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New York Post

 

How 'Eminent Domain' Makes Blight

February 21, 2010

By Nicole Gelinas

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New York may be on the road to reining in its longtime abuse of emi nent domain. Could our politicians actually abandon their long-held belief that it’s their responsibility to replace people and businesses in managing the economy?

State Sen. Bill Perkins (D-Harlem) this month introduced a bill to end the worst eminent-domain excesses by, among other things, defining the “blight” that can justify the forced sale of private property. If state leaders were to embrace the bill (admittedly a longshot) and pass it into law quickly enough, it could even stop the Atlantic Yards project -- a prime case of abuse.

Brooklyn’s Prospect Heights, industrial and forlorn for much of the late 20th century, was better by 2003. Government was doing its job: Crime was down, and the short commute to Manhattan was attracting new residents.

The private sector was doing its job: Developers had bought 1920s-era factories and warehouses and converted them into condos for buyers like Daniel Goldstein, who paid $590,000 for a place in an old dry-goods warehouse.

The old MTA railyards nearby didn’t stop this gentrification -- which should be no surprise. After all, other developers have built new multimillion-dollar condos right on the West Side Highway.

Newcomers to the neighborhood joined regulars at Freddy’s historic bar. Small businesses employed laborers in low-rise factories.

But Prospect Heights interested another investor: developer Bruce Ratner, who drew up plans for a mega-project to replace the entire area.

He successfully appealed to the central-planning instincts of New York’s political class. Then-Gov. George Pataki, Mayor Bloomberg and Brooklyn Borough President Marty Markowitz agreed to use the state’s power to benefit Ratner. The state would use eminent domain to forcibly buy up private property where he wanted to build, then transfer it to him -- and also let him buy the railyards at below-market price and kick in hundreds of millions in subsidies.

In return, Ratner would create the “economic benefits” favored by the planning classes, like low-income apartments to be doled out by ACORN (which also got $1.5 million from him) and minority jobs building a basketball arena.

The state could seize private property to benefit another private investor because for seven decades, courts have let it seize and demolish “blighted” housing -- which the state defines as “substandard” and “unsanitary.” All the state Urban Development Corp. needed was a fining that forcing the sale of the gentrifying private property would be blight removal -- and its consultants soon found what they were paid to find.

In the 1930s, as Daniel Goldstein’s attorney, Matthew Brinckerhoff, points out, “substandard” and “unsanitary” meant “children dying from rampant fires and pestilence” in tuberculosis-ridden firetraps. In 2006, the consultants found “substandard” conditions in the likes of isolated graffiti and cracked sidewalks -- plus “underutilization,” meaning that property owners weren’t generating the exact benefits the government desired.

“Underutilization” is a relatively new excuse for invoking eminent domain -- and it may not hold up. Other consultants cited it in West Harlem, where the city wants to take land from private owners and hand it to Columbia University. A court recently struck that down, finding that the government’s studies were “bereft of facts.”

The blight designation was, the judge ruled, “mere sophistry. . . Virtually every neighborhood in the five boroughs will yield similar . . . disrepair.” The arbitrary process also violated due process, as “one is compelled to guess what subjective factors will be employed.”

But that’s a tenuous win. The Harlem case is on appeal with the state’s highest court, which recently decided against property owners besieged by the Ratner project.

Perkins’ bill is be a good first step in reining in all this abuse. But the state should go even further and eliminate blight as a justification for seizing private property. Since the 1960s, New York has learned that the remedy for “substandard” conditions is policing and infrastructure.

Indeed, New York’s real blights today are government’s fault -- like the old Deutsche Bank building at Ground Zero, owned by the city and state since 9/11, whose “deconstruction” is still underway.

Eminent-domain abuse is a symptom of a deeper problem: The belief that central planning is superior to free-market competition. To cure yourself of this notion, stroll around Atlantic Yards, past three-story clapboard homes nestled near corniced row houses -- “blighted” residences. You’ll peer up at Goldstein’s nearly empty apartment house, scheduled to be destroyed.

And you’ll see how Ratner’s wrecking balls have made the neighborhood gap-toothed. A vacant lot now sprawls where the historic Ward Bakery was.

Today, Prospect Heights displays what the state wants everyone to see: decay. But it’s isn’t the work of callous markets that left the neighborhood to perish. It’s the work of a developer wielding state power to press property owners to sell their land “voluntarily.” Meanwhile, true private investment has been choked off, since everyone knows the state’s aiming to hand everything to Ratner.

Free markets aren’t perfect, but they’re better than the blight of arbitrary government.

Original Source: http://www.nypost.com/p/news/opinion/opedcolumnists/how_eminent_domain_makes_blight_WqHew5xgCXJYHlDNcOBWQP

 

 
 
 

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