Normally, I wouldn’t know or care much about the decisions of Supreme Court cases, but since Kelo v. City of New London has much to do with real estate, I’ve had an interest in it and have been following its progress. The decision was handed down today by the justices, in favor of the city. Now, I’m not a lawyer, but I’ve watched a few episodes of both Matlock and the version of Perry Mason in which Raymond Burr was grossly obese, so bear with me.
You can download a 58-page PDF document of the court’s opinion, but here’s the case in a nutshell. A redevelopment corporation sponsored by New London received approval to acquire private property in the area in order to raze it, then build a hotel, office space and other real estate designed to revitalize the area. Some homeowners refused to be bought out and challenged the condemnation of their houses.
All morning, the AP was running headlines for its Kelo coverage that read “Supreme Court Rules Cities May Seize Homes.” That certainly gets people’s attention and inspires some of them to load their shotguns to keep the guv’ment off their property. But it’s not the story and not even the juiciest part of the ruling. Newsflash: The Fifth Amendment already allows local governments to take private property—the house or apartment you may be sitting in right now—through eminent domain if they deem the land for “public use.”
What Kelo really means is that localities have even broader latitude for the reasons they give for taking private property. New London residents wanted a narrow definition of what constitutes “public use.” Bulldozing homes to build a new highway in order to reduce congestion, for instance, or to spruce up a ghetto, would be “public” enough and O.K. in their book.
But the city wanted, and received with the Kelo ruling, a broader definition of what constitutes a public benefit for a community—bulldozing homes to build a Wal-Mart, for example. That’s clearly not a public project, but the public benefit of such economic development would come in the form of more jobs and tax revenues. Now that’s the crazy part of Kelo if you’re not a fan of big business and generally ugly architecture. It’s what Justice Sandra Day O’Connor picked up on in her dissent, when she wrote that the decision means, “Any property may now be taken for the benefit of another private party.” But Justice John Paul Stevens noted that states will be within their rights to pass additional laws restricting condemnations if residents are “overly burdened.”