Friday, June 24, 2005

Dark Day For Property Rights

The Supreme Court handed down an infuriating decision yesterday on an eminent domain case. In a 5-4 decision, the Court upheld the right of local governments to act on behalf of one private entity to take land from a private property owner under the aegis of eminent domain.

The Wall Street Journal correctly calls this the reversal of the liberal Justices' championing of the little guy. WSJ story. George Will hoped that for once, judicial activism would benefit the conservative, and the Court would finally put a leash on local governments. George Will's column.

These aren't takings using eminent domain for public uses such as roads, sewers, or bridges. These are takings for private developers, who will eliminate residential housing in order to put up a Wal-Mart or a strip center. The rationale? The Wal-Mart or shopping center will create more tax revenue and jobs than a block of residences will.

It's all about governmental greed. Feed the tax coffers- at any price. The ends justify the means.

This should scare the daylights out of any property owner in an area in transition. If you own a home or an office building in an area that is ripe for re-development, you might have been excited in the past for the possibility of a profitable sale. No more. If the developer eyeing your land doesn't like the price you demand, he can now just go to the city and ask for the use of eminent domain, and they can then take your land- as backed up by the Supreme Court's decision.

It should scare you because there is always a developer out there who is bigger than you, and the bigger the developer, the more likely he is to have political clout. Heck- you could even own an incredibly profitable building that pays taxes out the wazoo, but if a developer comes along with a plan for a building three stories higher, he might win the day over you on the basis of a few more dollars for the tax roll, and a few more jobs than you currently offer.

If you thought laissez-faire capitalism was dog-eat-dog, wait till you get a load of government backed eminent domain involved in business.

The Institute For Justice were the good guys in this case, fighting in defense of the homeowners. When it comes time to make a charitable contribution, please keep them in mind.

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