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Report: Widespread Eminent Domain Abuse in New York State

Leonard Gilroy
October 8, 2009, 12:57pm

The Institute for Justice has released a new report detailing eminent domain abuse in New York State, one of the handful of states that failed to see any racheting back of its condemnation laws in the wake of the U.S. Supreme Court's Kelo vs. City of New London in 2005. In that decision, the Court upheld governments' use of eminent domain to take private property from one owner and give it to another private owner, not for the development of legitimate public uses like highways or schools, but purely for the purposes of economic development and tax revenue generation. This controversial decision set off a property rights firestorm that led to more than 40 states passing legislation, constitutional amendments or ballot measures to rein in the practice (to be fair though, less than 10 states actually passed reforms with teeth).

From the IJ press release:

New York is one of the worst states in the nation when it comes to abusing eminent domain for private gain, according to the Institute for Justice, which tracks such abuses nationwide.

The Institute for Justice, which litigated the infamous Kelo eminent domain case before the U.S. Supreme Court, today released a report that documents example after example where government officials across the Empire State used eminent domain not to create projects that would be owned and used by the public—such as a courthouse or post office—but, rather, to create private development that would financially benefit politically powerful private developers.

The report, "Building Empires, Destroying Homes: Eminent Domain Abuse in New York," states, "Over the past decade, a host of government jurisdictions and agencies statewide have condemned or threatened to condemn homes and small businesses for the New York Stock Exchange, The New York Times, IKEA, Costco, and Stop & Shop. An inner-city church lost its future home to eminent domain for commercial development that never came to pass. Scores of small business owners have been threatened with seizure for a private university in Harlem and for office space in Queens and Syracuse. Older homes were on the chopping block near Buffalo, simply so newer homes could be built. From Montauk Point to Niagara Falls, every community in the Empire State is subject to what the U.S. Supreme Court has accurately called the 'despotic power.'" [...]

In addition to documenting examples of eminent domain abuse across New York, the report also spotlights problems in New York state law when it comes to eminent domain and suggests solutions the courts and the Legislature can implement to ensure everyone keeps what is rightfully theirs to own.

The report warns, "New York law not only makes it easy to condemn property, it actively encourages city agencies to do so. A variety of incentives are in place to motivate cities to create redevelopment zones, and to invite private developers to use government force to obtain the private properties contained in them, instead of negotiating in the free market. In this perverse system, city agencies and private developers are actually encouraged to team up together against local property owners." [...]

"The rate of eminent domain abuse in New York is simply staggering," said Christina Walsh, the Institute’s director of activism and coalitions. "We have worked with property owners statewide to fight the most egregious abuses, but state and local government officials seem to have no limit on their ability to dream up ways to abuse eminent domain."

Download the full report here. It couldn't have come at a more opportune time, as the state Court of Appeals is going to hear arguments next Wednesday on Goldstein v. New York State Urban Development Corporation, the first post-Kelo eminent domain case heard by the state's high court. IJ offers some background on that case here, and the amicus brief it filed in the case is here.

For other recent headlines on the property rights front, see Reason Foundation's Annual Privatization Report 2009.


Leonard Gilroy is Director of Government Reform


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