What’s Happening to the Real People Involved in the Kelo Eminent Domain Case
Welcome Volokh Conspirators!
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A blogswarm of energy and some instances of state legislative response have taken place in the wake of The Supreme Court’s ruling in the Kelo v. New London, Connecticut case, which in essence ruled that the government can take your property if some other person or entity convinces them that they can put your land to “better” (purposefully vague) use. In other words, the government’s power of eminent domain, which used to be limited to public purposes, such as building roads, bridges, etc., has now been broadened to the point of there being no meaningful limit.
Jeff Michael, whose blog’s normal focus is on consumer debt, credit, and personal finance, notes that what has been lost in all of the uproar are the horrors being visited on the losers.
I agree. I haven’t seen this covered anywhere else except the weekly community paper I’ve linked to, though that article goes back almost a month, and am shocked both at what is happening and at the lack of attention (and note, the whole contentious case isn’t necessarily over):
The U.S. Supreme Court recently found that the city’s original seizure of private property was constitutional under the principal of eminent domain, and now New London is claiming that the affected homeowners were living on city land for the duration of the lawsuit and owe back rent. It’s a new definition of chutzpah: Confiscate land and charge back rent for the years the owners fought confiscation.
In some cases, their debt could amount to hundreds of thousands of dollars. Moreover, the homeowners are being offered buyouts based on the market rate as it was in 2000.
….. (Matt) Dery owns four buildings on the project site, including his home and the birthplace and lifelong home of his 87-year-old mother, Wilhelmina. Dery plans to make every remaining effort to keep his land, but with few legal options remaining, he’s planning for the worst.
And for good reason. It’s reasonable to think that people who purchased property years ago (in some cases, decades ago) would be in a position to cash in, especially since they’re being forced from their homes. But that’s not the case.
The New London Development Corp., the semi-public organization hired by the city to facilitate the deal, is offering residents the market rate as it was in 2000, as state law requires. That rate pales in comparison to what the units are now worth, owing largely to the relentless housing bubble that has yet to burst.
“I can’t replace what I have in this market for three times [the 2000 assessment],” says Dery, 48, who works as a home delivery sales manager for the New London Day .
…. And there are more storms on the horizon. In June 2004, NLDC (New London Development Corporation) sent the seven affected residents a letter indicating that after the completion of the case, the city would expect to receive retroactive “use and occupancy” payments (also known as “rent”) from the residents.
In the letter, lawyers argued that because the takeover took place in 2000, the residents had been living on city property for nearly five years, and would therefore owe rent for the duration of their stay at the close of the trial. Any money made from tenants — some residents’ only form of income — would also have to be paid to the city.
With language seemingly lifted straight from The Goonies , NLDC’s lawyers wrote, “We know your clients did not expect to live in city-owned property for free, or rent out that property and pocket the profits, if they ultimately lost the case.” They warned that “this problem will only get worse with the passage of time,” and that the city was prepared to sue for the money if need be.
“It seems like it is simply a desperate attempt by a nearly broke organization to try to come up with more funds to perpetuate its own existence,” Bullock wrote. He vowed to respond to any lawsuit with another.
…. An NLDC estimate assessed Dery for $6,100 per month since the takeover, a debt of more than $300K. One of his neighbors, case namesake Susette Kelo, who owns a single-family house with her husband, learned she would owe in the ballpark of 57 grand. “I’d leave here broke,” says Kelo. “I wouldn’t have a home or any money to get one. I could probably get a large-size refrigerator box and live under the bridge.”
Tyranny, thy name is Kelo.
Alabama has done the right thing (SEE UPDATE 4–maybe not), as it “became the first state to enact new protections against local-government seizure of property allowed under a Supreme Court ruling…”
The other forty-nine states need to follow Alabama’s lead, and quickly.
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UPDATE: I’ve been attempting to find any new information on what is actually happening to the Kelo Seven victims, and haven’t found anything, even at the web site of the Institute for Justice, which represented the property owners. If anyone has news (hopefully with links), E-mail me.
UPDATE 2: August 12 Outside the Beltway Jammer.
UPDATE 3, August 14: This Von Mises Blog post says in the second paragraph that “The IFJ (Institute for Justice) also points out that Connecticut legislators have called for a moratorium on the use of eminent domain until their legislatures can revise property laws. Even the City of New London has agreed to allow Susette Kelo to stay in her property for now.” But there is no indication as to whether the meter is still running on the back rent.
UPDATE 4, August 15: A commenter at Volokh suggests that there’s less to Alabama’s law than meets the eye since eminent domain on “blighted neighborhoods” is still allowed. If so, I would agree with the commenter that this is a major disappointment.
UPDATE 5: Reason’s Hit and Run Blog picks up the story (warning: author throws an F-bomb in the first sentence).
UPDATE 6: Junkyard Blog says “You’ve got to be kidding me.”
