Hoosier Rights at Risk

Indiana needs to rein in eminent domain

Hoosiers may feel secure in their homes and businesses, but that might change in the wake of the precedent-setting U.S. Supreme Court ruling in Kelo v. City of New London. The Court appears to have given Indiana state and local governments free rein to take homes and property for whatever reason they may want as long as they follow proper administrative procedures.

That might sound extreme, but it’s a fair reading of the Court’s decision.

In Kelo, a hardy band of home and business owners were fighting New London, Connecticut’s efforts to take their property to make way for professional offices, upscale shopping, and luxury condos and apartments. At the time their land was condemned, the city didn’t even have detailed plans in place or a solid proposal. They had a “vision” and a general economic development plan.

That was enough, according to the U.S. Supreme Court, to justify the government confiscation, or “taking,” of private property. “Promoting economic development is a traditional and long accepted function of government,” wrote Associate Justice Stevens for the majority. In the past, cities and states at least had to show a neighborhood was blighted.

Let’s put this in context. Suppose you own a Motel 6 or Holiday Inn. The city determines that a “higher” use would be a Ritz-Carlton. They can, as far as the U.S. Supreme Court is concerned, condemn your land and hand it over to the Ritz-Carlton simply because local planners and public officials think it will generate higher tax revenues and more jobs.

Sound crazy? This was exactly the case New London’s attorney’s said would be acceptable and appropriate when questioned by the Supreme Court during oral arguments in February.

Hoosiers might be tempted to right off New London’s covetous actions as another case of where East-Coast values and politics have degraded respect for property rights. They shouldn’t. Similar condemnations are taking place in cities and counties across Indiana.

In Indianapolis, the city is now using the threat of eminent domain to remove a 60-year old neighborhood business to make way for a parking lot for the new Colts stadium. In another case, the city got tired of negotiating with a parking garage owner and seized his property so the city could sell the land to private developers.

It’s not just the big cities. The Institute for Justice, a public interest law firm representing the property owners in New London, found that Mishawaka county government used the threat of eminent domain to close the deal on 51 homes that stood in the way of AM General’s plan to expand an automobile manufacturing facility.

More than a little irony frames these stories. In the mid-1980s, Mayflower moving vans were sent to whisk the Indianapolis Colts away from Baltimore because local business leaders feared the Maryland legislature would use eminent domain to seize the football team.

The small glimmer of hope in the U.S. Supreme Court’s decision is its willingness to let state legislatures limit eminent domain on their own. In fact, the Indiana General Assembly established a commission last spring to review eminent domain in Indiana. During this review, citizens and state legislators should consider the following principles as part of any reform effort.

  • Eminent domain should be used where there is a clear public use, including projects that have broad public access or provide a public service that cannot be provided the private sector;
  • Eminent domain should be used only as a tool of last resort, after all voluntary alternatives have been exhausted;
  • Eminent domain should be used if there is an imminent threat to public health, safety, or welfare;
  • Eminent domain should be sued only if private benefits are incidental to proposed project.

More than 200 years ago, Thomas Lincoln, the father of our 16th president, moved to Indiana because he could secure clear title to farmland and make a legitimate go of running a business profitably. Unlike Kentucky, the Land Ordinance of 1785 required consistent measurements for land and established the township system of surveying. Secure property rights spurred Indiana’s early development as a result.

Unfortunately, the U.S. Supreme Court has washed its hands of any responsibility to protect property rights at the federal level and has left their security in the hands of state legislatures. It’s up to Hoosiers to decide whether they will take up the challenge.

Samuel Staley is director of urban and land use policy at Reason Foundation and co-editor of the book “Smarter Growth: Market-Based Strategies for Land-Use Planning in the 21st Century.”