Property Grunt

Thursday, June 23, 2005

Justices, 5-4, Back Seizure of Property for Development

Here is the article.

A divided Supreme Court ruled Thursday that local governments may seize people's homes and businesses against their will for private development in a decision anxiously awaited in communities where economic growth often is at war with individual property rights.

Justice Sandra Day O'Connor made her opposition clear

Justice Sandra Day O'Connor, who has been a key swing vote on many cases before the court, issued a stinging dissent. She argued that cities should not have unlimited authority to uproot families, even if they are provided compensation, simply to accommodate wealthy developers.

The impetus of this decision was from a lawsuit filed by Connecticut residents. Their reaction to the decision was obvious.

Connecticut residents involved in the lawsuit expressed dismay and pledged to keep fighting.

''It's a little shocking to believe you can lose your home in this country,'' said resident Bill Von Winkle, who said he would refuse to leave his home, even if bulldozers showed up. ''I won't be going anywhere. Not my house. This is definitely not the last word.''

The Justices who voted on this decision stated their justification for their decision.

Writing for the court, Justice John Paul Stevens said local officials, not federal judges, know best in deciding whether a development project will benefit the community. States are within their rights to pass additional laws restricting condemnations if residents are overly burdened, he said.

''The city has carefully formulated an economic development that it believes will provide appreciable benefits to the community, including -- but by no means limited to -- new jobs and increased tax revenue,'' Stevens wrote in an opinion joined by Justice Anthony Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.

Justice O'Connor's response was the following.

''Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random,'' O'Connor wrote. ''The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.''

The Grunt is torn on this issue. I am all for redevelopment and progress. If someone can make a silk purse out of sow's ear more power to them. But what about the homeowners who are SOL? They get screwed pretty badly in the process because they are are out of a home and they need to find another place to live.

I do concur with Justice O'Connor that the parties with the deep pockets will be the one to benefit from this decision.

To all of you homebuyers and investors, you must institute due diligence protocols to the point of night sweats. I mean examine each piece of property from to roof to toehold. Get cozy with the locals and see what the word is on the street. Is a big shopping mall coming to town? If so, where is it going to be located? Who are the people behind the development and who are their contacts in the government? The more aware you are the more likely you will be able to make a decision that will avoid the powers of eminent domain.

Treat eminent domain like a natural disaster. You can't fight a hurricane but you can figure out hurricane season and create and implement a strategy that will get you out of harm's way. That is the same thing here.