Property Rights Still in Danger a Year After Kelo

One year ago today, in the case of Kelo v. New London, the Supreme Court ruled that local governments have wide latitude to transfer property from one private party to another for purposes of “economic development.” The public was outraged. In response, politicians across the nation pledged to enact state legislation to strengthen property rights. Last month, the legislature passed House Bill 1944 into law, which Governor Blunt touted as “protecting the rights of responsible property owners.”

Unfortunately, compared to other states, Missouri’s legislation leaves a lot to be desired. Florida offers a particularly striking contrast. Thanks to action by Florida lawmakers, property owners in the Sunshine State now enjoy robust protections against the abuse of eminent domain for private gain. Missouri property owners, on the other hand, got only crumbs.

Probably the most serious loophole for eminent domain abuse is “blight,” which has become a virtual blank check for city governments to seize private property. One notorious example is in Clayton, one of the most prosperous cities in the St. Louis metro area. At the behest of the Centene Corporation, which wants to build a new headquarters, the city of Clayton is attempting to use eminent domain to force out several small business owners down the street from the company’s current headquarters. They claim that the buildings that house these businesses are blighted, but the buildings don’t look noticeably different from the buildings around them. Those property owners simply had the misfortune of owning property that a larger company wanted.

The new Missouri law does little or nothing to prevent such abuses. The use of eminent domain for the elimination of blight or substandard conditions is still permitted, and no changes are made to the current “anything goes” definition of blight. In contrast, Florida’s reform bans the use of eminent domain to eliminate allegedly blighted conditions. If Centene was located in Florida, it would have to find voluntary ways to acquire the land it wants.

Another example of “blight” abuse occurred in Sunset Hills. The city condemned the entire neighborhood of Sunset Manor because a handful of properties had minor problems. The project fell through due to the developer’s inability to finance the project, and the area has been left in a much worse condition than before.

The new Missouri law would have done little to prevent the Sunset Hills fiasco. If a “preponderance” of the properties in an area are blighted, the legislation allows every parcel in that area to be taken–even those in perfect condition. In contrast, Florida municipalities are only permitted to use eminent domain for truly public purposes such as public roads, parks and utility systems. For truly blighted, slum-ridden and nuisance properties, Florida law allows municipalities to use building codes and nuisance law to force homeowners to eliminate nuisance conditions–powers that are far less subject to abuse than eminent domain. In short, Florida’s legislation would have prevented the Sunset Hills fiasco, but Missouri’s legislation leaves private property vulnerable.

The Missouri law does provide a few token concessions to property owners. Farms are protected from blight takings, and the law provides additional compensation in some cases. But until the “blight” loophole is closed, Missouri property rights will continue to be in danger. Give any property enough time and it will naturally become “blighted” by the terminology currently used in Missouri. Older buildings can become blighted simply because they were built according to different standards with different technology. As long as the law permits an open-ended definition of blight, none of our homes or businesses is safe.

Florida’s legislation is a model for serious eminent domain reform in Missouri and across the nation. Florida’s lawmakers listened to the overwhelming public outrage about the Kelo decision and outlawed eminent domain abuse for private gain. In contrast, Missouri’s lawmakers ducked the hard questions, preferring to tinker around the edges instead. Property owners in Missouri deserve better.

Timothy B. Lee is a policy analyst at the Show-Me Institute. Shaida Dezfuli is pursuing a master’s degree in public policy at the University of Missouri, St. Louis.