Monday, January 31, 2005

What's the "Use"?

The Fifth Amendment of the U.S. Constitution forbids that "private property be taken for public use without just compensation." But what constitutes "public use"? The Supreme Court stands ready to decide that question via the case of Kelo, et al. v. New London, Conn., et al., 843 A.2d 500 (Conn. 2004), cert. granted, __ U.S. __, 125 S.Ct. 27 (Sept. 28, 2004).

In Kelo, as in many other such controversial cases, government authorities want to seize private homes not to build a park or highway, but rather to hand over the property to other private parties. The government thus serves merely as an intermediary—sort of like a real estate agent waving a gun. The city of New London means well, of course. It argues that certain of its citizens, by refusing to sell their homes, stand in the way of private development that will lure richer residents and raise more taxes. Hence the question certified in Kelo: "What protection does the Fifth Amendment's public use requirement provide for individuals whose property is being condemned, not to eliminate slums or blight, but for the sole purpose of 'economic development' that will perhaps increase tax revenues and improve the local economy?"

Admittedly, I don't specialize in Fifth Amendment law. I'm more of a Third Amendment kind of guy. Still, though, I cannot but think that the Supreme Court will strike down the "economic development" rationale for takings. I don't say that only because the very able attorneys of the Institute for Justice represent the homeowners in Kelo (though that certainly helps the odds). I say that because I think the Supreme Court must recognize that "public use" will have no meaning at all if government authorities can justify takings on the basis mere speculations about "economic development."

But one thing troubles me. What can those who criticize the "economic development" rationale for takings offer by way of an alternative? Suppose, for instance, that a city takes private property for a park. Can the city never thereafter sell that property to a private party? Surely not. What, then, prevents a city from taking the properties at issue in Kelo, holding them as vacant lots for a year, and then transferring them to private developers? That question will surely arise in Kelo's oral arguments.

Allow me a stab at an answer. If public use means anything, it must mean more than simply that government officials take title to private property that they take. Moreover, it must mean more than that they simply hold onto that property for some period of time. The public gets no "use" out of a vacant lot. Rather, the Fifth Amendment's "public use" requirement means that government officials must actually turn taken property into a public park, a public highway, a government office, or similar facility dedicated to public purposes.

That requirement satisfies both the plain language and the policies of the Fifth Amendment. I won't belabor the language side of the argument. As I noted, "use" in "public use" has to mean something. I thus argue that it means not mere "welfare" or "benefit" but rather "function" or "employment."

On the policy side, understanding "public use" as "public function" puts a necessary brake on using the Fifth to force transfers between private parties. Government officials must remove property from the tax rolls, even if only for a few years. That alone will give them pause. That government officials will in most cases have to improve taken property to make it suitable for public functions will also curb inappropriate takings. Once officials have had a school built on taken property, for instance, they will not lightly sell it to Costco. Furthermore, knowing that it takes time even to build merely a public park, Costco will no longer approach cities asking that they use eminent domain to shortcut all that bother with consensual and wholly private real estate transactions.

Statists will counter that my reading of "public use" puts sharp constraints on taking. Right! That shows the argument's virtue. Sharp constraints equate to clear and real constraints. As things stand now, takings law imposes only soft and fluffy limits on government officials. Citizens don't stand a chance in that sort of legal pillow fight. They need legal swords to fend off state power. Reading "public use" to mean "public function" will give the Fifth Amendment just the sort of edge that it requires.


Sub Specie AEternitatis said...

Reading the actual text of the Fifth Amendment's prohibition suggests a different analysis:

"nor shall private property be taken for public use, without just compensation."

If a taking is not for public use, the prohibition is entirely silent on the matter. In other words, a taking not for public use isn't barred by the Fifth Amendment. To the contrary, once a taking is not for public use, the government doesn't even have to pay just compensation!

The host of this blog, in addition it is sad to say most courts, misread the amendment as if it said that "private property shall not be taken except for just compensation and public use."

Tom W. Bell said...

Sub: Should you want a purely textual explanation for the ban on taking private property for private use without offering any compensation, you need to read the 5th together with the 9th. The latter ensures that, absent a specific grant of power, federal (and thanks to the 14th, also state) officials have no right to take private property at all. The 5th represents an exception, and as such does not allow any takings for private use.

Gregory Newman said...
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Gregory Newman said...
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Gregory Newman said...

Professor Bell:

I agree with your reading of "public use" and believe it offers the best and most logical criterion upon which to restrict the seemingly unfettered 'right' of government to take private property. The public policy rationale for granting such expansive powers to the government is,in my opinion, no longer as convincing as when the expansion of government power began, back in the early 20th century.

In Euclid v. Ambler Co., 272 US 365 (1926), the Court held that if the validity of legislative classification for zoning purposes be "fairly debatable," the legislative judgment must be allowed to control. This deference to state legislatures, together with the Court's additional holding that any zoning ordinance must be "clearly arbitrary and unreasonable and without substantial relation to public health, safety, morals, or general welfare" before it can be declared unconstitutional, greatly expanded the power of state and local governments to shape our nascent urban areas in ways that met important national goals, even though in the process the government may have trampled upon the rights of some landowners. I concede that this policy proved effective at achieving several important national goals, including but not limited to maximizing the economic productivity of a given municipality.

And these national goals may still be relevant. But where a city has been built, reached maturity and is in decline, I believe the argument that 'revitalizing' a city is in the public interst is not nearly as compelling as the argument in favor of building that city in the first place.

The balance must shift back in favor of the rights of private landowners to determine the best use of their property. Imagine the situation in Kelo from a 'market forces' perspective. If the re-development of a large tract of land is economically attractive to a private developer, he may approach private landowners with an offer to buy their land for his development. They may accept, if the offer seems attractive. And, if the local municipality sees value in the re-development, it may offer those landowners incentives, such as a tax break, etc., to sell to the developer. In this way, market forces are allowed to guide land use, not policies created by well-intentioned but necessarily narrow-minded bureaucrats.

gt said...

I think you misunderestimate how a vacant lot becomes a park. They go out, put up a sign that says "park." Or "open space buffer zone" or "wildlife preserve" and voila.