[Nicole Garnett (guest-blogging), February 13, 2007 at 3:03pm] Trackbacks
Takers May Minimize Undercompensation by Not Taking High-Value Properties

In yesterday’s post, I suggested that a failure to consider the role of non-judicial actors (“Takers”) in the eminent domain process may have led legal scholars to overstate the undercompensation problem. A number of the comments following the post assume, incorrectly, that I think that fair-market-value compensation will fully indemnify owners. I agree that a fair-market-value award will often result in undercompensation. What my article argues instead is that scholars mistakenly focus exclusively on the constitutionally mandated measure of damages in an eminent domain action and disregard extra-judicial means of minimizing the undercompensation risk.

Academic discussions tend to assume that there are two ways to minimize the risk of undercompensation. The first is substantive limits on the use of eminent domain. The second is above-market compensation. As I will discuss in my posts tomorrow and Thursday, many owners probably do receive more than the fair market value of their property — because they are entitled to substantial relocation assistance, because they settle on above-market prices during mandatory pre-condemnation negotiations with Takers, or both.

The literature overlooks third way that Takers might minimize uncompensated losses — simply avoid taking properties with high subjective value. The complete lack of attention to this dynamic is unsurprising, but unfortunate. It is unsurprising because the government usually owes a property owner nothing until it takes her property — which is why most of the “takings” literature concentrates on discerning when a taking has occurred, rather than how much is owed once it has. It is unfortunate because the government’s plans frequently are flexible: it can pursue policy objectives by various means, and, in the eminent domain context, with different parcels of property.

My article uses a historical case study — the preservation of Catholic churches along Chicago expressways — to explore how Takers can exercise this flexibility to minimize subjective losses. Over two dozen Catholic churches line these expressways. Driving through the city, it is easy to forget that these churches once served as the spiritual and social hearts of neighborhoods now buried under fourteen lanes of concrete. When the expressways were built in the mid-1950s, over two million Catholics lived in the Archdiocese of Chicago, more than half of them in densely populated urban neighborhoods like the ones dissected by these freeways. Yet, while expressways displaced thousands of parishioners, only five Catholic churches were destroyed. Planners assiduously avoided the Archdiocese’s four hundred other churches.

At one point, the Department of Public Works announced plans to reroute the Kennedy Expressway through St. Stanislaus Kostka Church and school. This proposal enraged Chicago’s Polish Catholics — the Archdiocese’s most important ethnic minority. If, as historians argue, the national parish was “the most important Polish-American institution,” then St. Stanislaus Kostka was the most important national parish in the most Polish of all American cities. The parish website claims that St. Stanislaus was, at the time, “the largest parish in the United States, if not the world, with 8,000 families, totaling 40,000 people” and that it remains “the mother Catholic Church of Polish parishes.” The Polish community quickly organized to oppose the demolition. Cardinal Stritch personally approached the Governor of Illinois, and the expressway was rerouted. The freeway bend around St. Stanislaus is evident on Google earth or any navigation system. (Address for curious readers: 1351 W. Evergreen Ave., Chicago, IL.) According to historian Steven Avella, expressway routes were altered at least three other times to preserve the geographic integrity of parish boundaries.

The fact that highway planners in mid-twentieth century Chicago avoided demolishing Catholic churches is hardly surprising. Neil Komesar has described a “two-force” political model, in which democratic actors are prone to both majoritarian and minoritarian biases, leading to both the “fear of the few” and the “fear of the many.” In Chicago, the individuals who rallied to save expressway churches were, in a sense, both the few and the many. Catholics made up a majority of the City’s voters, and certainly Democratic voters. The city’s powerful Irish Catholic mayor, Richard J. Daley, undoubtedly preferred, when possible, to avoid disrupting the spiritual lives of thousands of co-religionists (who also happened to vote Democratic). Indeed, Mayor Daley was the chair of a Transportation Advisory Group which, in the mid-1960s, issued guidelines indicating that “parish boundaries” should be considered when determining freeway routes.

Majoritarian clout is not the sine qua non of successful political advocacy, however. Another important lesson of the Chicago expressway churches may be that high subjective values may correlate with successful efforts to prevent takings. Subjective attachment provides an incentive to oppose takings and increases the intensity of the opposition. While the episodic nature of physical takings may disadvantage property owners in the political process, public-choice theory also teaches that political actors are particularly responsive to cohesive, well-organized and narrowly-focused coalitions like those that characterized parish-preservation efforts. Just as the subjective value that Catholics attached to parishes undoubtedly increased the intensity of the focus of church-preservation efforts, so also did the affected communities’ cohesiveness reduce impediments to organization.

We need to know more about pre-condemnation planning, but the story of Chicago’s expressway churches provides an opportunity to reflect whether, and when, political actors can be expected to refrain from the use of eminent domain. Assuming that many Takers will reasonably prefer the path of least resistance, the planning process itself might minimize the risk of undercompensation. It will zero it out, however. Indeed, the political process may have the troubling effect of shifting the problem to disorganized, politically powerless owners. Judicial review and/or above-market compensation is needed to protect them.