June 23, 2005

Fun With Property Rights

This one of those issues that seems boring, trust me this will have huge implications for everyone. The Supreme Court has ruled that local government may seize private property for private economic development:

The 5-4 ruling represented a defeat for some Connecticut residents whose homes are slated for destruction to make room for an office complex. They argued that cities have no right to take their land except for projects with a clear public use, such as roads or schools, or to revitalize blighted areas.

As a result, cities have wide power to bulldoze residences for projects such as shopping malls and hotel complexes to generate tax revenue.

Local officials, not federal judges, know best in deciding whether a development project will benefit the community, justices said.

Up until now, this type of forced bye-out, known a eminent domain, could only be done for public services such as building a freeway or a school. If local governments can force out property owners for private development, that represents a massive increase in the power of local government. So pay attention, this is important.

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