Remember Eminent Domain? The Journal Does

Good for The Wall Street Journal for putting eminent domain back in the news. We haven’t heard much about the issue lately, especially since the Kelo decision is four years old now and private development has come to a virtual standstill.

But the downturns are probably the only time when real change can be effected. In boom times, cities and states have a surfeit of development opportunities and it’s hard to push back against developers and their campaign contributions.

It’s an off-the-news story (bravo, WSJ!), but here’s the nut:

But in many states the effort to blunt the impact of the Kelo ruling has proven elusive, say some property-rights advocates and academics. The problem, they say, is that many states still authorize the seizure of property that is deemed “blighted,” a term often defined so broadly that it enables “virtually any property to be condemned,” says Ilya Somin, a professor at George Mason University School of Law.

As a result, property-rights advocates say, states should adopt legislation that redefines blight. “It should be confined to true nuisance properties that pose a direct threat to public health and safety,” says Scott Bullock, a lawyer for the property owners in the Kelo case.

I can tell you I’ve seen lots of instances of “blight” being abused, having covered commercial real estate for a few years and having had a wife go through urban-planning school. It’s often used by governments to get what they want—and when I say “they,” I mean developers. This isn’t used to justify building bridges and hospitals and the like. It’s often used, wrongly, to clear the way for condo developments and shopping malls.

Audit Developer Dean Starkman and I have (*) both written quite a bit about the eminent-domain issue for the Journal.

As I wrote in the story in the second-to-last link above, blight rulings are often justified. But a handful of bad blight rulings mean the government is abusing someone’s rights to hand their property to somebody else—usually a richer somebody else. Some in Texas are trying to define “blight” more carefully to prevent abuse, the Journal says:

Marvin Rosenbaum, whose family runs a bus company in El Paso, supports the proposed Texas measure. In 2006, he says, he learned that one of his company’s bus terminals was in a broad swath of downtown El Paso that was declared blighted, as part of the city’s effort to revitalize the area with condominiums, hotels and stores. “We aren’t blighted at all,” Mr. Rosenbaum says. “Blight should be determined parcel by parcel so that you don’t suffer due to the neglect of others.”

One problem here is that it appears the Journal didn’t let the reporter, Nathan Koppel, travel for the story. There’s no dateline on it, at least. You never know what you miss out on when you don’t get to go on site.

But that’s mostly a quibble. This issue needs to be spotlighted, and I’m glad the Journal does so.

*”Take and Give: Condemnation Is Used To Hand One Business Property of Another —- Tactic by Local Governments Seeking Jobs and Taxes Is Protested as Unfair —- BMW Yes, Mitsubishi No,” By Dean Starkman, 2 December 1998

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.