Wednesday, September 06, 2006

The Perils Of Property Rights

Matt Labash, at The Weekly Standard has an eminent domain tale that reads like the Perils of Pauline, the silent film serial which had its theater debut in 1914. Wikipedia says:

The very popular silent Perils of Pauline was a cliffhanger serial shown in weekly installments featuring Pearl White as the title character, a perpetual damsel in distress. She was menaced by assorted villains, including pirates and Native Americans. At the end of each installment she was generally placed in a situation that looked sure to result in her imminent death. The start of the next episode showed how she was rescued or otherwise escaped the danger, only to face fresh peril again.
In an article titled "This Land Is Whose Land?," Labash tells the story of the Halpers, and their fight to keep the farm that had been owned by their family since 1922. It's a long, involved story, with cliffhangers and villains galore, and I'm sorry to tell you up front, does not have a happy ending, unless you like the idea of the town of Piscataway, New Jersey taking the operating family farm under pretext of saving it from developers.

Now, I have to say, that even if the Halpers were planning to sell to developers, it was their land, and I think they should have the right to dispose of it as they see fit, as long as they weren't breaking any laws. Let the city deny permits to the people who plan to put up condos, or strip malls, if it wants to, and can do it legally, but to take the Halpers' land on the chance they might sell seems disingenuous at best. If the family did decide to sell, why couldn't the city bid on it like other interested buyers? That would assure fair market value for the sale. However, that wasn't how the town went about the business (of course, it never is how towns do these things), and the pretext they used doesn't really hold up to scrutiny.

Labash clarifies some of the problems with the town's position. One of the primary problems with the city's claimed desire to save the property from imminent development is that the family had already refused numerous lucrative offers from developers, because they wanted to keep farming their land, and keep farming it they did, right up until they were evicted. Another is that the city had no objection to the numerous other farms sold and developed in the area, just the Halpers'. Yet another difficulty, less to do with the town's motives than its methods, is that the town, as towns are wont to do, offered substantially less than the property's value, giving the Halpers no incentive to cooperate with its scheme to "rescue" the land.

The case went through the court system with many a Perils of Paulinesque twist and turn, including, by Labash's account, some of the famed government corruption for which New Jersey has gained notoriety, even to the point of not-so-veiled death threats. The situation cannot be laid entirely at the door of New Jersey corruption, however, since the battle for property rights took a devastating blow with the much-lamented Kelo decision of 2005, in which the Supreme Court voted 5-4 that eminent domain extended beyond the traditionally accepted standard.

The Court ruled that a community could not only take property (supposedly properly compensated) for such things as schools and roads, as was previously considered acceptable, but that a town could force the transfer of privately held land from one owner to another private owner, if the community would benefit economically from the sale--a much broader interpretation of the Takings Clause of the Fifth Amendment. In other words, if a town will get more tax revenues from having a shopping mall where your house is, it can force you to sell to a private developer. Of course, you need not fear that individuals might be acting out of personal greed. I'm sure bribery and hidden private investments never muddy the political waters. All city councils act in absolute purity. (Okay, sarcastic moment over.) Summing up--the ruling pretty much leaves the limits to government's ability to manipulate property rights in tatters.

The whole legal wrangle with Piscataway and the Halpers started well before the Kelo decision; it's been in the courts for years, but Kelo gives the town much more firm footing from which to make its grab. So, Piscataway has the power to claim eminent domain, and purporting to fear that the Halpers will one day sell their property, the town confiscates it, for far less than the property is worth. The Halpers rack up massive legal bills, and still lose the farm that's been in their family for over eighty years. The town can now do whatever it wants with the land, including sell it to the same developers that they fretted would buy it in the first place. According to Labash, all of the locals he talked to think this outcome is likely. The Halpers, meanwhile, are literally homeless.

The Halpers' story is just one of many Perils being played out across the country. Kelo has made a mess of property rights. Personally, I don't think this decision can stand for the long haul. Interesting thing about it, the decision actually managed to bridge the gap between right and left in American politics. When the decision came down, there was an outcry from the full spectrum of political positions. Many legal scholars think it's bad law, and hopefully the issue will be returning to a Supreme Court that's seen what a mess its decision has wrought (certainly not what the Framers of the Constitution intended), or at least to a Supreme Court that no longer has all five of the same Justices who made the decision confirming that Piscataway had the right to take the Halpers' farm. Haven't some of those Justices earned a nice long retirement? I think many homeowners would happily pay their taxes, knowing that they were helping the people who brought you Kelo not to be on the bench.