Is Post-Kelo Eminent Domain Reform Bad for the Poor?

Abstract

Since the Supreme Court decided Kelo v. City of New London in June 2005, some 35 states have enacted eminent domain reforms laws. In his recent Northwestern University Law Review Colloquy article, which I have been asked to comment on, Professor David Dana argues that most post-Kelo reform efforts are seriously flawed because they tend to forbid the condemnation of the property of the wealthy and the middle class for economic development, but allow the condemnation of land on which poor people live under the guise of alleviating blight. This, he claims, ensures that the reforms enacted in numerous states "privilege . . . the stability of middle-class households relative to the stability of poor households" and "express . . . the view that the interests and needs of poor households are relatively unimportant." I agree with Professor Dana that the problem of blight condemnations and its impact on the poor deserve greater attention, but take issue with his argument that post-Kelo reform efforts have systematically treated the poor worse than middle and upper class homeowners.

Most of the states that have enacted post-Kelo reform laws have either banned both blight and economic development takings or defined blight so broadly that virtually any property can be declared blighted and taken. Several others have enacted reforms that provide no real protection to any property owners because of other types of shortcomings. Only nine states are actually guilty of allowing only the condemnation of blighted areas, narrowly defined. Even these nine flawed reforms are probably better for the poor than no reform at all. Such a law might benefit many poor people who live in non-blighted areas and are potentially vulnerable to economic development takings. Survey data suggests that the poor themselves overwhelmingly oppose economic development condemnations, suggesting that they are not much concerned about the expressive harms that worry Professor Dana. Finally, the exclusion of blighted property from the ban on economic development condemnations in some states is not necessarily explained by indifference to or contempt for the interests of the poor. It could also be the result of other factors, such as voter ignorance about the actual effects of blight condemnations.

Keywords: Kelo, property, constitutional law, economic development, post-Kelo reform, eminent domain reform, poverty

JEL Classification: D23, K11