Revisiting the Kelo decision

The Kelo decision was enormously unpopular, with polls showing that between 80 percent and 90 percent of Americans disagree with the idea, even when property owners received market value for their land. Still, that hasn’t stopped the politicians and urban planners, who moved in quickly. In the first year after Kelo, according to a study by the Castle Coalition, which tracks eminent domain seizures, state and local governments condemned or threatened to condemn more than 5,400 properties, compared to slightly more than 10,000 such actions in the previous five years. In the eminent domain business, a threat to condemn is usually just as good as an actual taking, since a homeowner can’t sell a house under those conditions and a business would find it difficult to do things like get credit.

Pols Remain Masters of Domain

Most Americans object to such takings because the intended uses of the land don’t justify violating property rights when the owner is unwilling to sell to government. But as Jacobs observed, another important objection is that government planners often do a lousy job of anticipating the marketplace when they take property to be developed into something new. What I call mega-project ‘state capitalism,’ the grandiose schemes of politicians and their planners to invest public money in big projects like stadiums, downtown super-malls, and subsidized entertainment districts, has been on the rise for years, often with disastrous results which should have given the Supreme Court justices pause before they gave their blessings to seizures that "provide appreciable benefits to the community."

Indeed, the very redevelopment project that sparked the Kelo lawsuit, an effort by the town of New London, Ct., to turn its Fort Trumbull waterfront into a haven for high-priced homes and 21st century jobs, has sputtered. The ground where Susette Kelo’s home stood is now barren, because the townhouses that the city-sponsored developer was supposed to build there have never gone up. Interest in the area isn’t very great and the developer hasn’t been able to get financing. In fact, what began more than a decade ago as an extravagant ‘public-private’ scheme to redevelop this whole area around tourism, research and development and luxury residential uses has produced little except ongoing construction on a $17 million Coast Guard station.

State capitalism provides more examples of losers than winners.

The result has been a disaster for the taxpayer.