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Eminent Domain and Civil Rights
“[t]he burden of eminent domain has and will continue to fall disproportionately upon racial and ethnic minorities, the elderly, and economically disadvantaged.” Unfettered eminent domain authority, the NAACP concluded, is a “license for government to coerce individuals on behalf of society’s strongest interests.”
That is the NAACP quoted in an op-ed by David Beito and GMU law prof Ilya Somin.
Hat tip to The Beacon.
Posted by Alex Tabarrok on May 1, 2008 at 01:15 PM in Law | Permalink
Comments
Now, if only the NAACP could be convinced that most other forms of coercion for work the same way, that would be progress. That and an understanding that economic redistribution will always benefit politcally favored groups, no matter how the policies are structured.
Posted by: Garrett Schmitt at May 1, 2008 1:34:12 PM
Why feign shock? Given a variety of possible routes for a highway, which 20 houses would you want them to buy? The 20 that cost $100K/per or the 20 that cost $2M/per?
Yes...Eminent domain is bad. But bring it up with Alexander Hamilton.
Posted by: Mike at May 1, 2008 3:29:34 PM
Even if you assume that highways were built completely by private builders and there was no such thing as eminent domain wouldn't you have exactly the same problem as there would be extremely strong economic incentives to route the private toll roads through poor neighborhoods where land is the cheapest?
Give me one rational reason to think that private profit maximizing actors would do anything different.
Posted by: spencer at May 1, 2008 3:33:28 PM
A point made by Clarence Thomas in his Kelo dissent, iirc.
Posted by: Patrick R. Sullivan at May 1, 2008 3:54:39 PM
Even if you assume that highways were built completely by private builders and there was no such thing as eminent domain wouldn't you have exactly the same problem as there would be extremely strong economic incentives to route the private toll roads through poor neighborhoods where land is the cheapest?Give me one rational reason to think that private profit maximizing actors would do anything different.
It wouldn't be a problem if everything was voluntary. The trouble people have with eminent domain is that it is involuntary. Sure, roads might still be more likely to go through lower income areas than rich areas, but people are not going to be pissed off since the people in the poor area consent - and people are more likely to be fairly compensated, because the property owners could say "You better make this deal worth it to me if you want to build your highway here".
If you put a gun to the head of a black dentist, and said "You must fill my cavity, and I will pay you whatever I feel like it", if would be slavery and the NAACP would be pissed off. Where as, if you went to a black dentist and offered to pay him to voluntarily fill your cavity, there would be no controversy. Even though the outcome is the same (black dentist fills your cavity), in the first example it is extortion, in the second example it is friendly business.
We aren't complaining that roads are going through poor black areas... we are complaining that poor black people are forced against their will to relinquish their property, usually at below-market-value. What socialists often seem to forget is that most people don't enjoy a gun pointed to their head... actions that normally would be uncontroversial become intolerable when we are forced to participate under the threat of violence.
Posted by: Rex Rhino at May 1, 2008 4:33:47 PM
The takings in question go far beyond highways. Most are for "economic development" or "urban renewal" and the land in question is transferred to other private parties (usually politically influential interest groups). Both legally and economically, such condemnations are far more dubious than those for basic government-owned infrastructure.
Posted by: Ilya Somin at May 1, 2008 4:42:32 PM
Show me some data showing states using eminent domain to take land at below market value. And I do not mean a single example. Show me that it is significant among poor and/or black people. Sound like urban myths to me.
Posted by: spencer at May 1, 2008 4:58:49 PM
Spencer writes:
"Show me some data showing states using eminent domain to take land at below market value."
Why not let the market decide? Instead of the government offering "fair market value" and kicking poor people of their land, it should just bid high enough so that people agree to be kicked off their land. My suspicion is that this price would be significantly higher than what the government currently offers.
Posted by: Michael at May 1, 2008 6:01:07 PM
I did not know eminent domain became popular again, since executive order 13406. in the early 2000s, business like target were forcing poor people to sell them their houses to build a target by saying something like, if you do not sell us your house at FAIR MARKET VALUE, we will be forced to execute eminent domain against you. And apparently the federal government was siding with large corporations because they could increase the tax value of any poor region by building their store on it. This threat was also used against small farmers to sell out to larger farming companies under the same principle, that the larger farming company can produce more on the same land.
However, I do not see any evidence supporting the NAACP's claim that the federal government is now disobeying that executive order, although local and state governments may legally still use eminent domain.
And what is "Economically disadvantaged"???? If you can barely afford your $30,000 house, does that make you economically disadvantaged? Aren't you always disadvantaged if you make less money than Wal-mart? Also, if you can afford a $300,000 house, but choose to live in a $30,000 house for whatever reason, you still lose your house if the government wants you to. And might I add you lose any improvements made above what the avg. home has in that bracket, not tax bracket. So I would have to conclude that “[t]he burden of eminent domain has and will continue to fall disproportionately upon," anyone who happens to live in a cheap house on property that the local and state governments wants to use.
The only unfair thing about eminent domain is that it does not compensate for additional transportation costs to commute to work, and the hassle of moving, moving further away from your friends, and whatnot. But I guess on average, the NAACP is correct, if they have statistically significant data that says "racial ghettos are being moved by eminent domain". And wouldn't that actually be a good thing, to disperse the 3 ghettos left in this country by giving the inhabitants the means to move out of them??
Posted by: brainwarped at May 1, 2008 6:02:51 PM
I'm a retired business economist. I never paid much attention to libertarian economics until the last few years when I started reading the different GMU blogs.
I had always found the concept of libertarian economics appealing. But the one thing I have learned over the last few years of reading the different GMU economics blogs is never believe anything they say. Maybe you can live in your fanasty world. but I have learned to demand supporting data before I accept any claim by anyone from the GMU economics department.
Posted by: spencer at May 1, 2008 7:34:48 PM
michael -- your answer to my request for some data does not surprise me.
It is exactly the type of answer I would expect from a libertarian -- long on concept and short on facts.
Posted by: spencer at May 1, 2008 7:37:38 PM
brainwarped -- this is a classic example of what I am talking about.
You claim the federal government is using eminent domain to force poor people out of their homes for a target or other big box retailer.
But it is state and local governments that do this, not the federal government.
If you are so wrong on a basic detail like this, why should I take anything you say seriously?
Typical libertarian analysis -- can not get any of your facts right.
Posted by: spencer at May 1, 2008 7:44:32 PM
Eminent domain fits nicely with the government being the actual landowner and others being landholder. A private landowner could theoretically turf out a tenant without any compensation.
Posted by: Gil at May 1, 2008 10:59:32 PM
Interesting point Spencer (first comment), but why are you focused on highway building? The main point of the linked piece is the fact that they are using eminent domain to build things other than roads. At least with roads, we can probably agree that a below market value taking results in lower taxes than would otherwise hold. But I can think of at least one reason why your rational actor in a market might want to build a shopping development in a more upscale neighborhood. And I can think of at least one reason why a rational actor would rather have the state or city do it for him.
In answer to your request for evidence, please consider Patricia Munch, "An Economic Analysis of Eminent Domain," JPE, June 1976. "In practice, prices paid under eminent domain may differ systematically from the 'fair market value' standard, depending on court costs of buyer and seller. Evidence from urban renewal support the hypothesis that, due to the structure of court costs, high-valued properties receive more than market value and low-valued properties receive less than market value." Posner goes on to explain three reasons why this could be in Economic Analysis of Law. Unfortunately, they're Chicagoists, so probably no more convincing than GMU economists and law professors.
Posted by: Eric H at May 1, 2008 11:55:52 PM
Spencer -
Maybe I was unclear, or maybe you misread my lengthy response. The use of eminent domain by state and local governments for building private stores was upheld by the supreme court (which I called the federal government). But I am having trouble finding a news article, after 2006, that supports the claim of the NAACP. Clearly, that quote was not current, after reading the article. Also, it is Friday, and I still cannot find a news article on this issue. If eminent domain issues are still going on, I would have to think it is small businesses that are being forced to move. After all, if you want your wal-mart to be profitable, you put it in the middle of a lot of houses or a marketplace, you don't knock down all the houses and expect customers to come from the next state over. Thanks for calling me a libertarian, that was a first.
Posted by: brainwarped at May 2, 2008 9:52:27 AM
Spencer - "Show me some data showing states using eminent domain to take land at below market value."
Spencer - "But the one thing I have learned over the last few years of reading the different GMU economics blogs is never believe anything they say."
Let's go in order:
The thing about real estate is that every piece is unique, even identical buildings are unique do to the location of the land they are built on. Thus fair market value is whatever the buyer and seller agree to. If a normal agreement is made at gun point it is made under duress and is not binding. However whether it's local, state, or federal government, they generally overlook that fact. The theory is in our favor, so it's up to you to provide facts disproving it, and good luck finding data on what people would have sold their land for had there been no gun involved.
Part II
So why are you still here?
Posted by: Mason at May 2, 2008 10:07:09 AM
"Give me one rational reason to think that private profit maximizing actors would do anything different."
Do they? Of course. Because they aren't allowed to do what government can do.
"Show me some data showing states using eminent domain to take land at below market value."
Who said anything about market value? Maybe I missed it.
How 'bout I come take your dog and then pay you market value?
Posted by: Andrew at May 2, 2008 2:52:48 PM
