Smart Growth and the Supreme Court

Kelo Backlash Could Lead to Restoration of Property Rights Lost to Smart Growth and Eminent Domain Abuses
by Ronald D. Utt, Ph.D.
WebMemo #781
June 29, 2005

Supreme Court Justice Sandra Day O’Connor was right when she wrote in her dissent to Kelo vs. City of New London that now “the specter of condemnation hangs over all property.”[1] She was also quite correct to note that the decision undermines an important Constitutional protection that all Americans had taken for granted over the past two centuries.

When the 13 states voted to adopt the Constitution in 1791, they appended to the original document ten amendments guaranteeing certain basic rights to protect ordinary citizens from the depredations of an overreaching government. Among those rights was the Fifth Amendment protection of private property from unlawful seizure by government. Known as the “takings clause,” Americans’ property rights have been secured, until recently, by the phrase “nor shall private property be taken for public use without just compensation.”

Though this is viewed as one of the most important protections underpinning both our freedom and economic vitality, there was nothing particularly novel or innovative about the Founding Fathers’ including the takings clause in the Constitution. Property rights and protections had long been a foundation of English common law and were taken for granted as fundamental. Typical was the robust declaration of such rights made by William Pitt, Earl of Chatham, in a 1763 speech to the House of Lords in regard to the Excise Bill then before that body:

The poorest man may in his cottage bid defiance to all the force of the Crown. It may be frail; its roof may shake; the wind may blow through it; the storms may enter, the rain may enter—but the King of England cannot enter; all his forces dare not cross the threshold of the ruined tenement.

But that was then and this is now. On June 23, 2005, Justice John Paul Stevens wrote for the majority of the U.S. Supreme Court that private property can be taken by government for the purpose of economic development. Where Kings of England were once forbidden, the threshold is now open for a mere director of economic development to come crashing through, evict the poorest man, seize his cottage, rip it down, and sell what’s left to corporations and wealthy home buyers.

Eminent Domain Not the Only Abuse of Property Rights
Although many of the subsequent expressions of concern have rightfully focused on the broadened powers of eminent domain and the ease with which private property can now be seized by government, the decision’s collateral damage will extend in many directions. There is a chance that the decision will adversely influence the increasingly severe land use restrictions that many states and communities have been imposing on property owners over the past decade in the name of “smart growth.” This is unfortunate because voters in several communities have had some notable recent successes in thwarting and reversing these regulatory efforts to restrict property rights and limit development. The prospect for more gains was promising, as opportunities emerged to unify contending sides of the growth debate around a more liberal interpretation of property rights.[2]

Some Victories For Property Rights
Reflecting this trend, the Property and Environment Research Center in Bozeman, Montana, published an important report, “Whatever Happened to Smart Growth,” in June 2005. The report describes and discusses several of the notable legal and electoral setbacks that advocates of the more extreme and coercive forms of smart growth and new urbanism have recently suffered in several parts of the country where they had once reigned unchallenged. Authored by Jane Shaw and Ken Orski, the paper reviews the most recent legal developments in states and communities once viewed as paragons of smart growth virtue—Maryland and Oregon, and Loudoun County, Virginia—but where concerned citizens used the ballot box to overturn or substantially modify harsh restrictions on private property.

In each of these places, laws and directives that had been established to limit or discourage population growth and development were either altered or simply ignored in order to allow for more growth and building than would otherwise have taken place. As significant as these losses were to the growth control movement, the more moderate wings of the smart growth and new urbanist movements have suffered even worse recent defeats at the hands of zoning boards across the country as a consequence of the imposition of increasingly onerous land use regulations that often make it impossible, if not illegal, to build communities based upon smart growth concepts.

Property Rights Abuses Create Sprawl
Advocates of smart growth and new urbanist practices encourage developments with higher population density (more people and houses per acre), less reliance on cars and more on walking and transit, and greater proximity of houses to jobs and shopping. But like any broad movement, there are important differences that divide smart growth advocates. At one end are more extreme elements that believe smart growth solutions should be imposed on people and the typical suburban development be prohibited. The moderate wing, however, believes that smart growth communities should be offered as a choice and should compete on an even playing field with traditional suburban developments.

Such differences in approach often spill over into land-use restrictions. While Oregon’s growth boundary forced development into increasingly crowded urban areas, Maryland’s vague policies achieved little measurable change. Loudoun County’s plan actually encouraged sprawl by establishing minimum lot sizes of 5, 10, and 25 acres depending upon the plot’s location in the county. Thanks to Loudoun’s harsh regulations, suburban development in Washington, D.C., has since leapfrogged into West Virginia.

In a rational world, counties in West Virginia would not be suburbanizing—they are simply too far away from employment centers. Yet they are growing rapidly as middle-income households are forced to seek affordable housing farther away from the regional core because of land-use restrictions in closer in communities. Workers in these distant communities confront 4-hour daily commutes, which add to transportation expenses.

Referred to as “downzoning,” Loudoun’s approach to growth control substantially reduced density and, with it, the number of potential residents. But since such growth controls do nothing to deter overall population growth and, thus, the demand for new housing, these restrictive regulations mean that more raw land must be used to house a given population. If a community’s zoning laws allow no more than one house per five acres—as Loudoun’s did in its western half—a square mile of land can accommodate only 128 households, or about 333 people. These severe restrictions on the supply of land for development caused median home prices in Loudoun and other Virginia suburbs to increase by more that 80 percent in the past four years, and homes in once affordable Loudoun now have a median price of $420,000.

But very few people want (or can afford) to live on five acres or more. According to the U.S. Bureau of the Census, nationwide less than 8 percent of American households live on lots of five acres or more, and many of those lots are probably farms. The average lot size for single family homes in the U.S. (excluding apartments) is about one-third of an acre, not the three to five acre mandatory minimum becoming common in suburbs.

Emerging Opportunities for Cooperation
While the recent election results in Maryland, Oregon, and Loudoun County marked a setback for the most primitive kinds of growth control, the more significant losses to the moderate wing of the smart growth/new urbanist movement are occurring in the zoning boards and planning commissions where proposals to construct higher-density “smart growth” communities are routinely rejected.

Typical of this trend are a string of recent rejections in Virginia, where 7 of the Nation’s 100 fastest growing counties are located and where sprawl and growth control are hot political issues. In just one month in late Spring 2005, three of four new urbanist-style developments proposed for the Washington, D.C., suburbs were rejected by public officials, and the fourth—more appropriately characterized as a market-based, transit-oriented development—is under attack from the community and an influential member of Congress

In sum, high-density developments are almost universally rejected by those who would have to live near them, and regulations give that rejection force of law. Conversely, in a free market where consumer choice is encouraged and capitalistic acts between consenting adults are permitted, developers would be allowed to provide the homes that families want to buy. But instead, the law prohibits much high-demand development, and the developer could be subject to ruinous fines and court-ordered coercion if he attempted to satisfy that demand.

As a consequence, ironically, the moderate wing of the smart growth/new urbanist movement can be counted among the major losers from the diminution of property rights. Some within the movement believe that a restoration of those rights would lead to more new urbanist communities than the present system allows. Indeed, in reaction to Kelo, John Norquist, President of the Congress of New Urbanism, endorsed Justice O’Connor’s harsh assessment: “I think that’s the potential. It’s shocking, really. The founders of the country put the word ‘public use’ in the Fifth Amendment for a reason, because they wanted property rights to be part of our democracy.” Unfortunately not all New Urbanists agree with Norquist. Leading New Urbanist architect Andres Duany, for example, admitted on the same day as the decision that he would use any means available—including eminent domain and government regulation—to achieve the desired result of more New Urbanist communities.

A National Backlash Could Restore Rights
There may be a silver lining in all of this: Kelo is not merely a bad decision, but one so utterly repellent that it has flamed a firestorm of anger and rebellion across the nation. Concerned citizens now know that, thanks to Justice Stevens and his colleagues, when the wealthy and powerful covet their property, they are without any protection, stripped of their basic Constitutional rights. Distilled to its essence, Justice Stevens’s ruling has not just entitled the rich to prey upon the poor, but it also supports a process that encourages them to do so and thereby grants planners the resources and violence of the state to facilitate their acquisitive interests. Perhaps not since Dred Scott have the weak been so abused by the nation’s highest court.

So what to do? To his credit Senator John Cornyn (R-TX) has lit the match of rebellion with the introduction of the “Protection of Homes, Small Businesses, and Private Property Act of 2005” to prohibit the transfer of private property without the owners’ consent if the transfer is for economic development rather than public use. And House Judiciary Chairman James Sensenbrenner (R-WI) will introduce the “Private Property Rights Protection Act,” which is intended “to restore the property rights of all Americans the Supreme Court took away on June 23.” But more needs to be done, and the Court has handed President Bush an extraordinary opportunity to stand tall in defense of the ordinary people who have stood with him throughout his presidency.

To your side, Mr. President, summon some of the hundreds and thousands of Americans from around the country who have been dispossessed of their homes and businesses by the powerful businesses in search of a better location to sell their soap and socks. Tell these people that you share and embrace their hopes and aspirations to fulfill the American Dream, and promise that you will stand by them and guarantee them equal protection under the law.

Include with theses dispossessed homeowners Susette Kelo, who has struggled for 7 years against all odds to preserve her home in New London, Connecticut. Invite Senator Joe Lieberman (D-CT) to join you on behalf of his constituent, and tell the world that this shall not stand. Tell them, too, that you are asking the U.S. Congress to enact emergency legislation to stay the Court’s destructive ruling and allow her to stay in her home. And once her home is secured, work with Congress to enact a comprehensive package of legislation to restore to the American people the property rights they once enjoyed under the protection of the Constitution. You should also urge Congress to extend similar protections from the increasing abusive land use restrictions—imposed under the guise of smart growth principles—that are making homeownership unaffordable for moderate-income families.

Set the fire, Mr. President, and let the American people have their Tea Party against corporate privilege.

Ronald D. Utt, Ph.D., is Herbert and Joyce Morgan Senior Research Fellow in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Notes:
[1] Kelo was brought by homeowners in New London, Connecticut. In the name of economic development, officials there sought to tear down a neighborhood to make way for a private office complex, which the town planners considered to be a higher use of the land. See “Eminent Domain Without Limits? U.S. Supreme Court Asked to Curb Nationwide Abuses,” Institute for Justice Litigation Backgrounder, at http://www.ij.org/private_property/connecticut/con_property_backgrounder.html.

[2] See Ronald D. Utt, Ph.D., “Can Both Sides of the Sprawl Debate Find Common Ground on Property Rights?,” Heritage Foundation Webmemo No. 730, April 25, 2005, at http://www.heritage.org/Research/SmartGrowth/wm730.cfm.