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.