John Stossel on Eminent Domain Run Amok

March 3, 2009— -- Susette Kelo, now 52 years old, had hoped to stay in her little pink house forever. She bought her New London, Conn., home in 1997 and fell in love with the neighborhood.

Then she learned that the government can just take your property, if doing so will improve the common good of the community. City officials said Kelo would be "fairly compensated" but said she didn't have a choice about whether or not she would sell. Some people would call this stealing, but it's not. It's called "eminent domain," a legal term that means "supreme lordship."

Traditionally, governments use eminent domain to clear space for highways or railroads. In New London, town officials wanted the space for private developers. Chris Riley, who in 2001 represented the New London Development Corp., said that construction would bring in more than 5,000 jobs and $12.5 million in new local taxes. The city hired lawyer Wesley Horton to defend the redevelopment plan.

But despite the city's legal efforts, Kelo refused to move.

"I liked it there," she said. "It was all just bull----, from the beginning."

The city put a notice on Kelo's door, explaining that the house was condemned. Her neighbors received notices, too.

"We were backed into corners, like animals," she said.

But even when the bulldozers came, Kelo and six of her neighbors refused to leave. They protested, got lawyers involved and eventually managed to get their case heard by the Supreme Court, in February 2005. Months later, her attorney Dana Berliner found out that they had lost -- by one vote.

"I think that was when I started screaming," Berliner said. "The Kelo decision opened the door for eminent domain abuse all across the country."

Twisting of the Law?

New London is just one of many places that government has taken land for purposes that critics say are outside the traditional use of eminent domain. In Brooklyn, N.Y., developers are attempting to use eminent domain to take apartments and businesses to build a big sports complex.

The city of Hurst, Texas, agreed to condemn more than 100 houses in order to make way for a shopping mall. The town of Piscataway, N.J., took away a family-owned farm because the city said it wanted to preserve open spaces.

As for New London, the benefits city leaders promised would follow have yet to materialize. It's been more than 10 years since demolition of "blighted" properties on the site began, but the new hotel, upscale housing and conference center are still just blueprints on a shelf.

"It's just a a 90-acre pile of dirt," said Jeff Benedict, who wrote a book about New London's eminent domain fight in a book called "Little Pink House."

"Over $100 million in taxpayer money has been spent there," said Benedict. "And what do you have to show for it? Dirt and weeds."

Horton, the city attorney, says it's a 20-year plan and the city needs to entice developers to come in.

That's because, he says, urban development is hard – it takes years to get permission to build something, and if cities couldn't use eminent domain to spur development, cities would die.

Different Cities, Different Methods

New London's leaders say they need eminent domain to revitalize the city, but Anaheim, Calif., is one city that found an alternative way to encourage development.

"We streamlined the permit process," said Anaheim Mayor Curt Pringle, who changed restrictions on signage, parking and importantly, zoning.

Instead of implementing strict zoning rules that would determine what kinds of businesses could be built, Anaheim gave business owners flexibility. Existing businesses don't have to move and if people don't want to sell their property, developers just have to build around them.

Some eminent domain advocates say that developers will refuse to build unless "holdouts" like Kelo are removed. But that's not always the case.

Edith Macefield, of Seattle, refused a $1 million offer for her home and a condo-and-supermarket project went up around her. Darlene Dixon of Baltimore didn't want to sell either, so a university found another way to expand.

"Occasionally, with growth, we need to take people's land," said Benedict. That doesn't mean, he added, that cities should take land for just any reason.

"What this really is about is taking people's homes," and in Kelo's case, he said, "they didn't have to do this."