Five Years After Kelo

Today–this June 23–marks the fifth anniversary of the U.S. Supreme Court’s wrongheaded ruling in Kelo v. New London. Here’s my piece on Kelo+5 in The Daily Caller. The reasoning behind the opinion relied primarily on three past (although modern) Supreme Court decisions involving definitions of “public use”:

  1. Berman v. Parker (1954) — This case upheld the right of municipalities to declare entire areas blighted, even if the property in question isn’t blighted. It also accepted Washington, D.C.’s argument that the area condemnation was necessary to prevent future blight. An all around terrible decision.
  2. Hawaii Housing Authority v. Midkiff (1984) — This case involved redistribution of land titles in Hawaii. When the state moved to seize the properties, 49 percent of land in Hawaii was controlled by government and 47 percent was controlled by 72 owners. The Court failed to recognize the central problem with land distribution in Hawaii at the time: almost half of the property was controlled by government, which created massive real estate market distortions–in addition to Hawaii’s odd economic history. While Justice Sandra Day O’Connor wrote the majority opinion in Midkiff, she also wrote a scathing dissent in Kelo, where she regretted her broad language in the Midkiff ruling that opened the door for a terrible opinion like Kelo.
  3. Ruckelshaus v. Monsanto Co. (1984) — This case involved chemical industry trade secrets. While it was solely about intellectual property, the Court argued that this case was relevant because it dealt with public use in a purely economic context. The enormous distinctions between intellectual property and real property were lost on the majority in Kelo.

While the ruling itself was terrible, the events of New London demonstrate the fallibility of the municipal planner world view–that they somehow possess more market information than actual market players, and can in essence predict the future. In 2009 of last year, Pfizer announced it was closing the research facility that spawned New London’s redevelopment pipe dream, which in turn led the city to seize and demolish the petitioners’ homes. The land where their homes once stood is now largely vacant, with waist-high weeds supporting a thriving community of feral cats. Just another sad example of how economic development by fiat is bound to fail.