Sunday, June 26, 2005

Not Showing Contempt for the Court - Trying Hard to Conceal It

This Thursday the Supreme Court issued one of its most damaging, ill-conceived decisions of the last half century. The Court just expanded Eminent Domain past all reason and gave away everyone's home and land to the wealthy and the politically connected. Until a few days ago the government had the right to condemn property and appropriate it for public use. Roads and railways have to go somewhere. Schools must be built. The military needs bases. Governments could condemn the property, pay the owners and renters the fair market value and lay asphalt or put up buildings.

In New London, Connecticut the city council gave over a working class neighborhood to a private developer who plans to build offices for Pfizer. Susette Kelo fought the government for the right to keep the lakefront home she'd always dreamed of. She lost in her state's highest court and appealed to the nations highest court. Two days ago the Supremes ruled that "public use" includes "raising property taxes". If a proposed use might raise more taxes or bring in a business a government can condemn your house or business and sell it to a developer.

Think about it for a moment. Suppose you plan ahead a little and realize that the land you bought will be next to a highway or airport some day. You suck up the taxes, sit on it and wait to sell at a profit. Not any more. If a developer says "I can put something here that will make money and pay more property tax than this putz" he has first right to your land. Up until this week I thought real estate was a good investment. Now I won't touch it with a big stick and rubber gloves. As soon as the big boys decide they can make money all it takes is a quiet word with the county commissioner. Then you accept their low-ball offer or take whatever the county decides to give you. Which will certainly be less than you could make by waiting and selling it when the time was right.

If your family saved and bought a house with a good view you're out of luck. A rich person with a few connections can own it by showing that his new house will have higher property taxes and cutting a deal with the city to declare your area "blighted". That's more or less what happened in Lakewood, Ohio. The mayor declared that houses in the area had to meet a minimum standard of 2-car garage, three bedrooms, two baths and a 5000 square foot lot. Since homes in this older neighborhood didn't meet the standard they could be condemned. Now she will be able to make it stick.

We've already seen this evil weed bear fruit in Freeport, Texas. Homes and established businesses including a fish processing plant are being taken to make way for a marina which might attract hotels and restaurants. The whole thing is being financed by a $6 million dollar publicly financed loan. Not only do the speculators get your home, they get the people to pay for their adventure. No doubt when the whole thing is finished they will get a special tax break for bringing (low-paid service sector) jobs to the city. Thursday's decision gave the city council the go-ahead.

For those who believe in private property this decision is unspeakable. For those who believe that government should provide some protection against the worst depredations of the powerful it is unthinkable. If you value property rights or the security of your own home scream at your Representatives and Senators to change this.

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