Eminent Domain Destroys Affordable Housing

On October 6, the St. Louis Post-Dispatch criticized two attempted eminent domain seizures in the suburban communities ofSt. Charles and Sunset Hills. The editorial board wrote movingly about the injustice of booting middle-class families out of their homes to make room for a shopping mall or luxury condo simply because it will bring in more tax revenue. But the Post-Dispatch insisted that eminent domain is needed for “clearing crime-ridden slums for replacement with better housing.” They cite the McRee Town redevelopment as an example of how eminent domain can be used for good.

It’s true that McRee Town was a neighborhood in distress. Some buildings had problems so serious that condemnation and demolition was the only option. But the use of eminent domain to seize and demolish entire city blocks was unfair, unnecessary, and wasteful. It destroyed badly needed affordable housing and uprooted dozens of poor people, most of whom were forced to start over in another bad neighborhood.

A better renovation plan for McRee Town would have focused on helping those already living and working in the neighborhood by expanding the stock of affordable housing. That’s what a housing ministry called Neighborhood Enterprises (NE) has been doing for a quarter century. NE managed 23 buildings in the McRee Town area demolished by the city. The story illustrates what’s wrong with “blight” condemnations, and suggests that state policymakers should be very reluctant to give city governments the power to condemn entire neighborhoods.

The properties renovated and managed by NE were nothing fancy, but they consistently passed city inspections and they provided decent, low-rent housing to people struggling to make ends meet. According to NE president Jim Roos, many other buildings in the demolition area needed repairs, but were structurally sound and could have been easily renovated. Instead, the city “clear cut” the old housing and replaced it with town homes starting at $130,000 and single-family homes starting at $180,000. That was simply out of reach for Roos’s McRee Town tenants, who paid $275 to $550 per month in rent.

It didn’t have to happen that way. For five years, Jim Roos, the president of Neighborhood Enterprises, pleaded with the Garden District Commission to employ a selective re-development plan that demolished the worst buildings but saved those that were structurally sound. Roos argued that he could help the city expand the stock of affordable housing at minimal cost to taxpayers.

Instead, Roos says, he and other property owners were ignored and excluded from the planning process. The GDC pressed ahead with their vision of the new McRee Town—a vision without much room for low-income residents. Because the Commission had sweeping eminent domain authority, there was nothing property owners and residents could do to stop the plan. When NE refused to sell their buildings, the GDC used the power of eminent domain to seize the property, relocate the tenants, and demolish their homes. Because the compensation NE received was about half of what they would need to acquire comparable property anywhere in the city, they have been forced to cut back on the number of units they offer to low-income residents. And no new affordable housing was built in the McRee Town neighborhood.

“Clearing” slums is easy. But it doesn’t solve the problems of the people who inhabit them. Affordable housing is scarce, and it gets scarcer every time more of it is condemned by the city. Instead of taking a bulldozer to distressed neighborhoods, we should find ways of rebuilding them in a way that gives a leg up to their current residents. But sadly, city officials seemed more interested in attending ribbon-cutting ceremonies for grandiose re-development plans than meeting the needs of actual residents. And because they have sweeping eminent domain powers, they had little reason to pay attention to the concerns of existing property owners or residents.

It’s certainly troubling when a city government seizes a middle-class person’s home in the suburbs to build a shopping center simply because the shopping center will generate more tax revenue. But how is it any better to demolish the homes of poor people in the city to build homes for middle-class people? Low-income Missourians, most of whom are already struggling to find safe, affordable housing, deserve better.

Timothy B. Lee is an editor at the Show-Me Institute.