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Urban Removal

Supreme Court ruling gives governments rights to property


A century ago, a thriving black neighborhood called Brooklyn stood where uptown's Second Ward stands today.

It was a model of commercial success and had two movie theaters, over 20 restaurants, two newspapers, a pharmacy, doctors, dentists and dozens of other businesses.

Even back then, the land it stood on was valuable, and for decades, city leaders coveted it. In the 1940s, it was "red-lined," or deliberately targeted, as most African-American communities were, by banks with the encouragement of the federal government to deny residents business and housing loans and insurance. By 1947, the all-white Charlotte Planning Commission had rezoned Brooklyn into an industrial zone. Relaxed code enforcement encouraged landlords to deliberately allow their property to run down, because they could make more money through demolition and sale to the government than through rehabilitation, the Charlotte-Mecklenburg Historic Landmark Commission says.

The main focus of the Sawyer Redevelopment Commission, which city leaders formed in 1960 was to finish off the Brooklyn neighborhood. In a decade, the commission bulldozed the neighborhood, and along with it the homes of more than 1,000 families, and buildings that held more than 216 businesses. Then they resold the land to developers at reduced prices, just like the city is planning to do right now with the land it took adjacent to the future light rail line stations along South Boulevard.

Unfortunately, they underestimated the demand for the land uptown back then, and large tracts lay vacant or were turned into parking lots. It took civic leaders decades and billions of dollars to bring uptown back to life.

Back then, they called this "urban renewal," and until last year, most of the policies that once were described by that term had become illegal. Today, we call it "economic development." That's the new name the Supreme Court gave it in 2005's Kelo v. New London when a majority decided it was fine with them if local governments condemned neighborhoods and businesses in order to sell the land at reduced prices to developer friends as an "incentive" for them to build nicer neighborhoods and businesses. This would help low-income people, one justice opined, because it would improve their communities. It is, ironically, the same thing Charlotte leaders said about urban renewal.

Instead, according to a report by the Institute for Justice, a libertarian public interest law firm, the opposite has happened.

A year after Kelo, almost 6,000 properties have either been seized by government or threatened with condemnation. That's more than half the amount taken over the previous five years combined.

The vast majority of the condemnations removed lower-income -- but not always poor -- residents and smaller businesses so property could be developed by those catering to wealthier people and more prominent businesses, Institute for Justice Senior Attorney Dana Berliner wrote.

Aside from the mangling of what property rights Americans had left, there is another more pernicious angle to Kelo. Kelo powers aren't just a means for developers to acquire property owners refuse to sell them, but to acquire that property cheaply.

Fighting a city appraisal of the value of your property in court during a condemnation regularly costs Queen City residents who attempt it thousands of dollars -- and that's just in the first round. This city, like governments across the country, has attorneys on salary who can continue to appeal decisions in the favor of property owners until they can no longer afford to fight.

That means that the lower the economic status of the property owner/victim in a Kelo condemnation, the easier it is for governments to take their property from them at lower than market value for "better" economic development projects.

"Cities know that now they rarely need to file condemnation actions because owners largely give in rather than fight what they believe, after Kelo, to be a hopeless battle," said Berlinger.

States can still ban the use of eminent domain for economic development, and so far over half have done so since the ruling. Unfortunately, North Carolina isn't one of them. (North Carolina law is often said to ban eminent domain takings for economic development, but there are so many loopholes and exceptions that the law offers property owners weak and in many cases no protection.)

A constitutional amendment banning Kelo takings was killed in a state house committee last week, even though it had nearly 90 sponsors and co-sponsors, a large number for a chamber of 120 members.

Durham Democrat Mickey Michaux, who chairs the committee, told the Raleigh News & Observer the amendment was "done" and that he didn't want to tinker with the constitution unless it was "absolutely necessary."

Another bill that would have forced governments to pay property owner's attorney's fees also died in committee. A third bill that banned local governments from using eminent domain to combat "blight," which is so loosely defined in state law that it can apply to brand new homes that might one day be blighted, also died. And so far, the state senate has shown little interest in passing a watered down anti-eminant domain bill the House passed that does little -- but at least something -- to curb Kelo takings.

So for now, it looks like politicians and developers will be allowed to continue their urban renewing ways.

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