms. Kelo’s, which was moved at private expense), those plans fell through.

The condemned land remains empty, housing only a few feral cats. After Hurricane Irene in 2011, the city used it as a dumping ground for debris. Yet the first real development since the Supreme Court’s controversial decision might now be on its way: New London Mayor Daryl Finizio, who was elected in 2011 as a critic of the government taking, recently announced a plan to turn the former site of Ms. Kelo’s house into a park that will “serve as a memorial to all those adversely affected by the city’s use of eminent domain.”

It would be a fitting tribute. Although the Supreme Court’s decision in Kelo was consistent with precedent, it was nonetheless a serious error.

The Fifth Amendment allows governments to take private property only for “public use.” Until the early 20th century most courts interpreted those words to cover things such as roads or power lines—projects owned either directly by the government or by private owners who have a legal obligation to serve the entire public, such as utility companies.

This limited understanding of “public use” predominated at the time of the founding, and also when the Fourteenth Amendment made the Bill of Rights applicable to state governments in 1868. “The despotic power, as it is aptly called by some writers, of taking private property, when state necessity requires, exists in every government,” Supreme Court Justice William Paterson, an influential signer of the Constitution, wrote in a 1795 case. “It is, however, difficult to form a case, in which the necessity of a state can be of such a nature, as to authorise or excuse the seizing of landed property belonging to one citizen, and giving it to another citizen.”

By the 1950s, however, the original meaning of “public use” had been largely abandoned. Legal elites came to believe that government planners should have nearly limitless authority to take property to promote growth and combat blight afflicting the urban poor.

The Kelo majority concluded that virtually any potential public benefit qualifies as a “public use”—even if the government cannot prove that the benefit will ever materialize. The development project for which the homes in New London were taken quickly fell apart, as critics had predicted. When the Connecticut Supreme Court, which heard Kelo before it reached the U.S. Supreme Court, upheld the takings in 2004, Justice Peter Zarella offered in his dissent the prescient warning that there was “scant evidence to suggest that the predicted public benefit will be realized with any reasonable certainty.”

Condemnations based on economic development and blight often harm the very communities they are intended to help. Since the 1940s, hundreds of thousands of people—most of them poor racial minorities with little political influence—have been displaced by such takings. Often their property has been transferred to well‐​off developers or other influential private interests. Victims of eminent domain often cannot even vote against the local politicians who authorized the takings. By the next election, they may have already lost their homes and been forced out of the community.

In addition to the direct destruction they cause, such uses of eminent domain impede long‐​term development by undermining America’s historically strong property rights—long an important incentive for investment.

All of this suggests that Kelo should be opposed not only by judicial originalists, but also by those who subscribe to “living Constitution” theories that emphasize the need for courts to protect “discrete and insular minorities” who cannot fend for themselves in the political process.

Although Kelo was a painful defeat for advocates of property rights, it led to important progress. The ruling generated an enormous backlash: More than 80% of the public disapproved of the court’s decision. The opposition cut across racial, partisan and ideological lines. Kelo was denounced by such unlikely bedfellows as Ralph Nader, Rush Limbaugh and the National Association for the Advancement of Colored People.

Since 2005, 45 states have passed laws reforming eminent domain. Some of these reforms, unfortunately, only pretend to restrict takings for economic development. Many states, such as Colorado and Texas, still allow eminent domain to eliminate “blight,” which is defined so broadly that almost any area can be condemned. Nonetheless, real progress has been made in numerous states, such as Arizona and Florida.

The debate over Kelo also broke the seeming consensus on “public use” among jurists and scholars. Before Kelo, most experts believed that the debate had been conclusively settled in favor of governments’ power to take property for virtually any purpose. No informed observer would make that claim today. Several state supreme courts have rejected Kelo as a guide to the interpretation of their state constitutions’ “public use” provisions.

Kelo and its aftermath are far from the end of the struggle to restore constitutional protection for property rights. But when future generations visit the park where the little pink house once stood, they may well remember this case as the end of the beginning.

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