It’s a rare constitutional law case that has something for everyone to loathe. But 10 years ago, the Supreme Court sparked a singular moment of bipartisanship when it held, in Kelo v. City of New London, that states can take property from one owner and give it to another to re-develop for a higher, better (read: more lucrative) use. Conservative property rights advocates, liberal civil rights groups, and almost everyone in between denounced the opinion, and states passed dozens of laws rejecting its central holding. Federal courts and legal writers are still working out the ramifications of the case.
Ilya Somin has now written what is likely to be the definitive legal analysis of Kelo, its aftermath, and its future prospects. Somin builds on earlier accounts and adds interviews of his own (with, for example, insiders within the New London Development Corp., the nonprofit corporation that was chartered by the state of Connecticut to guide redevelopment of the city of New London, which had fallen on hard economic times after manufacturing interests left town).
The NLDC was headed by Connecticut College president Claire Gaudiani, who was married to a high-ranking official at Pfizer, then the world’s largest pharmaceutical company. In 1997, after negotiating with the NLDC, Pfizer agreed to build a $300-million research facility on an old industrial site in Fort Trumbull, a waterfront New London neighborhood, in exchange for a 10-year property tax abatement. The company had an additional condition: The city had to condemn 90 acres of property surrounding the Pfizer site and transfer it to private developers to build a high-end housing development, hotel and conference center, and riverwalk shopping district for the benefit of Pfizer employees.
Such “private-to-private” redevelopment takings are surprisingly routine. In common law, the state has the power of eminent domain to make improvements for “public use.” The Fifth Amendment guarantees property owners “just compensation” for such takings. In the 1800s, private companies were given the power of eminent domain to build railroads, until abuses caused Congress to rein in the practice. But starting in the 1940s, possessed by the New Deal enthusiasm for central planning, cities began to take “blighted” properties and give them to private entities to clear out slums.
The Fort Trumbull plaintiffs found top-flight legal representation with the Institute for Justice, the libertarian public interest law firm. The lawyers at IJ took the case to the Supreme Court, which sided with New London in a 5-4 decision. The reaction was an uproar: Polls showed that as much as 80 percent of the public disagreed with Kelo, which “generated more public attention than all but a handful of other Supreme Court rulings.”
Thirty-seven states passed laws restricting redevelopment takings, but Ilya Somin’s analysis finds that at least 22 of these laws “are largely symbolic in nature, providing little or no protection for property owners.” Perhaps the most important outcome of Kelo was the opening of the public’s eyes to the cozy relationship among developers, planners, and local government officials—and how broad their latitude was once they decided someone else could make better use of your property. The decreased numbers of redevelopment takings in the past decade suggests that the outcry made public officials wary—making Kelo an important, though incomplete, victory for property rights advocates.
The Grasping Hand is excellent at laying out the political and doctrinal developments that led up to Kelo and at canvassing the backlash and legislative response to it. Its most useful section is a chapter on potential reforms to redevelopment takings that could blunt some of the injustice they inflict on property owners, such as giving special protection to homes, increasing the compensation received by homeowners, and subjecting takings to heightened legal scrutiny under state law. Perhaps the most important reform that states could undertake would be to require more rigor in the economic analyses used to justify large-scale redevelopment, since so many of these projects fail to generate the promised revenues. That includes the Fort Trumbull project, where Pfizer eventually pulled out: The bulldozed 90 acres now sit denuded of houses, overrun by feral cats.
Somin notes that property takings for private redevelopment end up lining the pockets of developers and the politically connected while disproportionately burdening the poor and minorities. That’s one of the reasons Kelo made strange bedfellows of IJ and the NAACP. In fact, Kelo has only one real set of supporters: legal academics, who defend its deference to planners and politicians.
The continued defense of Kelo by the professoriate—a group normally inclined to side against corporate interests—suggests that the case had less to do with corporate greed than with social class. Somin is fair-minded about the motives of the NLDC; he concludes that the group really was motivated by the public interest. But even if one imagines that Claire Gaudiani was not swayed by her family’s connection to Pfizer, it seems clear that she was moved by something more fundamental: the bias among upper-middle-class elite professionals against a certain kind of neighborhood.
One of the most revealing comments made during the entire litigation was Gaudiani’s disparagement of the homes in Fort Trumbull as “ugly and dumb.” Fort Trumbull was no slum, but the neighborhood had seen better days: The houses were working-class, modest—and perhaps just this side of tacky. So they had to make way for the kind of houses and neighborhoods favored by “creative-class” urban and inner-suburban professionals, among whose ranks are numbered most college presidents, law professors, and federal judges: dense, walkable neighborhoods close to high-end commercial outlets, with well-appointed houses on smaller lots, populated by people like them.
Pfizer’s corporate money alone may not have been enough to force the residents of Fort Trumbull out of their homes. But yoked to upper-middle-class judgments about what kind of neighborhood is smart and beautiful as opposed to ugly and dumb, it was unstoppable.
Justin Torres is an attorney in Washington.
