Affordable Housing Institute : US

By: David A. Smith

 

Is blight, like beauty, in the eye of the beholder?

Houses to be condemned to make way for Atlantic Yards in Brooklyn. Look blighted to you?

 

Or is blight just a planner’s word for a city’s natural messiness?

 

Does this look blighted to you?

 

Though the question is metaphysical, the answer is anything but.  On that finding of judicial ‘fact’ hinges the most contentious issue in eminent domain for economic development (ED4ED) today, as explored in a protracted City Journal editorial essay by Nicole Gelinas.

 

Spot the blight: Atlantic Yards

 

Indeed, what seems an intractable policy problem – when is ED4ED permissible, and when must it be prohibited? – can be reduced to a problem of boundary –what is blight?  In turn, the entire problem, over which so many hours of legal wrestling have been held, can be solved easily – the fuzzy boundary has to be construed against the party with power, so either define blight objectively and observably, or eliminate it as a valid reason.

 

To see why, we must descend the rabbit hole of current jurisprudence, in particular the way ‘blight’ has been redefined out of all observable meaning (Part 1 of this post), and then resurface elsewhere to see how ED4ED is requisite for urban improvement (Part 2), and hence how to reconcile the competing pressures.

 

1. If property is ‘blighted,’ government can take it.  Lost in the political uproar that followed the Supreme Court’s Kelo v. New London 5-4 decision is that the jurisprudence on ED4ED is half a century old, as laid down in a landmark 8-0 decision in 1954 [Same year as Brown v. Board of Education of Topeka, another landmark – Ed.], Berman v. Parker.  Under Berman, a Supreme Court enraptured with the promise of economic development allowed the District of Columbia Redevelopment Authority to demolish and rebuild a large chunk of southwestern Washington, based on the finding of ‘blight’, which in the 1954 decision was concluded to exist because:

 

“64.3% of the dwellings were beyond repair, 18.4% needed major repairs, only 17.3% were satisfactory; 57.8% of the dwellings had outside toilets, 60.3% had no baths, 29.6% lacked electricity, 82.2% had no wash basins or laundry tubs, 83.8% lacked central heating.”

 

I think anyone today would agree that even in 1954, properties without indoor plumbing, central heating, or running water, constituted blight.  Indeed, under today’s laws – absent in 1954 – those buildings could be condemned as unsanitary. 

 

 The court that gave us Brown v. Board of Education also gave us Berman

 

As Justice William O. Douglas, writing for the unanimous court, put it:

 

Miserable and disreputable housing conditions may do more than spread disease and crime and immorality. They may also suffocate the spirit by reducing the people who live there to the status of cattle. They may indeed make living an almost insufferable burden. They may also be an ugly sore, a blight on the community which robs it of charm, [p33] which makes it a place from which men turn. The misery of housing may despoil a community as an open sewer may ruin a river.

 

Unfortunately for Justice Douglas’s defenders, the greatest blight now inflicted on many northern urban communities are the slums inside, the high-rise public housing properties such as the French banlieues, all of which should be torn down, and many of which have been torn down or are being torn down.

 

We’re not sorry to see you go

 

Justice Douglas was doing more than penning a manifesto.  (No one ever accused Justice Douglas of lacking in legal imagination, as when in Roe v. Wade he found that a right to privacy ‘emanates from the penumbra of the Constitution’ – in other words, that were was no Constitutional language to support it.)  Here he was grounding the decision in an expanded concept of ‘public health’ so as to argue that blight goes beyond the optical:

 

In the present case, the Congress and its authorized agencies have made determinations that take into account a wide variety of values. It is not for us to reappraise them. If those who govern the District of Columbia decide that the Nation’s Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way. ["Nor shall private property be taken for public use without just compensation," the 'takings' clause. -- Ed.]

 

Berman proved to be the opening salvo in a half-century of ever-expanding municipal authority and judicial deference to local findings.  In 1984 the Supreme Court even expanded municipal discretion through the Midkiff decision, so that when in 2005 the court upheld New London’s taking of Suzette Kelo’s house, the remarkable point was not that the city won, but that it won ‘only’ 5-4, and in winning provoked an impressive and sustained voter backlash.  As the City Journal essay put it:

 

In 2005, in Kelo v. New London, the Supreme Court decided that these “public purposes” could even include economic development. But New York’s constitution theoretically holds the state to a higher standard. In 1967, Empire State voters voted not to add a “public purpose” clause to their constitution, preferring to stick with the stricter requirement of “public use.”

 

2. Once ‘blight’ is found, the state can flip property to a private developer.  In parallel with the thread of government having a police power to take small parcels and aggregate them into more rational urban uses ran another thread, that the state can contract these basically technical functions to a private third party.  Here too it was the supremely confident Douglas who wrote the sweeping apologia:

 

The firebrand justice: William O. Douglas

 

Here, one of the means chosen is the use of private enterprise for redevelopment of the area. Appellants argue that this makes the project a taking from one businessman for the benefit of another businessman. But the means of executing the project are for Congress, and Congress alone, to determine once the public purpose has been established. See Luxton v. North River Bridge Co., supra; cf. Highland v. Russell Car Co., 279 U.S. 253.

 

The public end may be as well or better served through an [p34] agency of private enterprise than through a department of government — or so the Congress might conclude.

 

We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects. What we have said also disposes of any contention concerning the fact that certain property owners in the area may be permitted to repurchase their properties for redevelopment in harmony with the over-all plan. That, too, is a legitimate means which Congress and its agencies may adopt, if they choose.

 

Now enters the worm of self-interest, for if the state can gobble up small parcels from small and politically unconnected holders, and bestow them in a bundle on a politically connected private redeveloper, then both the redeveloper and the municipality have a selfish interest in doing so.  Land that is redeveloped becomes more valuable.  Land that is rezoned becomes more valuable.

 

Raise the height, raise the value, raze the incumbents

 

None of this bothered Douglas, taken as he was by a vision of the city council as philosopher-kings:

 

Subject to specific constitutional limitations, when the legislature has spoken, the public interest has been declared in terms well nigh conclusive. In such cases, the legislature, not the judiciary, is the main guardian of the public needs to be served by social legislation.

 

Evidently they trusted their government more back then.

3. By now, the practical definition of ‘blight’ has been diluted into ‘economically underperforming’.  If finding a word translates into giving someone more money, then the word is increasingly found.  With ‘blight’ the key to unlock potent government power to take property from A and then to give it to B, why then will develop, in short order, an active marketplace in finding blight.  [The same thing has happened, on a multi-billion-dollar global scale, in the counterfeiting of certified emission reduction (CER) certificates, otherwise known as carbon credits … but that's another story, about which I may post in the context of India. – Ed.]

 

You cannot outreach the long arm of the law

 

Kelo highlighted this and empowered other opponents of ED4ED, such as in Brooklyn, with its billion-dollar battle over Atlantic Yards, which has been going on for more than half a decade.  As City Journal puts it:

           

Brooklyn’s Prospect Heights, industrial and forlorn for much of the late twentieth century, was looking better by 2003.  Government was doing its proper job: crime was down, and the public-transit commute to midtown Manhattan, where many Brooklynites worked, was just 25 minutes. That meant that the private sector could do its job, too, rejuvenating the neighborhood after urban decay. Developers had bought 1920s-era factories and warehouses and converted them into condos for buyers like Daniel Goldstein, who paid $590,000 for a place in a former dry-goods warehouse in 2003.

 

My $590k says my home isn’t blighted

 

These new residents weren’t put off by the Metropolitan Transportation Authority’s railyards nearby, and they liked the hardwood floors and airy views typical of such refurbished buildings. They also settled in alongside longtime residents in little houses on quiet streets. Wealthier newcomers joined regulars at Freddy’s, a bar that predated Prohibition. Small businesses continued to employ skilled laborers in low-rise industrial buildings.

 

Two questions are entangled here:

 

1. From an urban-vibrancy perspective, would we ‘like’ to see redevelopment?

2. Is the neighborhood ‘blighted’ today?

 

It’s entirely possible to answer Yes to the first question – making us wish we could assemble the land – and No to the second, meaning we cannot do it, tempted though we may be.

 

I can resist everything but temptation

 

Except that it is all too easy to substitute “I am entitled to” for the phrase “I want to” – especially if one is adjudicating for oneself.

 

The state hasn’t let this inconvenience derail its plans for Prospect Heights, however. For seven decades, courts have let New York seize and demolish slum housing if it’s blighted—which New York State defines as “substandard” and “unsanitary.” So the Urban Development Corporation (UDC), a public entity of New York State, decided that the “public use” of Atlantic Yards would be blight removal. The city had already designated part of the neighborhood as “blighted” 40 years earlier, long before its resurgence. As for the rest, the UDC commissioned consultants—previously employed by Ratner—who soon returned the requisite blight finding.

 

I applaud the commission’s consultants

 

4. When courts confront a blight dispute, they tend to defer to the public agency.  Judicial deference to legislative or executive decision-making is generally a sound principle for separation-of-powers. 

 

Property owners have looked to the judiciary to check the overweening grasp of the legislative and executive branches.

 

Yet the courts seem to have difficulty grappling with the municipality’s economic conflict of interest:

 

In Brooklyn, Goldstein and his neighbors have lost their lawsuits—most recently, in New York’s highest court, the court of appeals. In November, the court decided 6–1 that “all that is at issue is a reasonable difference of opinion as to whether the area in question is in fact substandard and insanitary. This is not a sufficient predicate for us to supplant [the state’s] determination.”

 

Goldstein’s got his dander up

 

Except that the harm is unbalanced, because either way, the decision is irrevocable.  If a court finds blight, then owners are dispossessed of their property – uprooted.  With that dispossession goes their entire way of life.  I’m especially sensitized to this by all my global South experience, where slum dwellers are routinely dispossessed of land, once it has become valuable.  The slumdwellers lack legal title – they gained their occupancy rights by squatting – so their claim is weaker, but the principle is the same: occupancy vests political legitimacy.

 

The court essentially abdicated its duty to protect property owners from the governor and the Legislature.

 

I choose to abdicate my duty

 

That’s City Journal’s conclusion, not ours, but it’s in line with the factual record.

 

[Continued tomorrow in Part 2.]

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