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The State of Post-Kelo Reform - Final Rejoinder to Bert Gall:

Bert's most recent criticism of my analysis of post-Kelo reform focuses on one major point: that the majority of post-Kelo reforms have been effective in curbing eminent domain power. While Bert is right to note that important progress has been made since Kelo (a point I never contested), he still paints a rosier picture than is justified by the evidence.

Even with the recent passage of what I agree are effective reform laws in New Mexico, Virginia, Wyoming, it still remains the case that 22 of the 43 reform laws enacted by 38 states and the federal government have been largely ineffective, in the sense that they impose no meaningful new constraints on the power of government to condemn property. This total includes the forty laws analyzed in my paper, plus the three passed in recent weeks, but excludes one or two ineffective laws passed in the aftermath of Kelo, which have since been superseded by effective ones (e.g. - in Alabama). Far more important than the raw total of effective and ineffective laws is the fact (noted in my previous post, as well as in my paper), that very few of those states that engage in Kelo-style takings the most have enacted effective reforms. Even after Virginia's recent enactment of an effective reform law, thirteen of the twenty states that recorded the most private-to-private condemnations from 1998 to 2002 according to an Institute for Justice study have enacted ineffective reforms or none at all (see Table 5 of my paper). This is also true of fourteen of the twenty states with the highest numbers of "threatened" condemnations for private owners, according to IJ (ibid., pg. 44). To understand the true state of post-Kelo reform, it is essential to recognize that many of the strongest new laws have been enacted by states with little or no record of eminent domain abuse to begin with. Tellingly, two of the three most recent states to enact effective reforms (Wyoming and New Mexico) recorded no condemnations for private development at all, according to IJ. For example, IJ described New Mexico as:

. . . one of a handful of states that have no reported condemnations for private parties between 1998 and 2002. Its local governments have respected constitutional limits on government power, and home and business owners can feel secure in the knowledge that their rights in this area will be respected.

By contrast, several large states with extensive records of abuse - including California, New York, New Jersey, and Texas, among others - have enacted either no reforms at all or ineffective ones. Reforms in states with little or no preexisting record of abuse are not completely useless. Such laws do serve to prevent future abuses, even if the possibility of such is slight. However, they cannot make up for the lack of success in most states with records of serious abuse.

Bert lists 20 states that have enacted reforms restricting the definition of "blight." I agree with him that such limits are extremely important, and have argued for their necessity myself. In fact all but three of these states (Utah, Wisconsin,and South Carolina) are listed as states with effective reforms in my paper. Of the exceptions, Utah is not included because it passed a law forbidding blight condemnations even before Kelo was decided, so its law is not part of the Kelo backlash proper; indeed, as the Institute for Justice recently noted, Utah has just engaged in some backsliding from its pre-Kelo achievements. On Wisconsin and South Carolina, I stand by the analysis of these two states' laws in my paper. The issues are technical in nature, so I will not go into them in detail here, though I may do so in a later post if there is enough reader interest in the subject. Bert also mentions the Colorado law (whose effectiveness he defends to a limited degree). He is right to note that the law eliminates judicial deference to local governments' determinations of blight, but wrong to suppose that this will make a big difference. As I explain in my paper (pp. 16-17), Colorado's definition of "blight" is so broad that virtually any area can be declared blighted, whether judges are deferential or not.

As I noted in my previous post, it is still not clear how many state laws Bert and I actually disagree about. Depending on how one interprets his posts, the figure may be as low as three (Wisconsin, South Carolina, and - to a lesser degree - Colorado). It is also not clear whether he accepts my conclusion that most of those states with the worst abuses have enacted ineffective reforms or none at all. Bert does seem to question with my view that political ignorance is a principal reason for the large number of ineffective reforms, but does not present any alternative explanation or explain why mine is wrong.

I end on this point of agreement between us: Bert is undoubtedly correct to say that there has been significant progress, and he is also right to note that "proponents of reform shouldn't declare victory and go home."

David Sucher (mail) (www):
"Far ,more important than the raw total of effective and ineffective laws is the fact (noted in my previous post, as well as in my paper), that very few of those states that engage in Kelo-style takings most have enacted effective reforms."

Is there a superfluous (and confusing) "most" in this sentence?
4.14.2007 6:50pm
Ilya Somin:
Is there a superfluous (and confusing) "most" in this sentence?

No, just a missing "the," which I have now inserted.
4.14.2007 8:29pm
joe (mail):
IIya, although you point to CA, NY, and NJ as states who are supposedly friendly to eminent domain condemnations and takings by large private developers, the facts counter your position. Those three states are among the most hostile to new commercial development, especially in places where existing development has occured in their major cities. Zoning and environmental laws in these states make it difficult to build new properties even though there is great demand.

As a result, property prices have gone through the roof and housing affordability has reached a crisis. Land prices have soared in CA, NJ, and downstate NY primarily because new development takes an inordinate amount of time and money. If condemnation were as easy as you argue then there would be no need for subsidized public housing and rent controls.
4.14.2007 11:05pm
David Sucher (mail) (www):
I don't think there is any inconsistency between a polity which
1. has severe legal restrictions on development
2. yet allows favored developers to use condemnation to assemble land for politically-favored projects.

In fact, they might go together very well.
4.15.2007 12:19pm
Gideon Kanner (mail):
David Sucher got it right. That is certainly true in California, where the Legislature has put some restrictions on all redevelopment (as noted in the Kelo majority opinion) even before the post-Kelo flap. Pure "economic" redevelopment was illegal in California even before then. That was the Cal. Supreme Court's Sweetwater Civic Ass'n v. City of National City case of some years ago, and a couple of more recent Court of Appeal cases (Santa Ana, Mammoth Lakes and Diamond Bar).

NIMBY resistance to Big Box stores in California has been via land-use regulations, not defeat of eminent domain actions by redevelopment agencies (but see 99 Cents Only Stores v. City of Lancaster, a rare federal court decision barring the condemnation of a competing store for the benefit of COSTCO, as a pure private-to-private, impermissible transfer).

But don't let that fool you. There is more than one way to skin a cat. The way it is done in California is that once a redevelopment plan is adopted, property owners within the project areas have a small window (30 or 60 days) to challenge it in court by a special; validation proceeding. Sometimes the redvelopment agency preempts the owners and files such an action itself. If no such action is brought or if the plan is not invalidated, it becomes final as to all parcels designated in the plan and lack of public use may then not be raised as a defense in the eminent domain action when it finally comes, often years later, unless there has been a material change in the plan. Most people have no idea that they need to sue in this fashion, in spite of a legalistic notice they get in the mail, so usually, the bad guys get to do their thing by default.
4.15.2007 3:39pm
David M. Nieporent (www):
If condemnation were as easy as you argue If politicians had taken economics classes then there would be no need for ... rent controls.
Fixed it.
4.16.2007 8:34am