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Kelo v. City of New London: Takings, 'Public Use,' Urban Waterfront Redevelopment, and the Likely Survival of the Republic

By David G. Mandelbaum and Morton P. Fisher, Jr.
January 04, 2006

In June, the Supreme Court affirmed the power of municipal redevelopment agencies to take property by eminent domain in order to assemble large parcels for economic development. Kelo v. City of New London, No. 04-108 (U.S. June 23, 2005) held that a municipality may take private homes in good condition to transfer them to a private developer as a part of an integrated plan to redevelop an area of New London. This use of eminent domain did not violate the “public use” requirement of the Takings Clause of the Fifth Amendment that, at its core, prohibits the government from taking private property solely to transfer it to another private person to serve a private interest. Kelo follows the Court's decision in Lingle v. Chevron U.S.A. Inc., 125 S. Ct. 2074 (2005), where the Court ruled that a state statute that was not reasonably calculated to achieve its stated goal was not, by virtue of that irrationality, an unconstitutional taking. (In that case, the statute imposed a cap on the rent that oil companies could charge service station owners in Hawaii in order to achieve the stated goal of lower gasoline prices.) 

The Takings Clause has recently been a darling of those who see it as an important constitutional limit on the size or reach of government. Protecting private property against legislatures and bureaucracies has a visceral appeal. However, very important projects to reinvigorate cities and towns, to modernize waterfronts, to clean up environmentally troubled properties, and to provide recreational amenities require assembling large parcels in a coordinated way. In a city, that will require the exercise of eminent domain authority. Thus, the Court has merely acknowledged a government power that had to exist. In doing so, the Court may have refocused the disputes between landowners and governments on the appropriate issues:

1) Is the regulatory or redevelopment action rationally related to some reasonable public purpose, or is the action an inappropriate exercise of governmental authority because it is completely foolish (or a pretext for something else)?

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