Taming Eminent Domain

We can harness backlash against eminent domain abuses in the aftermath of the Supreme Court's Kelo decision to bring about genuine community empowerment in the redevelopment process.

A black-and-white photo shows a community celebration, to illustrate an article about eminent domain reform.
In Baltimore, the Save Middle East Action Committee (SMEAC) held a celebration after a successful community meeting.

Not since the late 1960s has there been such a strong outcry against the use of eminent domain in urban redevelopment. On its face, the U.S. Supreme Court’s 2005 decision in Kelo v. New London merely reaffirmed settled law that federal courts will not interfere with state and local governments’ development plans that would compel private owners to sell their land at market price. Far from resolving the controversy, however, the Court’s apparent approval of the taking of Susette Kelo’s “little pink house” provoked a populist backlash that inspired a wave of state legal reforms aimed at curbing the use of condemnation for economic development purposes. People across America suddenly understood that they could be forced to move from their homes simply because a governmental redevelopment agency spotted an opportunity to make what it considered to be more productive use of their land. According to the Institute for Justice, the libertarian public-interest law firm that represented Kelo, 42 states have enacted some form of restriction on the use of eminent domain for private redevelopment since the Supreme Court’s decision in her case.

Even as the Institute for Justice’s Castle Coalition continues to champion total bans on any taking of private property for resale to private interests, other, more moderate, voices are now beginning to be heard. In California, Eminent Domain Reform Now, a coalition of homeowners, renters, and environmentalists, is proposing the Homeowners and Private Property Protection Act, a voter referendum that would prohibit the State of California and its local governments from forcing homeowners to sell their properties to private parties. This same coalition is working to defeat another ballot initiative that would not only ban economic-development condemnations of any property, occupied or vacant, but would also hamper environmental safeguards and eliminate rent control and other tenant protections. In Utah, where the state legislature had banned eminent domain for private development prior to the Kelo decision, the legislature has now modified that ban to allow the property owners affected by a proposed condemnation an opportunity to approve it by supermajority vote. As the debate moves beyond simplistic slogans, policymakers are beginning to focus on affording statutory protection to those most damaged by condemnation abuse and giving these would-be victims control over the redevelopment process.

Residents of America’s most deteriorated urban neighborhoods need intelligent, thoughtful reforms to transform eminent domain from an instrument of oppression to a means of empowerment. Instead of severing urban homeowners’ connections to the land and scattering residents to other areas, intensive urban redevelopment should enable community members to reshape their troubled neighborhood, confident that they will be able to be part of the redeveloped community. Homeowners should not be forced to sell their homes to facilitate a redevelopment plan until they have approved the plan. Even after the plan goes forward, those same homeowners and other long-time residents of the community should be given the choice of coming back to the redeveloped neighborhood or continuing their lives elsewhere. The struggles of one neighborhood in East Baltimore vividly illustrate the importance of these changes to transforming urban redevelopment into a process that truly rebuilds community. In the absence of these legal protections, residents of the impoverished East Baltimore neighborhood known as Middle East have had to fight City Hall to secure their rights both to renew and remain.

In 2002, Baltimore’s city government created East Baltimore Development Inc. (EBDI), a private-public partnership that included Johns Hopkins University and the Annie E. Casey Foundation. The city unveiled plans for EBDI to acquire and demolish 3,300 properties that make up the Middle East neighborhood and build new townhomes and a state-of-the-art life sciences research complex. EBDI’s proponents assured neighborhood residents that they would be paid more relocation assistance money than required by the laws governing federally funded projects that caused displacement.

Long-time Middle East residents did not have to be told that their neighborhood had desperately needed help for many years, the kind of help that could only come about through radical redevelopment. During the 1990s, a nonprofit effort in East Baltimore tried to buy up large blocks of vacant properties for rehabilitation. It ended in near-total failure. To their credit, the organizers of that community-development effort had understood the importance of renovating many properties simultaneously. Only an intensely coordinated investment could attract new residents to an area so thoroughly devastated by property abandonment and drug violence. They vastly underestimated, however, the challenge of acquiring the sites they needed from the seemingly limitless supply of vacant properties.

Difficulties in identifying and locating property owners and mortgage-holders made it difficult to begin land-purchase negotiations. The strategic bargaining by holdout owners and speculators who knew how badly the redevelopers wanted their vacant houses made it nearly impossible to close sales. To succeed, bold rehabilitation activity first would require the sort of strong acquisition efforts that involved the use of eminent domain. The question remained, however, as to whether or not an urban redevelopment process using eminent domain could be realized without repeating the callous displacement and community destruction that had characterized the urban renewal era.

Because the two largest entities behind EBDI, Johns Hopkins University and the City of Baltimore, were the same agencies that had presided over the community’s decades of decline, Middle East residents regarded their plans with a mixture of skepticism and hostility. To make their voices heard in the anticipated redevelopment process, residents formed the Save Middle East Action Committee (SMEAC) in 2001.

Rather than throw itself into a crusade to stop the redevelopment altogether, however, SMEAC worked to have residents included in every aspect of redevelopment planning and to guarantee that all residents be able to rejoin the revitalized community. Its volunteer members scoured the neighborhood, taking surveys door-to-door, to make sure every resident was afforded a chance to respond to the redevelopment proposals. It demanded regular meetings with, and accountability from, the leadership of EBDI. It organized protests of demolition activity that threatened the health and safety of those residents still waiting to be relocated. When the law afforded them protections, the resident members asserted those rights. When the law did not adequately protect them, they took their case to the court of public opinion through demonstrations, press releases, and even the production of a short documentary video.

Through its organized struggles, SMEAC has succeeded in making EBDI listen to the voices of the residents of Middle East as redevelopment and planning have moved forward. “Currently, our advocacy strategy takes us inside and outside EBDI,” says SMEAC executive director Nathan Sooy. “EBDI has created its own committees through which SMEAC responds to EBDI proposals and presents resident-generated ideas for change. But since these committees give residents no formal control over EBDI’s decisions, we have regularly been forced to take our grievances public through street protests and media coverage.”

SMEAC had also achieved its goal of giving displaced Middle East residents greater choice over where they wanted to live. “Back in 2003, SMEAC successfully pressed EBDI to remove its requirement that Middle East residents who accepted the nearly $70,000 in supplemented relocation assistance move into another struggling East Baltimore neighborhood,” says Sooy. Residents resented being told where they could live and feared that a subsequent redevelopment would force them to move yet again. Ironically, even with the supplemental relocation money increasing assistance to a level of up to $150,000, displaced Middle East homeowners faced having to take on additional mortgage debt if they wanted to buy one of the new homes being built in their old neighborhood. In order to allow residents the option of remaining in the newly redeveloped community on the same terms under which they had lived there before, SMEAC continued to press its “A House for a House” campaign in 2007. After two Baltimore Sun newspaper articles and many discussions, EBDI relented.

In early 2008, The Reinvestment Fund, a Philadelphia nonprofit working with EBDI, will be rehabilitating the first of at least 40 new homes in Middle East. When they are completed, displaced Middle East homeowners will be able to own them in the same way they owned their previous homes. “We are overjoyed that this new neighborhood will now include truly affordable homeownership opportunities, as well as low-cost rental properties,” says Donald Gresham, chair of the SMEAC board, himself a displaced homeowner.

The residents of Middle East have had to fight for the right to plan the redevelopment of their community. Even as the architectural drawings produced by that planning process showed beautiful new houses replacing blocks of deteriorated shells, they had to continue their struggle to secure the right to live in those new homes. Fundamental rights such as these should not depend on the political power or determination of the residents to win them. If eminent domain is ever to play its essential role in a just redevelopment of a severely deteriorated urban neighborhood, then the rights of residents to plan the redevelopment and remain in the redeveloped community must be guaranteed by law.

Two New Forms of Residency Protection

Two complementary statutory reforms are needed to enhance the protection of residents from eminent domain in urban redevelopment. For revitalization projects, these two protections together would create a land-acquisition, redevelopment, and relocation process that is not only workable but also genuinely constructive of community. First, resident landowners should not be forced from their homes by eminent domain until they have approved the redevelopment plan for their neighborhood. This Homestead Community Consent requirement would best be enacted as an amendment to redevelopment-planning requirements in the state statutes that give both state and local redevelopment authorities their power of eminent domain. In the case of Middle East, the Maryland statute that allowed Baltimore City to create EBDI and give it the power to take residents’ homes would be amended to require that the redevelopment plans of authorities like EBDI be subjected to the approval of affected homeowners.

In order to assure residents that they are planning a community for themselves and their long-time neighbors as well as new community members, a second legal reform should be enacted to support Homestead Community Consent. The U.S. Congress should amend the federal statute known as the Uniform Relocation and Real Properties Acquisition Policies Act of 1970 (“Uniform Relocation Act” or “URA”) to guarantee long-term residents of redevelopment areas the right to comparable replacement housing, not just in the metropolitan region, but in the new development. This federal Community Residency Entitlement, like its Homestead Community Consent state law counterpart, would apply only to redevelopment projects that use eminent domain to displace residents. It would not affect traditional invocations of eminent domain for core public needs such as the construction of highways or government office buildings.

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Homestead Community Consent

In restoring community autonomy without paralyzing the decision-making process, the Homestead Community Consent reform would foster a genuine dialogue between redevelopment officials and resident stakeholders. Although contemporary planners are steeped in group-facilitation techniques to make community participation in planning feasible, no amount of openness in communication style can create decision-making power where none exists. In order for resident planners to buy in, their approval must have more than mere public-relations value. It must be determinative of the plan’s authorization. Even if their sanction is not the only one needed, residents should not be forced to yield their individual homes until they themselves have envisioned and ratified the future of their neighborhood.

Although the approval vote requirement would give homeowners unusual authority, the discussion between officials and residents would not necessarily be one-way. While the homestead community would collectively control land resources vital to the project, the redevelopment officials would presumably control where and how to spend the financial subsidies for any project. If community residents were completely happy with their neighborhood’s present condition, they might, with one voice, tell the experts to go spend their money elsewhere. Indeed, a fundamentally healthy neighborhood may not need the use of eminent domain to bring about its revitalization. By adopting the Homestead Community Consent reform, state and local governments would eliminate the need to have a redevelopment agency justify the use of eminent domain by labeling a community as “blighted.” Homeowners in a severely distressed neighborhood will know better than anyone how much help their community needs. If planners approach them in the spirit of, and a legally binding commitment to, genuine partnership, these survivors will get to work on reconnecting their neighborhood to the city around it.

Because the Homestead Community Consent would give residents one collective veto rather than many individual vetoes, it would foster, rather than frustrate, collective action. The neighborhood would likely have individuals who refused to consider giving up their current homes even for a wide range of community improvements. But, if these benefits offered by the proposed redevelopment plan were badly needed and would benefit all residents, the holdouts would be out of step with the mainstream. Those who wished to engage in strategic bargaining for personal monetary gain would find little opportunity in a community-referendum process that focused on the neighborhood’s redesign.

By making resident approval essential to the land assembly process, Homestead Community Consent develops social capital, broadly recognized as essential to urban redevelopment. Although residents could express their views through elected representatives, the direct democracy approach of Homestead Community Consent draws upon community organizing’s roots in the labor movement. In Reveille for Radicals, Saul Alinsky wrote that “a People’s Organization can arise only from the efforts of the people themselves.” Redevelopment, by its nature, will drastically change a severely distressed neighborhood. Only if returning residents have themselves produced the new community will they be able to rejoin it and call it their own. Their inevitable conflicts and compromises with officials will only build their connection to the neighborhood vision for which they had to fight.

As Roberta Rubin explains in “Take and Give”, the Dudley Street Neighborhood Initiative’s combined emphasis on resident planning and community legal control of land resources has made the organization a model for community-based development in distressed neighborhoods. The Homestead Community Consent process, by enhancing and communalizing residents’ protection in urban redevelopment, creates a forum for this same kind of transformative conflict resolution. By giving residents a legal right to hold on to what they have, this resident-control proposal offers them an opportunity to let it go for something that is better and that is truly theirs.

Community Residency Entitlement

The Uniform Relocation Act was enacted in 1970 to ensure some minimum provision for those displaced by the federally funded use of eminent domain authority. Whether a highway, an office complex, or a mixed-income residential development forces resident condemnees out, they are entitled to benefit from the condemning agency’s required plan to facilitate their relocation to comparable replacement housing. These substitute homes not only have to be decent, safe, and sanitary, but also have to be located in the same metropolitan area, so that displaced people do not lose their jobs as well. But what about the relationships these neighbors have built with each other? If the current federal law can recognize the need to maintain a displaced resident’s connection to a particular job, why can it not also value the importance of residents preserving their links to one another and their community? Any federally subsidized private residential redevelopment availing itself of eminent domain authority should have to offer eventual relocation into onsite replacement housing.

The public need for the specific route of a highway and, thereby, for permanent displacement trumps the right of the resident to preserve his or her unique relationship to his or her home, the land, and the community occupying that land. The homeowner forced to make way for someone else’s private residence, however, receives no such justification. Much of the outrage against the Kelo decision can be traced back to its apparent endorsement of the government’s ability to force out one homeowner in favor of another, higher-income homeowner. Nothing about the public benefit in such a case is fundamentally incompatible with the resident’s right to permanent on-site replacement housing.

Truly comparable housing is not just about square footage and proximity to one’s place of employment. It also involves the ability to maintain community relationships developed over decades. For the more controversial uses of eminent domain, federal and state relocation should guarantee displacees the right to continue membership in their original communities. If the needs of such projects are not compatible with honoring such guarantees, then bargaining between the residents and the agency should be allowed to establish just compensation for the loss of community.

Even long-time residents of the neighborhood will value the right to return to the redeveloped community differently. For some, the transformed community, even if it includes many of their neighbors and features improvements that they approved, will just not be the same. Others may have been planning to leave the neighborhood anyway.

To facilitate productive planning, the Community Residency Entitlement amendment should allow redevelopment managers to offer residents money in return for voluntarily giving up their right to return to the redeveloped neighborhood. For instance, let us imagine a distressed neighborhood that had 300 long-term households — that is, all renters who have occupied their current homes for at least two years and all homeowners — in an area of 1,000 evenly distributed, identical row-house parcels. For example, suppose that planners have a resident-approved plan that uses 25 percent of the land for the expansion of a neighboring private university and reduces the density of the remaining land to 600 townhouses. Assuming that the project’s aspirations to attract higher-income residents limited the amount of housing that would be affordable to most of the original residents to 200 units, the planners could make buyout offers until they had purchased 100 Community Residency Entitlement releases.

City officials wishing to use non-exempt eminent domain for projects that offer even fewer benefits to the community, however, would apparently face an insurmountable barrier in the Homestead Community Consent phase. Residents of a neighborhood facing total elimination would not have to be irrational to turn down a redevelopment plan that flattened all their homes solely to make way for a big-box retail center to serve adjacent communities to which they may or may not relocate. There would be nothing in it for them, so there would be no reason to hand over their land. With the combination of these two proposed reforms, non-residential private redevelopers would have to pay for the privilege of permanent displacement.

Although the proposed Homestead Community Consent procedures would prevent city officials who favor the development from buying the votes of individual residents, they would still have a great deal of flexibility in timing the buyout of all the Community Residency Entitlement rights. For projects designed without a residential component, the planning process requirements should allow officials to include an offer to buy out 100 percent of the residents’ Community Residency Entitlement protections in the plan to be approved by the Homestead Community, as long as all residents holding Community Residency Entitlement were allowed to vote. If the offer were generous enough, the community would approve the plan.

Both the Homestead Community Consent and the Community Resident Protection processes require that redevelopment officials deal with residents’ shared concerns. If the redevelopment agency works with neighborhood residents to forge a plan that responds to their needs and expresses their visions of community, then the land assembly will be approved. The owners of homestead rights will release their holds on their individual properties without dissolving their relationship with either the neighborhood land or one another. The more the redevelopment plan places the agency’s other goals above the interests of the residents and small businesses, the greater the compensation the agency will need to offer.

Few federal programs have ever begun with more optimism and acclaim than urban renewal did more than half a century ago. The use of eminent domain in urban redevelopment to overcome the acquisition problems of major redevelopment projects did, and still does, make sense. Urban renewal, however, failed to differentiate between what money could buy and what it could not buy. Residents whose lives were threatened by urban renewal rose up and ended it.

Although memories of those struggles have begun to fade, the Supreme Court’s recent Kelo decision has rekindled public concern over eminent-domain abuse. Those committed to true community development should seize the opportunity this popular backlash presents. Resident empowerment in the redevelopment process will strengthen older communities. Furthermore it will attract an array of people and businesses to return to America’s urban centers, restoring the vital diversity which has been both their lifeblood and their most important contribution to world culture.

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James J. Kelly, Jr. is assistant professor of law and director of the Community Development Clinic at the University of Baltimore School of Law. Prior to joining the faculty at UB, he represented tenants and community groups in New York and Baltimore.

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