Out of Control Policy Blog

Second Anniversary of Kelo and the State of Property Rights in America

Today marks the second anniversary of the U.S. Supreme Court's Kelo vs. New London decision, which lit a fire under the private property rights movement and set into motion a wave of policy reform that is still ongoing. Even though the decision to condemn the middle-class homes of Susette Kelo and her neighbors to make way for a private developers was an utter affront to freedom, it actually ended up being one of the best things that could have ever happened to the property rights movement. Today it's worth stepping back and taking a look at how far things have come in these two short years.

  • Almost every state--with the notable exceptions of New York, New Jersey, Massachusetts, and Rhode Island--has adopted some form of eminent domain reform (see the Castle Coalition's handy map here, and their 50-state report card here). Some of these reforms are clearly better than others. For example, the five bills signed last fall by Gov. Schwarzenegger in California added very little if any protection to property owners, while states like Florida, South Dakota, and Georgia passed very strong reforms.
  • Kelo added momentum to the regulatory takings reform movement, which had been reignited just seven months before with the passage of Measure 37 in Oregon. Last fall, property rights activists in four states placed measures with regulatory takings protections on the ballot. Measure supporters in Idaho and Washington faced decisive defeats after being outspent by opponents (often coalitions of environmental groups, planners, city & county associations, and others) by significant margins, yet Prop 90 was only narrowly defeated in California, and Arizona's Prop 207 passed by a healthy margin.
  • Arizona's Prop 207 proved that a "Kelo-Plus" strategy of targeting eminent domain and regulatory takings in one reform package--although risky--can be an effective vehicle to enact comprehensive property rights protections. See my recent blog post on Prop 207 for more info.

However, this issue won't be going away anytime soon. The erosion of property rights that began in the early 20th century with the rise of the Progressive era and modern urban planning has been pervasive and far-reaching. It will take a long time and a lot of effort to undo the damage. Kelo provided a vehicle by which a lot of the low-hanging fruit could be plucked, but there's a lot more work needed, and property owners need to be constantly vigilant against new threats to their rights.

Just to give a sense of what's challenges still remain on the property rights landscape:

  • Meaningful eminent domain reform has eluded three key states--California, New York, and New Jersey--which, not coincidentally, are among the biggest abusers of eminent domain.
  • "Blight" definitions--often used as a justification for eminent domain--remain vague and amorphous in many states, leaving property owners vulnersable to abuse
  • As some of the reform efforts have shown, it's easy to pass eminent domain legislation full of exemptions, loopholes, and window dressing. Right now in California, the League of California Cities is pushing sham legislation and a backup ballot measure that purports to restrict eminent domain but comes nowhere close to actually doing so. Luckily, the California Alliance to Protect Private Property Rights is countering with its own strong ballot measure, but citizens will undoubtedly be confused by the cynical attempts of big government supporters to pull the wool over their eyes.
  • The poor, minorities, and the less affluent segments of society are disproportionately impacted by eminent domain abuse, according to a new study from the Institute for Justice. The study found that 58 percent of those targeted with the threat of eminent domain were minorities, and those targeted had an annual median income under $19,000 (compared to $23,000 in surrounding neighborhoods).
  • Regulatory takings reform still has a long and difficult road to travel before it moves beyond Oregon and Arizona (and the handful of states like Florida and Texas with weaker statutory protections). Regulatory takings are the holy grail of the environmental movement, because modern environmentalism is predicated upon using regulation to restrict property use. A similar story could be told for urban planners, whose grandiose planning schemes often rely on uncompensated takings. Myopic planners and environmentalists that cling to the blunt hammer of regulation--as opposed to market-oriented, property rights based policy solutions--will fight like cats backed into a corner to stop regulatory takings reform, as we saw in California and Washington last fall when the Sierra Club, Defenders of Wildlife, American Planning Association, and others launched their well-funded attacks on the RT ballot measures.

So for those of us interested in restoring the tradition of strong private property rights that served this nation so well in its first century, Kelo was a pivotal moment and turning point from which some great outcomes have already been derived. But the more time that goes on, the more important it is to stay vigilant and advance the fight forward. Without vigilance, memories of the Kelo decision may fade, complacency may too easily set in, and rights may too quickly erode again.

More recent thoughts on Kelo from Pacific Legal Foundation's Tim Sandefur here.

Leonard Gilroy is Director of Government Reform


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