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Thursday, July 12, 2007

Dana on Reframing Eminent Domain

David A. Dana (Northwestern) has posted Reframing Eminent Domain: Unsupported Advocacy, Ambiguous Economics, and the Case for a New Public Use Test on SSRN.  Here's the abstract:

The two eminent domain reform alternatives currently on the political agenda are a flat ban on condemnations or a ban on only economic development condemnations coupled with continued allowance of blight condemnations (the approach in most reforming states). Although the possible effects of reform are central to the current debate, scholars have not carefully addressed those effects. With regard to the quantitative effects of reform, this Article uses an accessible model to demonstrates that: (1) a flat ban on all exercises of eminent domain will result in some less development in urban areas (poor or not poor) and some more development in exurban or rural areas; (2) a ban on only economic development condemnations (which allows so-called blight or blight removal condemnations to continue as before) will result in some more development in poor urban areas (but not necessarily in urban areas as a whole) and in exurban or rural ones, and less development in suburban areas (at least non-poor suburbs); and (3) the extent to which alternative means of subsidizing new development (such as tax relief) will offset the loss of eminent domain depends on the level of competition among localities for new development prior to ban or restrictions on the use of eminent domain. We can say less about the quality of the development after eminent domain reforms than we can about the quantity of development after eminent domain reforms, as the qualitative claims about the nature of the development that will be encouraged or discouraged as a result of eminent domain “reforms” lack both theoretical and empirical support. Stated simply, there is no defensible way to categorize as good or bad, economically viable or non-viable, efficient or inefficient, socially beneficial or socially harmful, the development in urban areas that will be lost as a result of a flat ban on eminent domain or (in poor urban areas at least) that will be gained as a result of a ban on economic development condemnations coupled with continued allowance of blight condemnations. Given that, a new approach to the public use component of eminent domain law is needed.

Ben Barros

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Comments

I'm still considering the writer's overall argument but, in the interim, one thing that we can point to as informative is anecdotal evidence. In the case of Montgomery, Alabama, the urban revitalization of Dexter Avenue (probably one of the most historic streets in the Southeastern U.S.) has stalled, in part, because the eminent domain option is off the table for economic redevelopment purposes.

This is important because the type of the development seeking to replace what currently exists on Dexter is generally a much improved product both in terms of aesthetics and economics. See http://www.doverkohl.com/project_detail_pages/montgomery.html

Posted by: Chad Emerson | Jul 20, 2007 6:07:42 AM

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