Ten years ago, on June 23, 2005, the United States Supreme Court dropped a judicial thunderbolt in Kelo v. City of New London. By a narrow five-to-four margin it rejected a spirited challenge that Susette Kelo and her neighboring landowners had raised against the ambitious land-use development plan put forward by the City of New London, Ct. The formulaic account of the holding is that a local government does not violate the “public use” component of the Constitution’s takings clause — “nor shall private property be taken for public use, without just compensation” — when it condemns property that will be turned over to a private developer for private development. Under the logic of Justice John Paul Stevens, so long as there is an indirect promised public benefit from the development process, the public-use inquiry is at an end, and Ms. Kelo can be driven out of her pink house by the water.
Ten years later, my reaction is the same as it was at the time: truly horrible. Justice Stevens and the Supreme Court were tone-deaf as to what moves people in dealing with property. Of all the cases decided since the year 2000, Kelo may not be the most important; ironically, it certainly was not the most controversial. But hands down, it was the decision that got more people indignant than any other.
Anyone who wants to get a sense of the process would be well-advised to real Ilya Somin’s new book, The Grasping Hand, which offers a painful blow-by-blow account of how good intentions for redevelopment were so badly misdirected that ten years later the seized property remains empty. Perhaps the only nice feature about the case is that Ms. Kelo’s pink house was whisked away to another site, so that the newly vacant land can be used to collect debris that washes up on the shore. Yes, the grandiose development plans for the Fort Trumbull neighborhood never got to first base. As it turned out, New London was too slow off the mark, other communities built the ancillary facilities that Pfizer wanted, and the company pulled out of New London once the tax subsidies ran out.
And they are right. The Constitution should not be the only restriction on the use of the takings power. It is one thing to knock someone out of a home, and quite another to tell a landlord that he is duty-bound to transfer his interest to his tenant in possession in an exchange that the state will enforce only after the tenant ponies up the cash to the state to work the condemnation. Yet this blatant violation of the public-use clause received its judicial blessing in Hawaiian Housing Authority v. Midkiff, a muddy 1984 decision in which Justice Sandra Day O’Connor concocted an indirect benefit that justified the coerced transfer — the need to eliminate supposed “oligarchy” in the Hawaiian housing market, which could have been done quite easily by opening up more restricted agricultural land to urban development. Doctrinally Midkiff was no better or no worse than Kelo, and to her credit, Justice O’Connor backed away from Midkiff in her Kelo dissent.
Yet back in 1984 the public yawned. Taking land from the Bishop Estate, a charitable trust, was, for many populists at least, a delicious prospect. The Left/Right coalition that formed in Kelo could not coalesce around the earlier case, which did not resonate with the public at large.
So what should have been done in Kelo? Here the deep irony is that Justice Stevens did not have to tempt the devil. In general, my own view is that master plans are often too ambitious for their own good, much like those vaunted Soviet-style five-year plans. But often the ingredients are there. Such was evident in Kelo, where the introduction of a major $73 million subsidy from the state to the city had to be spent lest it be lost. So the impulse is to move first and think later, which is what the city did when it condemned the entire 90-acre Fort Trumbull development site before any concrete plans were in place. Remove the subsidy and perhaps New London would have been content to plan today and condemn tomorrow, when matters got closer to realization.
On the facts of that case, a possible halfway house would have been to condemn the land at the center of the development site immediately and leave the peripheral takings until later. Judicially, that is what the Connecticut trial judge decided when he spared Ms. Kelo’s plot because it was not in the path of any planned development. But hubris is in far greater supply as one moves through the court system, so that the Connecticut Supreme Court had such confidence in the city’s planners that it thought maximum flexibility was needed for effective planning. Had that court simply affirmed the decision below, Kelo would never have reached the U.S. Supreme Court and the entire incident would have faded away.
Some state courts, and some state legislatures, have tried to clip the wings of the decision, but even that has been a hard battle.
Yet, once it was decided, the outrage did not subside. Since that time, the Supreme Court has ducked the issue, even though some local governments have done things just as foolish and unnecessary as what the city of New London did. Some state courts, and some state legislatures, have tried to clip the wings of the decision, but even that has been a hard battle. It is difficult to get anyone to attack general planning for economic development, because sometimes in blighted communities it actually works. But “blight” can easily become a term of art, so that weeds in the garden may trigger a government takeover.
All this is not to deny that Kelo has had its effect, for surely it has, but chiefly through the medium of public opinion, which has tended to make it politically more costly for governments to condemn the property of their own citizens. It is so much easier politically to get local governments to rally support to zone out people they don’t want in their communities. Kelo was a big deal, and it will remain in the consciousness of the American public for years to come. Zoning is a bigger deal, and the same misguided progressive impulses that led to the rise of central planning on steroids are still dominant in an area that needs its own Kelo-like fiasco to get the public attention that it so richly deserves.
— Richard Epstein is the Laurence A. Tisch Professor of Law at New York University School of Law, the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution, and the James Parker Hall Distinguished Service Professor of Law Emeritus and Senior Lecturer at the University of Chicago.