By Christina Sandefur
May 11, 2018
A new film tells the heartbreaking tale of what happened to Susette Kelo’s home. But it’s also worth remembering the heartwarming fact that Americans can fight back and protect the security of their homes.
Little Pink House focuses on one of the most controversial decisions in Supreme Court history: the 2005 case in which the Court allowed state officials to seize people’s homes through eminent domain to make way for private redevelopment projects that would, in theory, improve the overall economy.
New London, Connecticut’s Fort Trumbull neighborhood had never been particularly prosperous, so when Susette bought a modest Victorian house there in 1997, it was in need of serious repairs. But she was a strong-willed, hard-working woman, and to her, the abandoned two-story Victorian was an opportunity for independence and security in the wake of her recent divorce. She renovated it, painted it pink, and cleaned up the garden. Over the next few years she and her new husband Tim restored the house together: Susette braiding rugs, Tim doing the stone work.
But Connecticut bureaucrats had other plans for the neighborhood. They wanted to woo the Pfizer corporation to locate in New London, and worked closely with the company to design a plan to replace Susette’s neighborhood with a “high-end residential district,” as well as offices, shops, and a marina. Local officials condemned the property through eminent domain—paving the way for a courtroom showdown over the meaning of the Fifth Amendment, which only allows government to take property “for public use.”
Led by our friends at the Institute for Justice, a coalition of conservative, libertarian, and liberal groups joined forces to argue that eminent domain power can only be used for public purposes, not to benefit politically well-connected private companies.
Yet in a five-to-four decision, the Court upheld the decision to bulldoze the community. Essentially, anything the government claims will benefit the public constitutes a “public use,” wrote Justice John Paul Stevens. The decision gave government officials virtually unlimited discretion to seize homes and businesses and give the property to private companies for their own profit. Writing in dissent, Arizona native Justice Sandra Day O’Connor warned of the decision’s consequences: “nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”
She wasn’t wrong. Not long before the Kelo decision, the City of Mesa decided to condemn a family-owned business in Mesa called Bailey’s Brake Service. Randy Bailey had bought the shop from his father intending to carry on the family legacy, but the city had other plans: it wanted to demolish his shop and give the land—along with $2 million in taxpayer dollars—to a hardware store that wished to relocate to Bailey’s site. Randy went to court, arguing that the taking violated the Arizona Constitution’s more stringent limits on eminent domain—and he won. The Arizona Court of Appeals held that the Arizona Constitution’s “public use” requirement “is only satisfied when the public benefits and characteristics of the intended use substantially predominate over the private nature of that use.” Taking property from one private party to give to another did not fit the bill—even if doing so might result in some sense “benefit” the public.
But although Randy Bailey kept his property, a large loophole remained: even in states with strong “public use” rules, state governments still claimed almost limitless power to seize land if it was declared “blighted,” and in many states, including Arizona at that time, “blight” is defined so vaguely that blight was the eye of the beholder. Worse still, government can often condemn un-blighted property just because it is located next to a blighted area.
Worse yet, despite the outcry over Kelo, one major loophole remained: although in an eminent domain case, a property owner is at least entitled to “just compensation,” government frequently enacts rules forbidding owners from using their property, without having compensating them at all. Because the government doesn’t technically “take” the land in these cases, it can typically get away with these “regulatory takings”—often wiping out an owner’s property value—without having to pay any just compensation. The property owner is left with virtually worthless land—and no way to get justice.
Thus, after the U.S. Supreme Court reduced federal constitutional protections for property rights in Kelo, Arizonans feared that their state’s Supreme Court might follow the same path. So in 2006, they overwhelmingly approved Proposition 207, written with help from the Goldwater Institute. By far the strongest protection for property rights in the nation, the Act bars government from condemning private property to benefit developers, and requires government to pay owners when its regulations eliminate their property rights. Government can still regulate to protect public health and safety—but it can’t rewrite property rights with impunity.
Prop. 207 has proven an overwhelming success. In more than a decade of operation, it has barred bureaucrats from taking Arizonans’ property without paying for it, or redesigning neighborhoods to serve the desires of influential developers.
Of course, when it was first passed, bureaucrats and their allies warned that it would spell doom for the state. It would “cost taxpayers millions of dollars and create thousands of frivolous lawsuits,” said one. Another claimed it would “rob local communities of billions of dollars now used to fund fire and police protection.” One even said it would harm “our nation’s defense” and make it harder to fight terrorism. Needless to say, the sky hasn’t fallen. Far from destroying civilization, Prop. 207 has ensured that Arizonans enjoy the strongest protections for property rights in the nation, and can be confident that their homes and small businesses won’t be seized to make way for a new shopping mall or luxury hotel.
Still, there have been some hiccups. In 2012, one court decision shortened the statute of limitations for property rights protections by three months, for example. So, building on the lessons learned, the Goldwater Institute has put together a package of robust legal protections for property rights that can be used to protect citizens in the other 49 states. Foremost among these is the Property Ownership Fairness Act, that limits eminent domain and requires compensation when the government takes away people’s property rights. We’re working to encourage states nationwide to adopt the Property Ownership Fairness Act so that Susette Kelo’s tragedy won’t be in vain.
Christina Sandefur is the executive vice president at the Goldwater Institute.