Determining Who Ultimately Owns Your Home

The fate of property rights hangs in the balance

Who owns your home?

a. You own it free and clear;
b. The bank;
c. A landlord;
d. Donald Trump.

If you answered anything other than Donald Trump, a case that the Supreme Court will rule on this spring or summer should have you worried. If the court sides with earlier decisions, local politicians may try to steal your property and hand it to Trump or some other real estate developer because they can generate more tax revenue than your home. It sounds crazy, but it’s much more possible than you’d think.

Wilhelmina Dery still lives in the New London, Conn., home that she was born in back in 1918. Her son lives next door. Their family has lived in the neighborhood since 1895. And the government is trying to take their homes. Yesterday, the Supreme Court heard oral argument in Kelo v. City of New London pitting middle-income homeowners, including the Derys, against politicians and powerful land developers.

In 2000, the city of New London condemned the Dery’s neighborhood to make way for new office space, a hotel and luxury apartment complex. New London isn’t even trying to justify its actions on the traditional criteria of “urban blight” – the idea that a neighborhood has so badly deteriorated that only the government can clean it up and revitalize it using public subsidies.

The city is openly razing the neighborhood simply because officials believe the government will reap great financial rewards by destroying the homes and replacing them with commercial uses to complement the nearby Pfizer, Inc. research facility. A stable, moderately priced neighborhood of historic homes owned by longtime city residents just isn’t good enough when a city is eyeing new revenue streams.

The plight of New London’s homeowners is increasingly common throughout the country. More than 20 years ago, the Michigan Supreme Court upheld the infamous Poletown decision. In that case, the city of Detroit bulldozed an entire neighborhood to make way for a General Motors plant. At the time, the Michigan court (which reversed itself in 2004) said that economic development was a sufficient “public purpose” to allow the city to force residents from their homes.

This is a far cry from eminent domain’s original intent. The Founding Fathers inserted the power into the Fifth Amendment of the Constitution in an attempt to restrain government, not give it more power. They recognized that rare cases would arise when the government might have to seize private property (while compensating land owners) to build roads, canals and other basic infrastructure. A lone landowner holding out might prevent the major project from being completed. So, they restricted the power to projects that were a necessary “public use.”

State and federal courts have steadily weakened this restriction, giving the government broader and broader powers to take homes, businesses and land. The Institute for Justice, a public interest law firm, found that cities and local governments threatened property owners or actually used eminent domain in 10,282 cases between 1998 and 2002 alone. In each of these cases, another private business or individual would benefit substantially.

While glitzy headquarters and corporate facilities make great copy for tourist and marketing brochures, the long-term stability of a city depends on its ability to protect and nurture neighborhoods. Cities are built on neighborhood foundations. If the Supreme Court rules in favor of the homeowners, perhaps city officials will start to focus more on nurturing the long-term foundation of their cities than on the short-term bottom line of an expanded tax base. If the court sides with the city of New London, property rights will have little practical meaning in America’s cities, and our homes may be the next target.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.

Staley is the author of several books, most recently co-authoring Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008). Texas Gov. Rick Perry aid Staley and Moore "get it right" and world bank urban planner Alain Bartaud called it "a must read for urban managers of large cities in the United States and around the world."

He is also co-author, with Ted Balaker, of The Road More Traveled: Why The Congestion Crisis Matters More Than You Think, and What We Can Do About It (Rowman and Littlefield, September, 2006). Author Joel Kotkin said, "The Road More Traveled should be required reading not only for planners and their students, but anyone who loves cities and wants them to thrive as real places, not merely as museums, in the 21st Century." Former U.S. Secretary of Transportation Mary Peters said, "Balaker and Staley clearly debunk the myth that there is nothing we can do about congestion."

Staley's previous book, Smarter Growth: Market-based Strategies for Land-use Planning in the 21st Century (Greenwood Press, 2001), was called the "most thorough challenge yet to regional land-use plans" by Planning magazine.

In addition to these books, he is the author of Drug Policy and the Decline of American Cities (Transaction Publishers, 1992) and Planning Rules and Urban Economic Performance: The Case of Hong Kong (Chinese University Press, 1994).

His more than 100 professional articles, studies, and reports have appeared in publications such as The Wall Street Journal, The New York Times, Washington Post, Los Angeles Times, Investor's Business Daily, Journal of the American Planning Association, Planning magazine, Reason magazine, National Review and many others.

Staley's approach to urban development, transportation and public policy blends more than 20 years of experience as an economic development consultant, academic researcher, urban policy analyst, and community leader.

Staley is a former chair for his local planning board in his hometown of Bellbrook, Ohio. He is also a former member of its Board of Zoning Appeals and Property Review Commission, vice chair of his local park district's open space master plan committee, and chair of its Charter Review Commission.

Staley received his B.A. in Economics and Public Policy from Colby College, M.S. in Social and Applied Economics from Wright State University, and Ph.D. in Public Administration, with concentrations in urban planning and public finance from Ohio State University.