Kelo, Directed Growth, and Municipal Industrial Policy

77 Pages Posted: 10 Apr 2008  

Steven J. Eagle

George Mason University - Antonin Scalia Law School, Faculty

Date Written: April 1, 2008

Abstract

This article explores trends towards increased local government land use regulation to spur economic development and towards partnering with private redevelopers. It notes that while Kelo v. City of New London has intensified these trends, the use of condemnation for retransfer for private redevelopment endorsed by Kelo is only one tool by which local government advances what the author terms municipal industrial policy. While Kelo expresses confidence in the ability of courts to distinguish between permissible economic development takings primarily for public benefit and impermissible takings primarily for private benefit, the author maintains that any such distinction is illusory.

The article also explores how public choice considerations augur in favor of unnecessary and inefficient condemnations. Finally, it suggests some alternatives that would better effectuate urban redevelopment while avoiding unfair and inefficient exercises of eminent domain. There include greater recognition of fractional property interests, and facilitating owner participation in post-condemnation redevelopment. Other salutary alternatives are localizing neighborhood redevelopment control, and making blight redevelopment open and transparent by replacing condemnation with abatement and foreclosure.

Keywords: abatement, blight, condemnation, economic development, eminent domain, foreclosure, Kelo, local government land use regulation, municipal industrial policy, private redevelopment, property, public choice, takings

JEL Classification: D6, H71, K11, L32, O2

Suggested Citation

Eagle, Steven J., Kelo, Directed Growth, and Municipal Industrial Policy (April 1, 2008). George Mason Law & Economics Research Paper No. 08-21. Available at SSRN: https://ssrn.com/abstract=1118398 or http://dx.doi.org/10.2139/ssrn.1118398

Steven J. Eagle (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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