• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • CommentGo Back
Download
 
Routing 
Over the past century, Americans who ownproperty—homeowners, landlords, businesspeopleof all kinds, even nonprofit organizations such aschurches and charities—have found themselvesincreasingly entangled in a web of regulatory restrictions that have limited what they can do withtheir property. Imposed in the name of an amor-phous “public interest,” those restrictions haveoften been unwarranted and severe, resulting inuntold personal and financial losses. By century’send they had led to the birth of the property rightsmovement and to a call for both legislative and judi-cial redress. The movement is likely only to grow inthe 21st century. America's founding principles are grounded inthe idea of private property. It is property, after all, thatenables individuals and organizations to exercise theirother rights and enjoy the liberty that property affords. With the rise of the regulatory state duringthe Progressive Era, however, those rights wereincreasingly compromised, especially after theSupreme Court upheld restrictive zoning in 1926.That decision opened the door to a host of "permit-ting" regimes—federal, state, and local—the effect of which has been to tell owners that they can use theirproperty only after they have been authorized to do soby government. That placed immense and often arbi-trary power in the hands of government, leaving own-ers to face a long and expensive series of proceduraland substantive hurdles before they could enjoy theirproperty rights. Although the Court has checkedsome of those restrictions in recent years, owners stillbear the brunt of the burden of justifying their rights.What is worse, the Court recently upheld the govern-ment’s taking and transfer of homes from owners toprivate redevelopers, hoping their projects would cre-ate jobs and tax revenues.To try to address those problems, about half of the states have enacted laws to protect private own-ers’ rights to use their property. While most requiregovernment agencies simply to “assess” whethertheir actions might impinge on property rights, a few provide for compensation to owners and curtailabusive takings, while many more are consideringsuch legislation. At the federal level, Congress hasconsidered three forms of legislation: measures thatwould require such assessments; measures thatwould provide statutory compensation for certainfederal agency actions; and measures that wouldremove procedural roadblocks that frustrate effortsby owners to challenge federal, state, and local reg-ulations of property. To date, however, none of those federal efforts has succeeded.The property rights movement needs to contin-ue to build on its successes. To be effective, howev-er, it must adopt a principled approach. It mustreunite America with its common law and consti-tutional heritage, which affirms that individualshave rights in their property and property in theirrights. Finally, it must recognize that the ultimateprotection for private property will be found inreducing government to its legitimate functions.
The Birth of the Property Rights Movement 
by Steven J. Eagle
___________________________________________________________________________________Steven J. Eagle is a professor at the George Mason University School of Law and the author of 
Regulatory Takings
(3rd ed. 2005). This is a revised version of Cato Institute Policy Analysis no. 404, June 26, 2001.
Executive Summary 
No. 558December 15, 2005
 
Introduction
Property Rights and GovernmentalPower: Two American Tales
The property rights movement has arisenin response to a growing web of confiscatory governmental regulations. Two stories willsuffice to illustrate why the movement isneeded: the first involves a developer, the sec-ond an elderly citizen who wanted to buildherself a retirement home. These stories areunusual only because the U.S. SupremeCourt was willing to hear them. Most victimsof the modern regulatory state are not nearly as fortunate.David Lucas was one of a group of develop-ersof a residential subdivision on the Isle of Pines off the South Carolina coast. As theproject neared completion in 1986, hebought the last two lots for his own account,paying $475,000 for each. He planned tobuild his own home on one lot and a housefor sale on the other. Residential use of thelots was permitted under the regulations inplace at the time of his purchase. In fact,homes stood on lots on either side of his twolots and between them. Before Lucas beganbuilding, however, the state enacted a new Beachfront Management Act aimed at pro-moting tourism and preserving certain flora and fauna. The effect of the act was to pro-hibit Lucas from all but trivial uses of hisproperty, rendering it worthless. In effect, thestate sought to promote its ends at DavidLucas’s expense. If the state had explicitly condemned Lucas’s land for a public park, itwould have been obligated to pay him justcompensation under the Fifth Amendment’sTakings Clause: “nor shall private property be taken for public use without just compen-sation.” Because Lucas still retained title tohis worthless property, however, the staterefused to pay him compensation. He was the victim of what has come to be called a reg-ulatory taking.
1
Not surprisingly, Lucas brought suitagainst the state of South Carolina. Although he lost in the state supreme court,he prevailed in the U.S. Supreme Courtbecause his intended use of the property wasperfectly legitimate—it injured no one—andbecause he had been deprived of all value inthe property.
2
 After ruling in favor of Lucas,the Supreme Court remanded the case to theSouth Carolina courts, where Lucas wasawarded $750,000 for each lot (includingappreciation, interest, and legal costs), andtitle to the lots was transferred to SouthCarolina. The state’s attorney later explainedthat the state had considered keeping the lotsundeveloped but decided instead to sell themto another developer since, “with a house toeither side and in between the lots, it is rea-sonable and prudent to allow houses to bebuilt.”
3
In a striking understatement, JohnEcheverria, then chief counsel for theNational Audubon Society, said that thestate’s decision to sell the property for devel-opment “opens the state to charges of hypocrisy when it is willing to have an eco-nomic burden fall on an individual but notwhen the funds have to come out of anagency’s budget.”
4
 Although David Lucas had his rights vin-dicated by the Supreme Court, Susette Kelowas not so fortunate. Mrs. Kelo, a registerednurse, had moved to the Fort Trumbullneighborhood of New London, Connecticut,in 1997. She purchased her Victorian-era house in 1997 and made extensive improve-ments. She loves the water view, her neigh-bors, and the fact that she can get in a boatand be out in the Long Island Sound in lessthan 10 minutes. After the pharmaceuticalcompany Pfizer Inc. announced that it wouldbuild a $300 million research facility on a siteimmediately adjacent to Fort Trumbull, gov-ernment planners hoped that Pfizer wouldattract new business to the area, thus servingas a catalyst for the revitalization of the dis-tressed city. The state of Connecticut, the city of New London, and its private developmentarm, the New London DevelopmentCorporation, together planned a project for90 acres of Fort Trumbull in order to “com-plement the facility that Pfizer was planningto build.” The project would include a luxury 
2
The property rights movementhas arisen inresponse to agrowing web of confiscatory governmentalregulations.
 
The need for leg-islative protectionof property rightsresults largely from default by the judicialbranch of government.
3
hotel, upscale housing, office space, andshopping, together with other upgrades tothe area that Pfizer requested. The NLDC,which would own the land and lease it to pri- vate redevelopers for 99 years at $1 per year,was given the power of eminent domain—that is, the right to take private property sub- ject to the constitutional requirements thatthe owners receive “just compensation” andthat the taking be for “public use.” After Mrs.Kelo and several other owners refused to selltheir homes, believing that the NLDC want-ed them not for public but for private use, lit-igation followed. The state superior courtpermanently enjoined part of the project, butthe Supreme Court of Connecticut reversed,ruling that economic revitalization of already developed land was a “public use.” In June2005, in
 Kelo v. City of New London,
5
the U.S.Supreme Court affirmed. It held, 5 to 4, that“public use” equated to “public purpose” andthat it would defer to New London’s deter-mination that taking private homes with thegoal of creating jobs and augmenting tax rev-enues would serve the public good.
The Rise of the Property RightsMovement
 Across the nation, dozens of grassrootsadvocacy groups have formed in recent yearsto defend private property rights from assaultby officials at all levels of government.
6
In themonths following the Supreme Court’s
 Kelo
decision, many new groups have formed tofight eminent domain abuse.
7
Those groupshave arisen because officials have aggressively disregarded property rights and courts havedone little to vindicate those rights. Property rights organizations already have achievedsome success by persuading the U.S. Congressand the legislatures of almost every state toconsider property rights legislation.
8
Morethan half of the states have enacted someform of protective statute.Since the protection of property rights is a preeminent function of government, thework of property rights groups is of vitalimportance. Yet zeal alone, without guidingprinciples, cannot restore property rights.With an eye to the first principles of the mat-ter, therefore, this study will review thenature of the threat to property rights in America today and explore the need for fed-eral and state legislation to better securethose rights and the liberty they ensure. It iscrucial that the property rights movement begrounded in moral and legal principle, forwithout such a foundation, resulting legisla-tion could be ineffective and even subversive.Legislation that is essentially reactive,aspiring to remedy the narrow range of abus-es that is in the public eye at any given time,for example, is apt to be piecemeal and undu-ly complicated. Such legislation tends to offerlittle or no protection beyond the preventionof those abuses. Perhaps more disturbing isthe possibility that unprincipled property rights “reforms” might actually undermineproperty rights. Inevitably, opportunists willinvoke the need for property rights “protec-tion” in their quest for special advantage.Their efforts will obscure the meaning of “property rights.” And their successes willlead, ironically, to the expansion of govern-ment, for the largesse they acquire for them-selves must be exacted ultimately from theproperty and taxes of other citizens.In the end, however, the need for legislativeprotection of property rights results largely from default by the judicial branch of govern-ment. The courts of justice were established,after all, to constitute “the bulwarks of a limit-ed Constitution against legislative encroach-ments,” as Alexander Hamilton put it.
9
 Yet,instead of protecting the rights of the peopleby ensuring that legislatures and the agenciesthey authorize remain “within the limitsassigned to their authority,”
10
the U.S.Supreme Court has for many decades acqui-esced in governmental encroachments on pri- vate property rights. While the Court has madeefforts over the past decade to correct the prob-lem, and has done so marginally, its property  jurisprudence thus far has proven inadequate.This study will thus explore the current effortto find legislative relief from the Court’s fail-ure—even though the problem may have beenoriginally due to legislatures.
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...