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Steven Greenhut
Abuse of Power: How the Government
Misuses Eminent Domain
Santa Ana, CA: Seven Locks Press,
2004. 327 pp. $17.95 (paper)
The title Abuse of Power brings to mind
scandal in high government offices and plush
corporate suites. But Steven Greenhut instead
details the almost routine yet alarming abuses
by local government agencies—the public
seizure of private property and its transference
to other private property owners. This is the
brutal practice known by the legal term eminent
domain.
Greenhut's skills as an insightful and
witty editorial writer for the Orange County
Register are well-displayed in this fact-filled
account. While written for a wide audience,
the book will be illuminating for activists and
scholars of local government as well.
Greenhut performs an invaluable public service
by documenting both nationally and in
Southern California the growth of local governments
oblivious to property rights. The
property rights of ordinary citizens have been
politicized, stripped of their natural rights
foundations in the American political tradition.
But why would our neighbors on city
councils engage in such drastic practices? City
councils (who often act in the capacity of
redevelopment agencies exercising eminent
domain) calculate that the redeveloped areas,
with the new, presumably dynamic businesses
paying higher taxes, add not only their novelty,
employment, and services to the local
community but more tax revenue as well.
Eminent domain is a major tool in this
process known as redevelopment; eminent
domain is local government's weapon of
choice to demolish all resistance. But, as
Greenhut demonstrates through instance after
instance, this redevelopment dream is not
only a nightmare for those whose property is
taken, but a false idol for those expecting
riches.
The rise of eminent domain is filled with
Orwellian twists. The United States
Constitution explicitly provides for eminent
domain in its Fifth Amendment: "nor shall
private property be taken for public use, without
just compensation." But what is "public
use"? What is "just compensation"? Both
terms take on completely arbitrary meanings,
whatever a local council or redevelopment
agency wants them to mean.
Much of what Greenhut describes used
to be known as "urban renewal." The new
practices adopt the original purpose of
urban renewal, the elimination of "blight,"
while transforming its meaning. "Blight," he
explains,"now means an area a city wants to
take by force. Nothing more. The city merely
goes through a legal process (studies,
hearings, and a redevelopment agency vote)
of designating it as blight and then, voila, it
is blighted." Hence, middle-class home
owners, apartment dwellers, and small business
owners (not wealthy huge corporate
moguls) are eminent domain's victims.
Indeed, big-box retailers are more likely to
be its perpetrators. Local government brings
in national chains (e.g., Wal-Mart) that
undercut smaller, local businesses.
One stunning example is the North
Hollywood redevelopment project, notable
for its visions of grandeur and spectacular
failure. To the cost of over $117 million in
public money, the area is now worse off than
before. The designation of "blight" was
enough to destroy the normal, market-driven
growth that might have occurred in the
area, making its recovery even more difficult.
From the original intent to eliminate
slums, the use of eminent domain has
degenerated into corruption masquerading
as statesmanship and delusion sold as sound
public policy. The complete arbitrariness of
"blight," "public use," and "just compensation"
is the point Abuse of Power makes over
and over. Public officials have visions of a
big-box retailer (or a cluster of them) or
splendiferous, tax-revenue-generating malls
full of exotic shops, movie theaters, and
restaurants replacing apartments, a strip mall
full of shops, or even respectable homes.
Greenhut portrays a formidable coalition of
redevelopment agencies, developers (especially
big-box retailers such as Costco), and
attorneys who specialize in condemning
property as "blighted." Example after example
completes a horrific picture of the
wielding of arbitrary power and the collapse
of individual rights that makes "totalitarian"
seem appropriate, not hyperbolic rhetoric.
Moreover, the promised riches are more
often than not missing. The redevelopment
process lends itself to financial abuse.
Greenhut explains, "Redevelopment agencies
must incur debt by floating bonds. It's part of the law…. The bonds can be floated
without a public vote. As a result, the small
town of Brea, 36,000 population, has total
redevelopment indebtedness of nearly $435
million." Once in debt, the temptation is to
win the money back in yet another gamble
involving abuse of someone's property rights.
Among the vulnerable are churches and
other religious institutions. Since "God does
not pay taxes," houses of worship are often
perceived by local government as financial
losers. In a decision that may indicate a turning
point, the Orange County city of Cypress
recently lost a case in federal court involving
their attempt to transfer property from a
church to a tax-generating Costco. (Greenhut
might have added physicians' offices as well,
for medical bills are not taxed.)
While Greenhut's focus is on southern
California communities such as Garden Grove
and Brea, he spends considerable time
explaining how eminent domain became
readily and even routinely abused. The problem
is particularly acute in California, due,
oddly, to limitations on local government taxation
authority imposed by Proposition 13. By
restricting local government tax revenue
raised from property taxes, Proposition 13
forces them to consider other sources of revenue.
This is a perverse, unintended consequence
of a vital tax-relief measure.
The discouraged should take heart at the
halt to the redevelopment effort in Lakewood,
Ohio, by Lake Ontario, featured on 60
Minutes. Here eminent domain went dramatically
too far: "So any house that didn't have
three bedrooms, two baths, a two-car attached
garage and central air conditioning was blight.
That encompassed 90 percent of the city's
homes, including that of the mayor's.These are
historic neighborhoods." The homes were to
be swept away in favor of luxury condominiums
and chain stores that would garner more
taxes for the city. A vital neighborhood was
reduced to an economic statistic and was
almost eliminated but for the fight in one
couple who publicized the unfairness of the
proceedings. They rallied their dispirited neighbors, went before the Cleveland city
council, and eventually had their rights
strengthened by local initiatives, after voting
their local mayor out. The retiree couple
kept their home, as did their relieved
albeit tension-wracked neighbors.
Greenhut supplies ample evidence
that the free-wielding use of eminent
domain is an essential part of the early
1900s Progressive revolution's determination
to overturn the principles of the
American Founding, especially the protection
of property rights. Particularly
revealing are the astonishing arguments of
two attorneys who defended eminent
domain: "Judges should not use anachronistic
notions of absolute property rights
to thwart critical land use planning, economic
growth, jobs and the communities'
best interests."
There are some signs, Greenhut's
book among them, that the ready
embrace of redevelopment is decreasing.
The corruption, the financial disappointments,
and the plain unfairness of what
has happened have incensed citizens. But
the practice has become so entrenched in
local government that it remains a struggle
to de-legitimize it. Just as the
Founders fought tyranny in its eighteenth-century form that deprived fundamental
rights, so we 21st-century
Americans must rediscover that "property
rights are human rights" and fight the
tyranny of eminent domain abuse.
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