We began the week by coming across two excellent articles that should be of interest to the faithful readers of this blog.
First, we recommend an article by Law and History Professor Emeritus James W. Ely, Jr., of Vanderbilt University Law School, entitled “Just Compensation” Does Not Necessarily Mean “Fair Compensation,” The Practical Real Estate Lawyer, May 2014, at p. 9. A good read, that.
Professor Ely takes a historian’s look at the evolution of the concept of “just compensation” in American law of eminent domain. We can’t help noting our pleasure in reading this piece because Professor Ely, a heavy hitter in his fields, if ever there was one, is “singing our song.” See Gideon Kanner, “Fairness and Equity” or Judicial Bait and Switch? It’s Time to Reform the Law of “Just Compensation,” 4 Albany Gov’t. L. Rev. 38. He begins by noting the natural law origins of the just compensation clause, and contrasts it with the modern judicial twaddle (our choice of words, not his) undercutting the recompense payable to people displaced by eminent domain.
He gets a brownie point in our book for taking explicit note of the fact that the uncompensated losses inflicted on condemnees involve actual economic losses, not just loss of emotional, idiosyncratic values that most professors who write on this subject in law reviews tend to focus on, thereby undercutting the point. If your great-grandpa acquired the subject land by less than politically correct means from Indians way back when, that may be a source of subjective value to you. But denying compensation for that increment of value is not as grating on our moral values as denying compensation for present, objectively determinable elements of value and incidental losses inflicted on condemnees. Those losses (notably business losses) are measurable by conventional valuation techniques, and indeed business losses (notably the loss of business goodwill which can be a valuable, marketable asset) are valuable property that is bought and sold in the market, and readily compensated for outside the field of eminent domain. Business losses are a perfect example of the undercompensation problem, but by no means the only one. We recommend an oldie but goodie on that point, Eminent Domain Valuations in An Age of Redevelopment: Incidental Losses 67 Yale L. Jour. 61 (1957).
One of Prof. Ely’s points (and ours) is that just compensation should be measured by the loss to the owner, not the gain to the taker. It should indemnify the owners for all their demonstrable economic losses. And indeed, the U.S. Supreme Court made loss-to-the-owner the explicit standard as a matter of principle in United States v. General Motors. But when it comes to actually awarding compensation, the courts fall short of this standard.
We could go on like this for a while but we won’t. Better you should spend your time reading Professor Ely’s article. It may or may not make a better man of you, but it sure will make you a better lawyer.
Second, we recommend two short pieces in the planners’ blog Planetizen.com, both by Michael Lewyn, Assistant Professor at Touro Law Center. The first one is The Theory Behind NIMBYism, Planteizen.com, March 12, 2014 http://www.planetizen.com/node/67772 and the other is The Theory of NIMBYism, Part 2, May 5, 2014, http://www.planetizen.com/node/68646?utm_source=newsletter&utm_medium=email&utm_campaign=05052014
Both are short, and written in a readable style that gets to the heart of things. And what is that? Prof. Lewyn points out correctly, that allowing NIMBYism to control zoning is a form of promoting a cartel, whereby neighbors — for all the fancy talk about “property values” and all that other good stuff — are merely looking out for their own economic interest at the expense of community values, and in the long run cause housing prices to soar beyond the reach of the middle class — which is exactly what is happening tight now.