Monthly Archives: August 2011

U.S. Commission on Civil Rights Looks Into Eminent Domain Abuses

As we noted earlier (click here ), the subject of misusing the eminent domain/redevelopment process as a means of displacing unwanted minority populations is back in vogue, according to the U.S. Justice Department.

Also, the U.S. Commission on Civil Rights has been holding a hearing on abuses of eminent domain today, August 12th. Thanks to modern technology, the video of today’s hearing is available now on C-Span; click here

We will have some comments after we get a chance to look at the video again, but for now we must share with our readers our amazement over the testimony of Professor Peter Byrne of Georgetown University, who presented a sugar-coated image of redevelopment, assuring the Commission that any problems that may have once existed are now safely in the past. He even had the chutzpa to contradict Professor Ilya Somin of George Mason University, whose testimony preceded Byrne’s.

Suffice it to say for now that even as Prof. Byrne was extolling the virtues and fairness of redevelopment and assured the Commission that abuses of it were in the past, he failed to take note of the fact that even as he spoke, the U.S. Justice Deprtment has been suing midwestern cities over their abuses of the process of redevelopment to expel unwanted minority populations. Click on the link on the first line of this post.

Follow up. The Commission will receive public comments for 30 days after August 12, 2011, So if you have a story about eminent domain abuse, this is the time to get it on paper and send it to the Commission. Be brief, truthful and accurate. You can write to the Commission at:

U.S. Commission on Civil Rights, 624  9th Street, NW, Washington, DC, 20425

 

 

California Supreme Court to Review New Redevelopment Legislation

The California Supreme Court has granted review on a petition by the California Redevelopment Association, challenging the constitutionality of the recent legislative budget compromise whereby redevelopment agencies would not be abolished, provided they share their revenues with the state. Thus, earlier this week, Los Angeles has agreed to fork over $97 million to the state in order to keep its redevelopent agency in business. See David Zahniser, Los Angeles’ Redevelopment Agency Still Alive After Budget Deal, L.A. Times, August 11, 2011.

The state Supreme Court also issued a stay order, freezing enforcement of the legislation’s provisions, pending a court decision on the merits. So stay tuned. It shouldn’t be too long a wait, since the court also ordered expedited briefing.

The redevelopment agencies are arguing that under Proposition 22, passed by the voters in 2010, local funds may not be allocated to the state, so the allocation requirement is unconstitutional. However, the legislation under review provides that redevelopment agencies are not required to comply with the allocation requirement. But if they do not, they will be abolished.  Moreover, since redevelopment agencies are creatures of statute, it is not obvious why the legislature that created them cannot abolish them as well.

Finally, if the court sides with the redevelopment agencies, that will create another deficit hole in California’s already Mickey-Mouse state budget.

So stay tuned.

Is the Use of Urban Renewal as “Negro Removal” Coming Back?

Some of our older readers may recall the bad old days, when urban renewal was widely used to get rid of poor minority communities through the use of eminent domain. At the time, some wit came up with the phrase “Urban Renewal is Negro Removal,” and in short order that was improved upon by black comedian-turned-activist Dick Gregory who opined that “Urban renewal is Negro removal, except in California we call it freeways.” Though it never received much publicity, there was merit to Gregory’s cynicism. Bernard Frieden and his co-author Lynn Sagalyn describe instances of that phenomenon in their book Downtown, Inc. – How America Rebuilds Cities, where they take note of documented instances of this tactic, notably in Minnesota.

Eminent domain, although not for redevelopment purposes, was also used in Illinois in the 1960s, in the notorious Deerfield Park litigation, where the plaintiffs charged that their new, “equal opportunity” residential subdivision was being condemned ostensibly for a park, in order to prevent sales of suburban homes to African-American buyers on an equal opportunity basis. The courts denied relief, holding that if the city thought there was a need for that park, that was conclusive for eminent domain purposes, and would not be questioned.

Though the racial element was not dealt with explicitly in Berman v. Parker, the U.S. Supreme Court approved the taking and destruction of the Southwest quarter of the District of Columbia in the name of slum elimination, and to relieve the poor inhabitants of the area of the deplorable conditions in which they lived at the time. The “new” Southwest, went the story, would improve things — the redevelopment law provided that at least one-third of the new buildings to be built there would be suitable for low-income folks, and would have to offer low-cost housing for $17/per month per room. What a deal!

Of course, as anyone who has been to Washington in the last half-century knows, the “new” Southwest turned out to be quite different than this planner’s vision. It turned out that after the Supreme Court decided Berman, that low-cost housing provision of the redevopment law was repealed. You can get the full story from an article by Amy Lavine, Urban Renewal and the Story of Berman v. Parker, 42 Urban Lawyer 423 (2010).

We can attest to the accuracy of Ms. Lavine’s article because your faithful servant lived in that area in the early 1960s (actually, in one of those modernistic aluminum townhouses depicted in Ms. Lavine’s article on p. 463), and he can attest from personal observation that at that time, some 10 years after Berman, the area was still largely bulldozed flat and vacant, and around the very few new housing structures built in the area, you didn’t see many dark faces. Later, the Wall Street Journal reported that affluent middle class tenants living in the new apartments built there went on a rent strike to protest high rents.  So whatever went on there, it did not benefit those poor slum dwellers whose plight was used as justification for the taking.

In short, Justice Douglas may have talked a good game in the Berman opinion about relieving the deplorable conditions in which the pre-Berman occupants of the Southwest lived, but in the event nothing was done for those poor folks. There were no relocation laws at the time, so they were simply bulldozed out of the way, typically without compensation because being poor they were mostly month-to-month tenants and as such had no compensable leasehold interests. So they were shoved into Northeast Washington and Anacostia, where they had to live in worse slums costing them more in rent.

Now, the Washington Times brings a dispatch that the U.S. Justice Department has filed a lawsuit against the city of Joliet, Illinois, charging it with racial discrimination because it has filed an eminent domain action for redevelopment, to take privately-owned low-cost housing whose occupancy is 95% African-American. Jerry Seper, Eminent Domain Used to Push Out Blacks, Suit Says, Washington Times, August 7, 2011. Click here. The lawsuit charges that the city has failed to make adequate relocation provisions, so that many of the displaced residents will have no place to move to, and will have to leave town if the taking proceeds. The city denies this, and alleges that the subject property is blighted, and that it has set aside $3.5 million for relocation. We will just have to stay tuned on that one, and see how it all works out.

 

“Junk Science” Is Inadmissible in Court, But Junk Economics is Jim-Dandy

It has been a while since the U.S. Supreme Court decided Daubert v. Merrell Dow Pharmaceutical (1993) 509 U.S. 579, and held that evidence properly presented in court may not include “junk science;” that to the extent scientific matters are admissible into evidence, they must be consistent with prevailing views of the pertinent scientific community. You can’t just make up stuff you find congenial to your client’s interest, get a compliant “expert” witness to mouth it, and treat it as reliable scientific evidence.

But it turns out that when it comes to eminent domain, it’s a whole other story. What passes for “law” in this field may be based on government-presented denial of reality. You don’t believe us, do you?

Take a look at the recent 9th Circuit opinion in Colony Cove Properties v. City of Carson (9th Cir. 2011) 640 F.3d 948. Colony Cove was another one of those wretched mobile home park rent control cases, in which the landlord-park owner lost (don’t they all?) thereby reminding us of the wit of the late, lamented Professor Donald G. Hagman, of UCLA, a fair-minded academic giant in the land-use law field, who once joked that it is an overarching principle of law that “gravel pits lose.” Now, it would appear that gravel pits have been joined by rent-controlled mobile home parks whose owners somehow never manage to present a proper case for relief when they argue that the controlled rent is so low as to deprive them of the value of their land to the point of becoming a taking. Whenever they sue, it’s in the wrong court, either too early or too late – there are even cases saying that it was both too early and too late.

One big problem with rent control in general, is that it does not, in fact, lower or control the cost of housing, and this is a fortiori so in mobile home rent control where incoming new tenants are charged exorbitant rents poorly disguised as prices charged by departing tenants for their mobile homes which are usually left behind because they cannot be moved economically and the departing tenants (who own them) usually lack a place to put them when they move.  Thus in the Guggenheim case (of which more in a moment), in order to get into a rent controlled mobile home park, incoming tenants had to pay on the average over $120,000 to the departing tenants, ostensibly for an old mobile-home coach worth as little as $4600, because that was the only way they could get into the park.

Thus, as demonstrated in Guggenheim, under these circumstances rent control does not control rents; it does the opposite, forcing incoming low-income tenants to pay or finance $120,000 up front in order to gain the “privilege” of living in a nominally rent-controlled mobile home park — that $120 grand being a thinly disguised capitalized value of the right of occupancy at market — not controlled — rents.

As conceded by economists across the ideologivcal spectrum, far from controlling rents,  this type of rent control merely rips off incoming tenants in the name of protecting them. So being an intelligent, well-educated person (which we assume correctly characterizes the readers of this blog) you may well ask: if indeed rent control (which in theory is intended to keep rents down for low-income folks) accomplishes the opposite and actually increases them, isn’t it inherently irrational in operation? And haven’t we been taught in law school that irrational statutes are unconstitutional? Well yes, we were. So what? This is the law of eminent domain, dudes, so what does rationality have to do with anything?

Case in point, the Colony Cove court’s discussion of this matter. It relied on a passage from the Guggenheim case (638  F.3d 1111, at 1123). Much could be said about this passage, but it seems to us that to quote it is to make the point:

“Whether the [City’s] . . . economic theory for rent control is sound or not, and whether rent control will serve the purpose stated in the ordinance is sound or not, and whether rent control will serve the purpose stated in the ordinance of protecting tenants from housing shortages and abusively high rents or will undermine their purposes, is not for us to decide. We are a court, not a tenure committee, and we are bound by precedent establishing that such laws do have a rational basis. Students in Economics 101 have for many decades learned that rent control causes the higher rents and scarcity it is meant to alleviate, but the Due Process Clause does not empower courts to impose sound economic principles on political bodies.” Emphasis added.

Wow! Think of what that sort of reasoning could do for energy preservation. Maybe engineering students have for many decades been taught that the laws of thermodynamics make the operation of perpetual motion machines impossible, but the Due Process Clause does not empower courts to impose sound engineering principles on political bodies which are free to legislate the use of such machines if they think that will save energy.

“Whisky’s for drinkin’ – water’s for fightin'”

So said Mark Twain, and his wisdom endures. Since the subject of water allocation in the West in general, and in California in particular, involves takings of water rights and thus may be of interest to our readers, we recommend an article on water problems in California, by Victor Davis Hanson,  Los Angeles Times, Aug. 7, 2011, entitled California’s Water Wars. Click here.

Hanson makes clear how past feats of engineering transformed California’s Central Valley (particularly the Western part of it) into the country’s breadbasket, and how recent regulations are undoing much of that good work for the sake of fish. You may agree or disagree with Hanson’s value judgments, but it is incontestable that application of these regulations that have removed much agricultural land from production, has resulted in a severe decline in agricultural productivity as well as in private incomes and public tax revenues. Is it worth it, particularly these days when California is suffering a major recession and a calamitous decline in tax revenues? Judge for yourself.

A good read, that.

Big Reason Why California Is Not Recovering

Nobody seems to be talking about it, but the cost of housing in California continues to be way too high, as it has been for at least three decades. This remains true even after the collapse of the “bubble.”

For example, take a look at the home depicted below as advertised in today’s real estate tabloid.  It is located in Burbank, a middle class suburban community in the East San Fernando Valley, next to Los Angeles. It  has two bedrooms, one bath, and an area of 708 square feet. The advertised price is $399,000.

 

620 South Griffith Park Drive, Burbank, CA.

In contrast, in North Carolina, in an equivalent or better suburb of Charlotte, like Waxhaw for example, four hundred grand can get you a new or nearly new 3000 square foot, four bedroom brick veneer house, with a three car garage for $300,000.

 

 

As for employment opportunities, Burbank is home to major film and TV studios (the once-famous local aircraft manufacturers like Lockheed moved East years ago), while Charlotte is the nation’s banking headquarters — some two dozen major banks are headquartered there, including the Bank of America which was once a California bank headquartered in San Francisco.

The weather may be nicer in California, but people have to live in homes, not the great outdoors. So moving from California to North Carolina, as many folks have done, is the functional equivalent of getting a large raise, since wages in California are not that much higher, and in the case of many jobs not higher at all. To say nothing of wages on the lower socio-economic rungs where locals face stiff competition from illegal aliens who are willing to work for peanuts.

What it means is that (apart from a few undesirable, foreclosure-ridden areas) there are no entry level homes that can be bought in California by a young family, certainly not with the new, higher down payment requirements. In the past, people may have been willing to go for the “subprime” gimmicks to buy an overpriced home whose ownership strained their resources, as long as market value of homes kept going up and their equities grew. But today, rational people are not willing to do that in the face of declining home values and shrinking home equities.

Lowball Watch – Virginia

We quote without comment the following passage from A. Barton Hinkle, Government’s Mean Streak Shows Up in Va. Beach, Richmond Times-Dispatch, Aug. 5, 2011. For the whole article, click here

“Take a case now playing out in Virginia Beach. In 2009 the city condemned a
spot of beach on the Chesapeake Bay in order to take it for a sand-replenishment
project and public access. According to a December 2008 story in the
Virginian-Pilot, ‘the city wants to dump the sand from the Lynnhaven Inlet
dredging project. . . . Most of the property owners have agreed, and many want
the sand. In exchange, the city is asking the owners to agree that the public
has a right to use the beach for recreation. But some property owners say their
deeds give them the beach.’

“One of the latter group is Tommy Sheets, who owns about a quarter-acre of
beach. The city claimed the property was worth $4,000. But on June 9 of this
year, a jury said the city should pay Sheets $152,000 for his property. In
response, the city has decided — surprise! — it owned easement rights to the
property all along, so it doesn’t have to pay Sheets a dime.

“As Joe Waldo, a lawyer representing the Sheets family, put it recently,
Virginia Beach’s plan to grab the land on the cheap backfired. So now it’s
trying an end-run around its own citizens — not to mention the judicial system
and the city citizens who ruled in Sheets’ favor.

“This is hardly an isolated case. A few weeks ago The Roanoke Times detailed
the case of Ed Jennings, a farmer who has been fighting the Virginia Department
of Transportation off and on for more than three decades. VDOT tried to claim it
owed Jennings nothing for the harm it did him when it rebuilt the I-77 bridge
above his farm, dumping tons of debris onto his property. Judge Josiah Showalter
Jr. disagreed — and a jury will decide what VDOT owes.

“Then there’s the case of Wanda Beavers, who runs the Leave It to Beaver
child-care center in a working-class section of south Richmond. VDOT condemned
part of her property to widen German School Road, and offered the measly sum of
$6,683. Beavers asked for $30,000. The state took her to court instead — and
lost, big-time. A jury awarded Beavers more than $52,000. Add $61,000 in
lawyers’ fees the state had to shell out to fight the case, and the taxpayers
ended up on the hook for almost four times Beavers’ original asking price.”

More Free Lunch for the TVA

You may recall that a while back (in January 2009, to be exact) we blogged about the TVA – click here — noting how the U.S. Supreme Court voiced its concern in the Powelson case that the law of eminent domain involves tension between public interest in the creation of public works and the principle of indemnity to condemnees. Indemnity? To condemnees? Yep, that’s what the court said even though such a suggestion was absurd, and still is. There is no indemnity in eminent domain cases, and there is no danger to the creation of public works, particularly dams which in their heyday were built in profusion, and are being breached these days because they are deemed bad for fish.

What we stressed then and what bears repetition now is that in fact, the prolific creation of TVA dams created no “tension” with the public interest. On the contrary, the TVA made a killing on them because they enabled it to generate cheap electric power (at a50% of the cost of its competitors)  thus bringing lots of power-consuming industry to the area and lots of money into TVA pockets. Eventually, the TVA exhausted its hydroelectric power generation capacity, so it built a lot of coal-burning power plants in the area, thereby inspiring much coal strip mining and  creating all sorts of environmental problems.

The problem with coal burning power plants is that they, well, burn coal and thereby generate lots of ash. The TVA simply piled up the ash into small mountains, and evetually the inevitable happened. In December 22, 2008, one of those giganting ash heaps located west of Knoxville, gave way and inundated nearby privately owned land with 5.4 million cubic yards of toxic sludge. Predictably, the affected owners sued. Now, the Ledger-Inquirer of August 3, 2011, brings the news that the U.S. District Court in Tennessee has granted summary judgment for the government on the plaintiffs’ causes of action based on personal injury, emotional distress and inverse condemnation. Claims for trespass and nuisance, however, will go forward.  Go to http://www.ledger-enquirer.com/2011/08/03/v-print/1680779/judge-further-limits-tva-coal.html

So much for “indemnity.”

Follow up. For a more detailed description of this lawsuit by the associated Press, click here

Meanwhile, Back on the Lower Snake River

Remember our discussion about the ongoing effort by environmentalists to breach four hydroelectric dams on the Lower Snake River in eastern Washington state? Sure you do. But if not, click on http://gideonstrumpet.info/?p=286 and http://gideonstrumprt.info/?p=299 — that should refresh your memory.

So as the sun set in the West, as we wrote those posts in 2009, up in Oregon, U.S. District Judge James A. Redden was pondering the decision whether to order the breaching of those four dams. He is still pondering, although the New York Times avers that he is expected to rule soon on the government’s proposed solution to the problem of impeded migration of salmon up the river (no pun intended). So says William Yardley, Removing Barriers to Salmon Migration, N.Y. Times, July 30, 2011, at p. A10.

So far, this is old news. But this time, the Times reveals some additional factors that will affect the price to be paid if the breaching of dams proceeds apace as it appears to be doing. That’s in addition to the loss of hydroelecric power output sufficient to supply the city of Seattle, and the loss of ability to barge the Idaho crops to market. Those will have to travel by truck, adding to air polution.

We are referring to thealready-made decision to breach an additional two dams on the Elwha River. It seems that there is an Indian tribe living near the mouth of the Elwha, where it has been protected from flooding by those dams. But if the dams are removed, unpredictable flooding will return. So the project will have to include the construction of levees to protect the Indian lands. Even so, there is concern that this may or may not protect the Indians’ homes from floods.

What is conspicuous by its absence from the Times story is information on the cost of this caper. But stay tuned. Your betters in Washington have just sort of approved going into hock to the tune of another couple of trillion — that’s with a “t,” just as we were beginning to get used to saying billion, with a “b.”

Disclaimer: We are as fond of salmon as the next fellow, but even so, given that the country has just dug the gaping fiscal hole deeper, and shows no sign of being able to extricate itself from it in the foreseeable future, this may not be the wisest expenditure of increasingly shrinking public funds. In the meantime, enjoy your gravlax.

Oh, we almost forgot. Why is it that judges are deemed perfectly competenet to pass judgment on technical/scientific matters when it comes to government decisions to tear down dams, but are plumb unable to do so when it comes to decisions to put ’em up in the first place, and to condemn land for them? If you know the answer to that one, do let us know.

Follow up. For another article on this subject, see the National Geographic’s coverage of it. Ann Minard, Will Dam Removal in the West Restore Salmon, July 25, 2011 — click here . Note that in spite of this article’s generally laudatory tone, what comes through is that the dam owners are acquiescing in the tear-down because the cost of dam relicensing, if pursued, would be prohibitive. And so, much clean, sustainable electric power generation is being sacrificed for. . .what?  Check out the letters to the editor that follow the National Geographic article, for data that cast considerable doubt on the conventional wisdom underlying this effort.