We just came across an article (Nicole Gelinas, Eminent Domain as Central Planning, City Journal, Winter 2010, Vol. 20, No. 1 ( http://www.city-journal.org/2010/20_1_eminent-domain-abuse.html ). It reviews the recent controversial New York condemnations (the Goldstein and Kaur cases, as well as the upcoming Willets Point redevelopment project), and concludes that the conceit of central planning lies at the heart of the problem because central planners’ endeavors are not as efficient and effective as those of the free market. Strangely enough, that was the view voiced by Justice Stevens who, reacting to the uproar that followed his handiwork in the Kelo case, expressed a similar personal belief in his speech to the Nevada Bar Association, even though he explained that his ruling in Kelo was compelled by precedent — a sort of a the-devil-made-me-do-it defense.
The City Journal article is interesting and written for the intelligent layman rather than for eminent domain mavens. We recomment it to our readers. But as Zsa Zsa Gabor put it, “Nobody’s perfect, dollink,” so it may be appropriate to say something about it. To the extent the term “central planning” conjures up a vision of some sort of expert body that is devoted to community planning, and makes its planning recommendations after careful deliberation, we beg to differ. This vision reminds us of the words of the late, lamented Richard Babcock, in his time the preeminent land-use lawyer from Chicago, who derided the idea that land-use decisions are made by a group of geniuses, with an average IQ of 150, who sit around and debate public policy with an eye on deciding what’s best for the community. Alas, reality is quite different.
Many — possibly most — redevelopment decisions are made by individual developers — New York’s Bruce Ratner being the proverbial Exibit A — who identify an urban area that seems to them to be a likely spot for construction of a lucrative project, and then proceed to persuade the local government to get the land in question for them. It is not unusual to see cases where a developer approaches a land owner and offers to buy the latter’s property, but when negotiations fail to produce a deal, the local municipality miraculously declares the subject property to be “blighted,” and takes it for redevelopment by — who else? — the developer who was unable to acquire it in a consensual transaction.
That may indeed be a form of “planning.” But it isn’t central, and no planning at all in the real sense of that word. It is simply an individual decision made by the developer in pursuit of his own economic self-interest on an ad hoc basis. The resultng project is usually nothing more than a private venture that sometimes fails, as do other economic ventures. Redevelopment, like other municipal land-use decisions, is the product of the rough and tumble world of urban politics — a process that is not pretty. But alas, that’s how revelopment laws and sausages are made. If you want to see a good example of this messy reality, read the Minnesota Supreme Court’s decision in Johnson v. Minneapolis, 667 N.W.2d 109 (Minn 2003), and its federal-court precursor Societe Generale Immobiliere v. Minneapolis Community Development Authority, 44 F.3d 629 (8th Cir. 1984).
Central planning was involved in the old-style redevelopment of the 1960s, when cities took large swaths of land, razed it and then tried to interest developers in building on it — as was the case in the well known Washington, D.C. project that gave us the wretched Berman decision. But as old timers who read this may recall, even if successful, those projects were spectacularly inefficient. They gave rise to the phenomenon of large tracts of razed urban land sitting vacant for years or even decades, before it was built out, such as “Hiroshima Flats” in St. Louis, and “ragweed acres” in Detroit. The Bunker Hill redevelopmeny project here in Los Angles, was set into motion in the late 1950s, but even today, there is still some vacant land up there. Indeed, even in Berman itself it took forever for the redevelopers to build out the project. We lived there in the early 1960s, ten years after Berman came down, and by then the project area was still largely vacant land.
That is why government switched to today’s TIF-financed style of redevelopment that is usually not undertaken until a redeveloper is identified, and a deal is made.