The Manhattan Institute’s
Center for Rethinking Development
Ideas that shape the city’s planning, housing, and development
A Monthly Newsletter by Julia Vitullo-Martin, MI Senior Fellow

Eminent Domain: The Good, the Bad, and the Ugly

Julia Vitullo-Martin, May 2006

When Mayor Michael Bloomberg hosted a group of Manhattan's 100 top political donors in late April, he handed out a card listing his five priorities for his second term. One was:

"Eminent Domain - Oppose legislation that would cripple affordable housing and responsible re-development (like Times Square)."
(©Julia Vitullo-Martin)

An odd coupling—affordable housing and Times Square. But that's one of the peculiarities of eminent domain, which can sweep up everything in its path under the general rubric of promoting the public good.

Under increasingly expansive court rulings eminent domain has grown into a largely unchecked power, by which government can take almost any property, for almost any purpose. Since the Supreme Courtís 1954 decision in Berman v. Parker, courts have gradually eliminated most restrictions on the government's ability to condemn private property, even when the property would be turned over to other private owners immediately.

Sooner or later, this was going to come to an ugly head—and so it did in June 2005 with Kelo v. City of New London. In that decision the Supreme Court ruled, 5-4, that local governments should be afforded wide latitude in seizing private property for local land-use purposes. That had long been the court's position. But the details of the case spoke to the most basic principles of many Americans, and aroused their most basic fears.

The city of New London wasn't taking just any property. It was condemning modest single-family homes, nicely sited on the waterfront. It was turning over those homes to a large corporation, which intended to raze them to build a lavish hotel and conference center.

(©Julia Vitullo-Martin)

A Christian Science Monitor poll said 98.5% of Americans disagreed with the decision. The media had a field day speculating, often wildly, on whose homes would be seized next.

Legislators in some 40 states across the country sprang forward, introducing legislation to ban Kelo-like takings. Over a dozen states have passed laws essentially prohibiting the use of eminent domain to benefit private economic development. Members of Congress introduced 11 bills, the strongest of which, the Private Property Protection Act (HR4128), passed in the House overwhelmingly in November. Now it is stalled in the Senate, awaiting a hearing in front of the Judiciary Committee. The bill would prevent states and localities from taking "property to be used for economic development or over property that is subsequently used for economic development, if that State or political subdivision receives Federal economic development funds during any fiscal year in which it does so."

Ever since the Kelo backlash, big-city mayors have been reasserting the rightness and justice of their own eminent-domain programs. Mayor Bloomberg has mounted one of the more convincing campaigns, in part because New York has some genuinely good programs. It also has some very bad ones.

THE GOOD

Even a mayor with good programs can have a hard time convincing anyone of their worth because of the harsh legacy, and folk memory, of urban renewal. This is particularly true in New York, which once accounted for one-third of the entire country's urban-renewal spending. The folk memory here is strong because it's true. Nonetheless, the mayor is right that he needs eminent domain to continue some of his affordable-housing programs.

(©Julia Vitullo-Martin)

The Department of Housing Preservation and Development, New York's designated urban renewal agency, intends to use eminent domain to take hundreds of properties in the Bronx and in Queens. But this isn't the same old urban renewal, condemning huge swaths with little regard for the complexity of the neighborhood. This is a sensitive attempt to undo past damage by examining blocks lot by lot, distinguishing property thatís being used productively from property that's vacant, abandoned, or grossly underused.

Take the 35-block Melrose Commons Urban Renewal Plan in the South Bronx. A traditional demolish-and-rebuild-with-towers plan proposed by the Koch administration in the 1980s was stopped dead by the community, led by a local group called Nos Quedamos (We're Staying). In 1994 the Giuliani administration accepted a vastly revised and scaled-down proposal of 1,200 mixed-income residences (both rental and for sale), parks, and stores, to be built primarily by non-profit developers. Today the neighborhood thrives: families have moved into the townhouses and apartment buildings, and retailers and small businesses have moved into the commercial streets.

The city held the titles to many tax-foreclosed properties in Melrose Commons, giving it a strong foothold for renewal. But other properties in private ownership remained vacant—an ongoing blight on the neighborhood. Of the 342 lots in Melrose Commons, the city owned 243, 71 percent, through tax foreclosure. But it had to acquire another 99 lots through purchase or eminent domain. This is a slow, tedious process, and many vacant, trash-strewn lots remain in private hands—a definite downward drag on the up-and-coming neighborhood. HPD is right to push to redevelop these lots— not only by the private owner, when willing, but by the city, when the owner won't act.

THE BAD

The mayor's argument that he needs eminent domain to continue Times-Square-like redevelopment is less persuasive. It rests on a highly dubious example—the Atlantic Yards project in downtown Brooklyn. There, the State of New York intends to help out developer Forest City Ratner, by condemning as blighted any property its owner refuses to sell freely. The result will be a huge development, combining a 19,000-seat basketball arena for the Nets with 6,800 affordable and market-rate housing units, several office buildings, and a hotel. Government subsidies are estimated by supporters at $1 billion, and by opponents Develop Don't Destroy Brooklyn at $1.9 billion—both handsome figures.

Downtown Brooklyn is not analogous to Times Square. It has been coming back on its own since the mid-1990s, as crime has declined and the area's many strengths, including excellent public transportation, have become clear. Private investment has poured in, rehabilitating old industrial warehouses into residential and mix-used buildings and condos. Brooklyn is not cursed with porno theaters, whose profitability in Times Square was so great that no "market" offer would ever be accepted by owners. It is not blighted by widespread prostitution and drug dealing. It does not need government subsidies to encourage people to move in. They are already there. Downtown Brooklyn is a centrally located, well-served, dynamic neighborhood poised to take its place alongside midtown Manhattan as a business and residential district—unless it is destroyed first by city and state support for old-fashioned urban renewal, abetted by state eminent domain authority against property owners who want to stay. Brooklyn needs its own Nos Quedamos.

THE UGLY

What should be one of the most beautiful developments in Manhattan, Renzo Piano's plan for Columbia University's new campus in West Harlem, is being made ugly by the underlying threat of eminent domain. Though the university has repeatedly disavowed any intention of acquiring Harlem property forcibly, in fact, the universityís Board of Trustees signed a letter of understanding, in August 2004, with Charles Gargano, CEO of the Empire State Development Corporation, to have the state condemn any property north of its Morningside Heights campus that it desired but could not buy.

Columbia's so-called "expansion zone" encompasses the area between Broadway and 12th Avenue, and from 125th Street to 133rd Street. It owns about three-fourths of the property now, which is fine. It bought the property on its own, paying whatever market price was asked.

Now it wants the rest, including the property of small-business owners who don't want to sell. Nicholas Sprayregen, for instance, owns five self-storage buildings; Columbia wants four of them. (The fifth is likely to be landmarked—a political fight the university knows to avoid.)

Columbia claims the property is "blighted," a vague condition that automatically allows condemnation. Certainly, much of the property in West Harlem is under-used. But that's in large part because it is zoned for manufacturing, which amounts to blight-by-zoning, since manufacturing is an anemic and shrinking part of New York's economy. Sprayregen and the other members of the West Harlem Business Group are not allowed by law to upgrade their property to residential or even, in many instances, commercial use. The zoning restricts their ability to use their property freely—and also depresses its value.

That aside, why does Columbia need every parcel of land in West Harlem? Consuming an entire neighborhood for institutional purposes—wiping out the bakeries, restaurants, and small businesses—is just as destructive when done by a university as by a corporation or government bureaucracy. This is an instance in which the market, left to function on its own, can protect diversity.

WHAT’S NEXT

Melrose Commons is proceeding peaceably and well, with strong community support. Within five years, the neighborhood may show little evidence of its former travail.

Both the Forest City Ratner project and Columbia's expansion are bitterly opposed by many local businesses and residents. Though both projects look like done deals, the story of Melrose Commons shows that no one should underestimate the ferocity of New Yorkers roused to save their neighborhoods.

 


May 2006
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Institute for Justice
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HR 4128 Bill to Protect Private Property Rights
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“Times Square really was the poster child for a seedy, dangerous, unattractive, porno-laced place. Because of eminent domain and some forward-looking people in this city, they turned it into a place where 24 hours a day you're safe on the street.”
Mayor Michael Bloomberg
 
“Prospect Heights has become an ideal neighborhood for artists to live and work. The Atlantic Yards development plan would obliterate the conditions that make the neighborhood the artists enclave that it is. The menace of eminent domain is already displacing small, local businesses, including some of the restaurants and bars that attracted people to the neighborhood.”
Daniel Goldstein,
Develop Don't Destroy Brooklyn
 
“Columbia has requested that the New York State Urban Development Corporation, doing business as Empire State Development Corporation, consider the condemnation of portions of the Property not under Columbia Control and the transfer of title by deed, to facilitate development by Columbia of facilities to be used for academic, administrative, student and faculty residences, retail, parking, on-site energy, open space, a hotel and other related or ancillary uses.”
Letter from the Trustees of Columbia University to Charles Gargano, Chairman, ESDC, July 30, 2004
 
“Blight is Yiddish for poor.”
Assemblyman Richard Brodsky
 
“New York's blight designation is a joke. You can call anything in the state blighted under New York's definition.”
Dana Berliner,
Institute for Justice
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