Eminent Domain, Property Rights and the Results of Government Theft

The other day, I wrote about the most recent development in what can best be described as the Kelo Affair – about how the government decided to take people’s homes not because of blight or because the buildings were fit to be condemned, but because politicians decided they knew it’d be better to transfer the land to someone else.

Consequently, where once stood a neighbourhood now stands a vacant lot.

Today, in New York, the courts have struck another blow against property rights and liberty.  The use of eminent domain to facilitate the Atlantic Yards development has been upheld by New York’s Court of Appeals.  This means that, thanks to the appropriation of private property, the New Jersey Nets will have a new arena.

After I wrote about Kelo, Richard Albert was kind enough to send along another viewpoint on the situation.  Thomas Merrill, a law professor at Yale, writes, in part:

Those who support urban redevelopment efforts will say that the very controversy generated by the Kelo decision and the artificially hyped political backlash are what killed off the New London project. The New London project was designed to capitalize on the Pfizer project, not to induce it. And it included a number of traditional public uses, like a marina, a walkway, a proposed Coast Guard Museum and public parking for the museum and the adjacent Fort Trumbull park.

Now, the entire project appears to have collapsed, leaving an eyesore. The economic downturn has much to do with this. But the expense and delay of litigation over the use of eminent domain and the negative publicity associated with the political backlash were surely significant contributing factors, as they surely were in Pfizer’s decision to pull out. So the legacy of the anti-eminent domain crusade, at least for New London, is a vacant Pfizer building and a desolate plot of ground next door.

I do not believe that this sad episode means we should overturn Kelo and ask federal judges to arbitrate questions about when eminent domain should be used. The solution is not to nationalize eminent domain, but to localize it. If a proposed project is one that will have primarily local benefits — like economic development — then local citizens should decide whether to pursue it, not some state redevelopment agency or the governor’s office.

Richard was wise to send this to me, as he knows that empowering local governments is a cause close to my heart, and, thus, I agree that eminent domain is generally best employed by local government.  However, Prof. Merrill’s argument doesn’t quite sway me.  Any backlash, however dismissively described, must be considered when invoking eminent domain.  Whatever the intentions of a government, we can’t assume that they will be realized.

If you are wondering why I am so fixated on issues involving eminent domain, it is because they hit very close to home, literally.  I currently live blocks away from Lebreton Flats – some fields in the heart of Ottawa that have been home to little more than a transitway, some gravel parking lots and snow piles for the last forty years.

Recently, development has been started.  A few years ago, Canada’s War Museum was relocated to a new building in Lebreton Flats.  More recently, a condo development has opened.  Plans are in place, and these should just be the first steps in creating a new community adjacent to downtown.  Until a few weeks ago, I had no idea that this would not be the first community at Lebreton Flats.

In the mid 19th Century, a community grew in Lebreton Flats.  It was a mixed residential area that supported Ottawa’s lumber industry.   It was destroyed in the Great Fire of 1900, but was rebuilt and would survive for another six decades.  It would survive until local and federal governments decided it should be razed.

It survived until governments decided they had a better use for it than the residents.

It survived until politicians decided they did not want a blue collar neighbourhood within site of Parliament Hill.

Development has finally started again, half a century after the previous residents were evicted, but the development is not without controversy.  The government has meddled in the sale of Lebreton Flats and has gamed the system to benefit a favoured corporation.  By the time the corruption was caught, no other entity was interested in developing the land.  Rather than allowing the public to shape their own city, politicians have forced a sub-optimal development plan on Ottawa.

Everyday, I walk by Lebreton Flats.  I walk along it while I go to work.  I walk through it on my way to church.  I see it every time I go downtown.  I see it every time I drive anywhere.  The life of Lebreton Flats is gone.  The few blocks that survived are now considered a heritage district.  This distinct and thriving neighbourhood, born before our nation, is a ghost.  This part of my beloved home town has been stolen from me, and everyday I am reminded of the theft.

In the wake of the most recent news of the Kelo Affair, Alex Tabbarok wrote, “Those who would sacrifice property rights to development end up with neither.”  I submit that Mr. Tabbarok is being optimistic if he thinks that is all that we would lose.