November 30, 2013

Takings, Redevelopment, and Vulnerable Populations

Legal News, Property, State Courts, Supreme Court • Tags: Berman v. Parker, Detroit, Kelo v. City of New London, Michigan Supreme Court, Mt. Holly, Supreme Court

Contemporary Poletown as seen using Google Earth on November 30, 2013. The area condemned in the case is shown in the center of this photo. It’s roughly rectangular with a flattened corner on the upper left side.

In an earlier post, I discussed some of the property-law underpinnings of a case coming before the Supreme Court in its October 2013 term, Township of Mt. Holly v. Mt. Holly Gardens Citizens in Action, Inc. There I discussed the family resemblance between Mt. Holly, and some takings cases: Kelo v. City of New London, Hawaii Housing Authority v. Midkiff, and Berman v. Parker.

To briefly recap, the Mt. Holly case concerns an economic redevelopment plan for a particular neighborhood (“The Gardens”) in Mt. Holly, NJ. Approximately 75% of the residents of The Gardens are African-American or Latino. The redevelopment plan is not being contested on the grounds of a taking of property (Berman and Kelo clearly allow for it, rightly or wrongly), but rather on Equal Protection grounds. That is, the redevelopment plan is alleged to disproportionately affect racial and ethnic minorities – the paradigmatic “suspect” classification scheme in Equal Protection doctrine. That question of law is not immediately relevant to the interests of this blog, but it does relate at a more basic level: property is an important medium for structuring social (and by extension, political) interactions. What is particularly relevant for my purposes here, is that the allegedly unconstitutional policy being pursued by the city of Mt. Holly is arguably only possible because of the Court’s decisions in Berman v. Parker, Hawaii Housing Authority v. Midkiff, and Kelo v. City of New London. In these cases, the Court has essentially agreed to uphold any use of eminent domain that is not motivated by a “bare desire to harm” those targeted by the takings. As a result, property can be taken for a wide range of purposes – virtually any a legislature could conjure – including economic development. Indeed, economic redevelopment not only if property is physically blighted, but even if it is merely deemed economically obsolete by a legislature.

It is well-known that political power in the United States is not distributed equally. Research has demonstrated again and again that those relatively less affluent and the relatively less educated participate at significantly lower rates than their more educated, more affluent counterparts. (This phenomenon is not limited to the United States, of course. Fred Solt has given us empirical evidence suggesting this is a cross-national phenomenon: see here and here.) For numerous reasons, including self-selection, institutional and structural constraints, and interactions with the criminal justice system, racial and ethnic minorities tend to participate at lower rates than whites (not coincidentally, minority status tends to correlate negatively with education and affluence). Differential levels of participation means differential levels of political influence – in short, the poorer and the less informed, which often includes significant minority populations tends to have less political influence than the relative size of their population would merit. [If you’re interested in the factors that contribute to differential participation rates, the classic statement is found in Verba, Schlozman, and Brady’s Voice and Equality.] This fact is related to both taking policy and the Equal Protection claim being made in Mt. Holly. Very briefly, laws that classify on the basis of race (e.g. de jure segregation, anti-miscegenation statutes, affirmative action, etc.) are subject to “strict judicial scrutiny” under the Equal Protection clause because racial minorities have not historically received a “fair shake” in the normal political process [an excellent discussion of this point can be found in John Hart Ely’s classic book Democracy and Distrust].

But, back to property issues: it has often been alleged that government taking schemes disproportionately harm the poor – and especially minorities. The logic of the claim is straightforward. First, blighted areas are almost by definition “poor.” As I’ve noted though, that the modern practice of blight policy departs substantially from the word’s traditional denotation. This brings up the second point, which interacts with the first: when an area is declared blighted and subject to condemnation (whether it is “blighted” in the conventional sense or not), poorer communities, and communities consisting of large racial or ethnic minority populations, are less successful at fighting policy adverse to their (property) interests. Thus, minority populations are vulnerable to abuse under modern eminent domain doctrine in that they 1) are more likely to be targeted by redevelopment efforts, and 2) are less able to resist adverse policies through conventional political processes.

In Berman, D.C. was undoubtedly targeting a very poor – and indeed, blighted – area of the city, which had a large minority population. A classic (if infamous) case that illustrates the potential for abuse of minorities via redevelopment is Poletown Neighborhood Council v. Detroit, decided by the Michigan Supreme Court in 1981. In Poletown, the city of Detroit condemned a large ethnic Polish neighborhood in order to create “green space” so as to induce General Motors not to leave the city in its search for a place to build a new Cadillac plant. The Michigan Supreme Court upheld the condemnations on the basis that alleviation of unemployment was an “essential public purpose.” A scathing dissent by Justice Ryan, however, argued that the court majority had destroyed a community and subordinated constitutional property rights to private corporate interests. Ryan argues that “This is more than an example of a hard case making bad law[;] it is, in the last analysis, good faith but unwarranted judicial imprimatur upon government action taken under the policy of the end justifying the means.” Thus, “[f]aced with the unacceptable prospect of losing two automotive plants and the jobs that go with them, the city chose to march in fast lock-step with General Motors to carve a ‘green field’ out of an urban setting which ultimately required sweeping away a tightly-knit residential enclave of first- and second-generation Americans, for many of whom their home was their most valuable and cherished asset and their stable ethnic neighborhood the unchanging symbol of the security and quality of their lives.” On balance then, Ryan views the Court’s decision as having “subordinated a constitutional right to private corporate interests.” (You can see the excerpted opinion here.)

One reason that citizen-activists (and parties working on their behalf) are having to raise such tenuous disparate impact claim is precisely because the “public use” clause of the Fifth Amendment has been rendered nearly toothless by the Supreme Court. That is, by granting almost unlimited deference to legislatures (recall that under rational basis review, a law will only be found to be unconstitutional if it is motivated by a “bare desire to harm”) local governments can exercise eminent domain with virtual impunity. As a result, individuals’ property rights have been abused – and unsurprisingly, minorities groups and the poor have been abused more often, as they are relatively less able to defend their rights in courts and legislatures. Ultimately, by gutting the property protections built into the Fifth Amendment, the Supreme Court has made it very difficult for citizens to defend their property rights in the courts – and especially difficult for vulnerable populations. In this light, it makes sense that such groups look to other parts of the Constitution for relief. For the Mt. Holly community, that other part of the Constitution is the Equal Protection Clause of the Fourteenth Amendment.

As I noted in my first post built around Mt. Holly, there is one more way in which that case points to interesting issues surrounding law, property, politics, and disasters. There I discussed the particular relevance of some major takings cases to Mt. Holly. Here I turned attention to the ways in which Mt. Holly highlights persistent problems of inequality in the American political system, including the interaction of inequality and property law and policy.

Editor’s Note: Poletown, discussed above, is one of the most infamous cases in eminent domain and takings law. It has been studied by many researchers interested both in redevelopment in urban settings as well as inequality. If you’re interested in seeing what the area looked like before and after the case, take a look at the photos here.

October 17, 2013

Redevelopment, Inequality, and Public Use Doctrine

Legal News, Supreme Court • Tags: Fifth Amendment to the United States Constitution, Kelo v. City of New London, Pfizer, Supreme Court

The Supreme Court has taken up a case, Township of Mt. Holly v. Mt. Holly Gardens Citizens in Action, Inc. that primarily concerns the applicability of disparate impact claims under the Fair Housing Act. Who owns property, and where they can own property are at the heart of property law. Under the Fair Housing Act no one can be denied ownership “on the basis of race, color, religion, sex, familial status, or national origin” [42 USC Section 3604]. Mt. Holly is worth thinking about at this blog for several reasons. First, it involves the redevelopment of blighted property. Often, in disaster recovery scenarios, whole neighborhoods are declared blighted, thus the rules around redevelopment can impact post-disaster recovery policy. Further, Mt. Holly raises important questions about the intersection of inequality and property in American politics. These issues (separately and together) frequently arise in the context of disaster recovery and mitigation. I’ll take up these points in a future post. In short, it turns out that Mt. Holly is a useful vehicle for thinking about an entire range of issues concerning the law and politics of property and disasters.

In today’s post, though, I’ll explore some of the claims made in Mt. Holly, and some of the legal issues it raises, especially as they relate to the explicit property element of the case: the redevelopment of a blighted community. My goal here is to briefly lay out the Supreme Court’s jurisprudence on blight so that a later post can more fully explore the importance of the Equal Protection claims in Mt. Holly. An interesting aspect of Mt. Holly is its resemblance to a highly salient, and recent, takings case, Kelo v. City of New London. While the plaintiffs in Kelo did not make the equality claims we see in Mt. Holly (indeed the Fair Housing Act claim distinguishes the cases), the redevelopment plan being litigated in Mt. Holly is possible in part because of the Court’s decision in Kelo and its forebears Berman v. Parker and Hawaii Housing Authority v. Midkiff.

In Mt. Holly, the city (Mt. Holly, NJ) is defending a plan to redevelop a dilapidated neighborhood known as “The Gardens.” The disparate impact claim arises because approximately 75% of the residents of The Gardens are African-American or Latino. Disparate impact means just what its name implies – that a law disproportionately affects racial or ethnic minorities. Thus, since the preponderance of the residents of the allegedly blighted Gardens neighborhood are minorities, the facially neutral development plan (which targets a theoretically a-racial geographic area) in practice harms many more non-whites than whites. Thus, a facially race-neutral law may be unconstitutional on the grounds that it disproportionately affects minorities (this is often a very difficult claim to prove). If the plaintiffs are successful here, future plaintiffs will be able to bring disparate impact claims under the Fair Housing Act. I’m grossly oversimplifying a complex area of Equal Protection doctrine (interested readers can find a fuller treatment here; also, Wikipedia actually has a pretty good overview of development of this doctrine). My point here is to explain that the city’s plan to condemn and demolish properties in The Gardens is possible in part because the Supreme Court has upheld similar redevelopment schemes in the past. I want to look at redevelopment through those cases in order to more fully explore the inequality claims in a later post. With that in mind, note that the Supreme Court has redefined “public use” to mean “public purpose,” and they have accepted a broad definition of “blight” in order to uphold such plans.

Berman v. Parker, decided in 1954, concerned an urban renewal plan in Washington, D.C. The neighborhood targeted for redevelopment was unquestionably blighted. Indeed, surveys reported that some 64% of the dwellings were beyond repair. Congress granted the city power to acquire land via eminent domain for the purpose of the renewal project. A local department store owner objected to having his land taken by the city for the purpose of redevelopment. In the end, the Supreme Court construed the Fifth Amendment’s “public use” clause very broadly. Indeed, the standard was transformed from public use (that is, the land taken must be for use by the public, in the form of a road, a school, a government building, utilities, etc.) to public “purpose.” Now, thanks to the Berman Court, legislatures, government agencies, and planning commissions are granted wide discretion in defining public use. That is, the Court gave its blessing to legislatures around the country to use the taking power for economic development, including urban renewal of neighborhoods it considers blighted. Not coincidentally, Berman v. Parker set the stage for a significant expansion of the use of blight as a justification for the exercise of eminent domain.

Hawaii Housing Authority v. Midkiff (1984) did not concern a redevelopment plan, per se, but rather a land redistribution scheme. On the island of Oahu, 22 landowners held 72.5% of the fee simple titles [the history of Hawaiian land tenure is fascinating; an excellent treatment can be found here]. The Hawaii legislature declared this land “oligopoly” to be injurious to the public welfare, and enacted a condemnation scheme to correct it. The Supreme Court held that the legislature’s condemnation plan was consistent with its police powers – and more importantly for our purposes here – held that land does not have to be put into actual public use to be upheld as an acceptable use of the eminent domain power. As in Berman v. Parker, the Court held that judges should defer to legislative determinations as to whether use of eminent domain is justified.

Most recently, the Court decided Kelo v. City of New London in 2005. In Kelo, several homes in a working-class neighborhood of New London, CT, were condemned so the land could be cleared and redeveloped. Suzette Kelo’s home and her immediate neighbors (several of whom were among her co-plaintiffs) had put considerable time and energy into making their homes comfortable and creating a nice neighborhood. Their homes did not conform to what we normally consider “blighted” housing. The larger area targeted for redevelopment, however, was needed (from the city’s perspective) since New London was attempting to attract the multinational pharmaceutical manufacturer, Pfizer Inc., in the hopes that it would build a new research facility in an effort to boost the local economy. The Supreme Court upheld the city’s plan, reiterating its earlier position that a government policy need only bear a rational relation to a legitimate government purpose. Economic development is a legitimate purpose, and thus, under the Court’s chosen level of review, condemnation is a “rational” means of achieving that end.

This brings us back to Mt. Holly. Redevelopment plans like the one being contested in Mt. Holly are possible despite the Fifth Amendment’s protection of private property from government confiscation (except for public use and with just compensation) because of a series of Supreme Court decisions which have, in their essence, announced that the judiciary will not enforce the “public use” clause against legislatures when they can provide a “rational basis” for their decision (indeed, the under the Court’s rational basis jurisprudence, a legislature need not supply a rational explanation — the Court will invent one for the legislature [see, e.g. Williamson v. Lee Optical]). As a result, property can be taken for economic redevelopment not only if it is physically blighted – but also if it is deemed economically less important or obsolete by a legislature.

Unsurprisingly, some individuals and neighborhoods have more political power than others. As a result, some neighborhoods are better able to fight off potential abuses of the power of eminent domain. As is often the case in America, it is relatively poorer, largely minority areas that tend to lack the ability to defeat an attempt at condemnation and taking of their properties. Add to this the line of cases discussed above that make it virtually impossible to win on a takings claim in a redevelopment case, and plaintiffs have to turn to other areas of law for relief. Thus, we get claims like that in Mt. Holly of disparate impact – that the redevelopment plan disproportionately harms minorities (which it certainly does, in this case, as the city plans to replace the blighted housing with housing that is unaffordable for current residents). Again (to reiterate) the question the plaintiffs are asking is whether this disparate impact claim can be raised under the Fair Housing Act. My point here, (to reiterate some more), is that were it not for Kelo and the larger body of Public Use doctrine from which it comes, the plaintiffs in this case would not have to bring an Equal Protection case. It is only because the constitutionality of these rather dubious redevelopment plans has been upheld against other claims, such as “takings” claims.

Redevelopment plans have been criticized in the past for their alleged tendency to disproportionately affect minorities. Mt. Holly tackles this head-on in a way that some of the other challenges to redevelopment schemes brought through the takings clause have not done. All of this makes Mt. Holly a fascinating case.

In a future post, I will further explore the relation between takings and vulnerable populations – especially minorities – again using historical takings cases as a vehicle for the analysis. We’ll revisit Berman and Mt. Holly, and discuss at some length an infamous case from the state of Michigan, Poletown Neighborhood Council v. Detroit.

For more information on Mt. Holly, I would recommend perusing the excellent Supreme Court blog, SCOTUSblog.