Property Rights: Eminent Domain and Regulatory Takings Re

100 FAITH & ECONOMICS
7YVWLY[` 9PNO[Z! ,TPULU[ +VTHPU HUK 9LN\SH[VY` ;HRPUNZ 9L
,_HTPULK
!
"
#
!
9L]PL^LKI`71/PSS:LUPVY-LSSV^7YVWLY[`HUK,U]PYVUTLU[9LZLHYJO
*LU[LY
:
KDWDUHWKHDSSURSULDWHSRZHUVRIWKHVWDWHZLWKUHVSHFWWRSULYDWH
SURSHUW\ULJKWVDQGKRZVKRXOGWKRVHSRZHUVEHOLPLWHG"7KLV
YROXPHRIHVVD\VWDNHVXSWKDWSHUHQQLDOLVVXH
3ULYDWH SURSHUW\ ULJKWV DUH RQH RI WKH VLJQLÀFDQW FRPSRQHQWV RI
D IUHH VRFLHW\ DQG FRQVWLWXWLRQDO SURWHFWLRQ RI VXFK SURSHUW\ LV VHHQ DV
IRXQGDWLRQDO WR D ZHOORUGHUHG VRFLHW\ WKDW UHVSHFWV WKH GLJQLW\ RI WKH
LQGLYLGXDO$V\VWHPRIZHOOGHÀQHGDQGHQIRUFHGULJKWVDOVRLVLPSRUWDQW
IRUHFRQRPLFJURZWK
3URSHUW\ULJKWVDUHQRWDEVROXWHKRZHYHU,IWKHVWDWHLVWRKDYHUHVRXUFHV
VXIÀFLHQWWRFDUU\RXWLWVFRQVWLWXWLRQDOO\GHÀQHGIXQFWLRQVLWPXVWKDYH
WKH SRZHU WR WD[ 7KHUH DUH RWKHU DUHDV ZKHUH DOPRVW DOO FRQVWLWXWLRQDO
GHPRFUDFLHVKDYHOLPLWHGWKHULJKWVRIKROGHUVRISURSHUW\2QHRIWKHPRVW
FRPPRQLVHPLQHQWGRPDLQZKLFKDOORZVWKHVWDWHWRH[SURSULDWHSURSHUW\
IRUWKHSXEOLFJRRGXQGHUFHUWDLQFRQGLWLRQV$QRWKHULVWKHUHJXODWLRQRI
SURSHUW\ZKHUHVXFKUHJXODWLRQVDUHDJDLQMXVWLÀHGE\WKHSXEOLF·VLQWHUHVW
LQKRZSURSHUW\LVXVHG)LUHDQGEXLOGLQJFRGHVDQG]RQLQJDUHH[DPSOHV
RIWKHPDQ\ZD\VLQZKLFKSURSHUW\LVUHJXODWHG
(PLQHQWGRPDLQLVJHQHUDOO\VHHQDVDQHFHVVDU\SRZHUIRUWKHVWDWH
WR RYHUFRPH KROGRXW SUREOHPV ,I WKH JRYHUQPHQW LV WU\LQJ WR EXLOG D
URDGVLWHDGDPRUSODWDVWUHHWDVLQJOHSURSHUW\RZQHUFDQKROGXSWKH
HQWLUHSURMHFWE\UHIXVLQJWRVHOORUE\KROGLQJRXWIRUDSULFHWKDWFDSWXUHV
DOORIWKHVRFLHWDOJDLQIURPWKHSURMHFW7KXVDVH[SUHVVHGLQWKH)LIWK
$PHQGPHQWWRWKH8QLWHG6WDWHV&RQVWLWXWLRQWKHSRZHUWRWDNHSULYDWH
SURSHUW\LVDOORZHG7KHIRXQGHUVDOVRKDGFOHDUFRQFHUQVKRZHYHUWKDW
VXFKSRZHUPLJKWEHPLVXVHGVRWKH$PHQGPHQWVSHFLÀHVWKDWWKHWDNLQJ
PXVWEHIRUSXEOLFXVHDQGMXVWFRPSHQVDWLRQPXVWEHSDLG
5HJXODWLRQ RI SURSHUW\ SDVVHV FRQVWLWXWLRQDO PXVWHU XQGHU WKH SROLFH
SRZHU SURYLVLRQV RI ERWK WKH IHGHUDO DQG VWDWH FRQVWLWXWLRQV 7KH IDFW
KRZHYHUWKDWERWKHPLQHQWGRPDLQDQGUHJXODWLRQRISULYDWHSURSHUW\DUH
FRQVWLWXWLRQDO GRHV QRW JLYH SUHFLVH GHÀQLWLRQ WR H[DFWO\ KRZ IDU WKRVH
SRZHUVH[WHQGRUKRZWKH\DUHOLPLWHG7KHXVHRIHPLQHQWGRPDLQDQG
UHJXODWLRQ KDV H[SDQGHG UDSLGO\ LQ WKH ODVW VHYHUDO GHFDGHV OHDGLQJ WR
FRQVLGHUDEOHFRQWURYHUV\RYHUZKHWKHUWKHSRZHUVDUHEHLQJDSSURSULDWHO\
XVHG
7KHYROXPH Property Rights: Eminent Domain and Regulatory Takings
101
Re-Examined,HQWHUVWKHGHEDWHDWWKLVSRLQW7KHFKDSWHUVLQWKHERRNDUH
EDVHGRQSDSHUVZULWWHQIRUDFRQIHUHQFHDQGWKHFRQIHUHQFHZDVDW
OHDVWLQSDUWRFFDVLRQHGE\WKH6XSUHPH&RXUWGHFLVLRQKelo v. City
RI1HZ/RQGRQ,QWKDWFDVHWKH&RXUWKHOGWKDWXQEOLJKWHGSURSHUW\FRXOG
EHFRQGHPQHGE\DFLW\DQGWKHSURSHUW\FRXOGEHWUDQVIHUUHGWRDSULYDWH
HQWLW\ZKLFKZRXOGFDUU\RXWDQHFRQRPLFGHYHORSPHQWSURMHFW
The Kelo GHFLVLRQ ZDV QRW WKH ÀUVW WR DOORZ FRQGHPQDWLRQ XQGHU
HPLQHQWGRPDLQWREHXVHGWRWUDQVIHUSRZHUIURPRQHSULYDWHRZQHUWR
DQRWKHUEXWWKHGHFLVLRQVWUHQJWKHQHGWKHSRZHURIJRYHUQPHQWHQRXJK
WKDWDVXEVWDQWLDOEDFNODVKHQVXHG$VDUHVXOWPDQ\VWDWHVSDVVHGSURSHUW\
ULJKWVSURWHFWLRQVWDWXWHVLQDQHIIRUWWRSURYLGHPRUHVWULQJHQWOLPLWVRQ
WKHSRZHURIHPLQHQWGRPDLQ
:LWK WKH ULVH RI WKH HQYLURQPHQWDO PRYHPHQW UHJXODWRU\ WDNLQJV RI
SURSHUW\ULJKWVDOVRJUHZUDSLGO\DIWHU3UHYLRXVO\]RQLQJODZVKDG
EHHQWKHPDLQFRQWURYHUVLDOXVHRIWKHSRZHUWRUHJXODWHEXWWKHKRVWRI
HQYLURQPHQWDO UXOHV LQ WKH &OHDQ$LU$FW WKH &OHDQ:DWHU$FW DQG WKH
(QGDQJHUHG6SHFLHV$FWYDVWO\H[SDQGHGWKHUHDFKRIWKHVWDWH
7KLVERRNDVHWRIWKLUWHHQFKDSWHUVLVSULPDULO\DQDUJXPHQWWKDWWKH
SRZHURIWKHVWDWHRYHUSURSHUW\ULJKWVKDVH[WHQGHGWRRIDUDQGDUHYLVLRQ
RIWKHSRZHUVRIHPLQHQWGRPDLQDQGUHJXODWLRQRISURSHUW\LVGHVLUDEOH
2QHFKDSWHUH[DPLQHVWKHFRQWHQWRIWKHVWDWHOHYHOEDFNODVKPRYHPHQWV
DQG FRQFOXGHV WKDW WKH OHJLVODWLRQ SDVVHG LQ VWDWHV GRHV QRW SURYLGH
PXFK RI D UHVWULFWLRQ RQ WKH XVH RI FRQGHPQDWLRQ SRZHUV 2Q WKH RWKHU
KDQG VWDWHV SDVVHG UHIHUHQGXPV GHVLJQHG WR OLPLW WDNLQJV DQG WKRVH
ORRNWREHPRUHHIIHFWLYH
2ULJLQDOO\ HPLQHQW GRPDLQ SRZHUV LQ WKH 8QLWHG 6WDWHV &RQVWLWXWLRQ
DQGLQPRVWVWDWHFRQVWLWXWLRQVKDGDUDWKHUQDUURZFRQFHSWLRQRIZKHUHWKH
XVHRIVXFKSRZHUZRXOGEHDSSURSULDWH,QSDUWLFXODUWKHFRQFHSWLRQRI
SXEOLFXVHLQWKH)LIWK$PHQGPHQWPHDQWWKDWSURMHFWVZRXOGEHRSHQWRWKH
SXEOLF5RDGVZHUHRQHRIWKHPDLQMXVWLÀFDWLRQVRIXVHRIFRQGHPQDWLRQ
WRDYRLGKROGRXWSUREOHPV2YHUWLPHKRZHYHUSXEOLFXVHFDPHWRPHDQ
SXEOLFSXUSRVHSXEOLFEHQHÀWRUSXEOLFZHOIDUH
,W LV HDV\ WR VHH KRZ WKH FKDQJH LQ WKH GHÀQLWLRQ RI SXEOLF PHDQW
VXEVWDQWLDO H[SDQVLRQ RI WKH SRZHU RI JRYHUQPHQW 6HYHUDO FKDSWHUV
GHWDLOKRZORFDOJRYHUQPHQWVFDPHWRXVHWKHFRQFHSWRIUHGHYHORSPHQW
RI DQ DUHD RI WKHLU FLW\ DV D MXVWLÀFDWLRQ IRU FRQGHPQDWLRQ RI SURSHUW\
5HGHYHORSPHQWSODQVRULJLQDOO\IRFXVHGRQZKDWZHUHWHUPHG´EOLJKWHG
DUHDVµEXWWKDWWHUPZDVQHEXORXVDQGDOORZHGPXQLFLSDOLWLHVFRQVLGHUDEOH
IUHHGRP RI DFWLRQ )RU LQVWDQFH D SDUW RI D FLW\ FRXOG EH ´IXQFWLRQDOO\
REVROHWHµ PHDQLQJ WKDW KRPHV ZLWK RQH EDWKURRP FRXOG EH FRQVLGHUHG
EOLJKWHGS7KHKeloGHFLVLRQIXUWKHUH[SDQGHGJRYHUQPHQWSRZHUV
E\UHPRYLQJWKHQHFHVVLW\RIÀQGLQJEOLJKWDQGVWDWLQJWKDWWKHH[LVWHQFH
RIDFLW\GHYHORSPHQWSODQZDVVXIÀFLHQWJURXQGVWRMXVWLI\WKHWDNLQJRI
102 FAITH & ECONOMICS
SULYDWHSURSHUW\RQWKHEHKHVWRIDSULYDWHGHYHORSHU
9DULRXVFKDSWHUVSRLQWRXWWKHLPSOLFDWLRQVWKDWÁRZIURPWKHH[SDQVLRQ
RIWKHFRQFHSWRISXEOLFXVH)LUVWFLWLHVZLOOPRVWOLNHO\WDUJHWKRXVLQJDQG
UHWDLOHVWDEOLVKPHQWVWKDWDUHEHORZWKHPHGLDQYDOXHRISURSHUW\EHFDXVH
WD[UHYHQXHZLOOEHLQFUHDVHGE\WDNLQJWKHSURSHUW\DQGFRQYHUWLQJLWWR
DXVHWKDWKDVDKLJKHUDVVHVVHGYDOXH7KHUHIRUHFLW\JRYHUQPHQWVZRXOG
SXVK IRU WKH XVH RI FRQGHPQDWLRQ EH\RQG WKH SRVVLEOH HIÀFLHQF\ JDLQV
IURPWKHORZHULQJRIWUDQVDFWLRQFRVWV7KH\VWDQGWRUHFHLYHDWD[ZLQGIDOO
LIFRQGHPQDWLRQVXFFHHGV
6HFRQG WKH IDFW WKDW XUEDQ EOLJKW LV WKH SULPDU\ MXVWLÀFDWLRQ RI
FRQGHPQDWLRQPHDQVWKDWHPLQHQWGRPDLQSRZHUVRIWHQKDUPWKHSRRUDQG
PLQRULWLHV ZKR OLYH LQ VXFK DUHDV 5HGHYHORSPHQW SODQV XVXDOO\ IRUHVHH
WKHUHSODFHPHQWRIORZHUSULFHGKRXVLQJZLWKODUJHVFDOHVKRSSLQJPDOOV
ÀYHVWDUKRWHOVRUELJER[UHWDLOVWRUHV
7KLUG WKH IDFW WKDW PRVW UHGHYHORSPHQW LV FDUULHG RXW E\ SULYDWH
HQWLWLHVZKRUHFHLYHWKHSURSHUW\ULJKWVDIWHUFRQGHPQDWLRQPHDQVWKDWUHQW
VHHNLQJ LV HQFRXUDJHG 'HYHORSHUV KDYH VWURQJ UHDVRQ WR GHYHORS FORVH
UHODWLRQVKLSVZLWKFLW\FRXQFLOVSUHVVIRUDUHGHYHORSPHQWSODQWKDWZLOO
DOORZWKHPWRUHFHLYHSURSHUW\DWDEHORZPDUNHWSULFHDQGSURÀWIURPWKH
GHYHORSPHQW
7KHVH LPSDFWV DUH QRW WULYLDO %HWZHHQ DQG WKHUH ZHUH
RYHU FDVHV ZKHUH HPLQHQW GRPDLQ SRZHUV ZHUH WKUHDWHQHG RU
XVHGIRUSULYDWHGHYHORSPHQWS,Q&DOLIRUQLDDERXWSHUFHQWRI
PXQLFLSDOLWLHVKDYHDUHGHYHORSPHQWDJHQF\S
$OO LQ DOO LW DSSHDUV WKDW WKH PDUNHW IDLOXUH DUJXPHQWV WKDW MXVWLÀHG
FRQGHPQDWLRQXQGHUWKHSRZHURIHPLQHQWGRPDLQLJQRUHGWKHRWKHUVLGH
RIWKHFRLQWKHSRVVLELOLW\RIJRYHUQPHQWIDLOXUHLQXVLQJWKDWSRZHU
5HJXODWRU\WDNLQJVIDFHDQHYHQPRUHVLJQLÀFDQWSUREOHPWKDQHPLQHQW
GRPDLQWDNLQJV:KHQWKHXVHRISURSHUW\LVUHJXODWHGLQDZD\WKDWUHGXFHV
LWV YDOXH QR FRPSHQVDWLRQ QHHG EH SDLG DV ORQJ DV WKH SURSHUW\ RZQHU
UHWDLQVDQ\YDOXHRIWKHSURSHUW\7KLVFRXUWUXOLQJJLYHVPDVVLYHSRZHUVWR
JRYHUQPHQWDJHQFLHVWRUHVWULFWWKHXVHRISURSHUW\RIWHQIDUEH\RQGZKDW
LVQHFHVVDU\WRSURWHFWWKHSXEOLFIURPKDUPRUWRSURYLGHDSXEOLFJRRG
-RQDWKDQ$GOHUWKHDXWKRURIWKHFKDSWHURQHQYLURQPHQWDOUHJXODWRU\
WDNLQJV DUJXHV WKDW DJHQFLHV WKDW UHVWULFW SURSHUW\ ULJKWV IRU HFRORJLFDO
UHDVRQVVKRXOGSD\IRUWKHUHGXFWLRQLQYDOXHWRWKHSURSHUW\RZQHURXW
RI WKHLU DJHQF\ EXGJHW 6XFK SD\PHQW ZRXOG LQ HIIHFW IRUFH WD[SD\HUV
WR FRPSHQVDWH ODQGRZQHUV IRU WKH SURYLVLRQ RI HQYLURQPHQWDO DPHQLWLHV
VXFK DV HQGDQJHUHG VSHFLHV KDELWDW DQG ZHWODQGV &RPSHQVDWLRQ FDQ EH
MXVWLÀHGRQERWKHTXLW\DQGHIÀFLHQF\JURXQGV,WRQO\VHHPVIDLUWKDWLI
WKHJHQHUDOSXEOLFZDQWVFHUWDLQDPHQLWLHVSURYLGHGWKDWWKH\UDWKHUWKDQ
WKHODQGRZQHUVKRXOGSD\IRUVXFKSURYLVLRQ$QGDJHQFLHVZRXOGKDYH
DQLQFHQWLYHWRORRNIRUWKHORZHVWFRVWZD\VRISURYLGLQJVSHFLHVKDELWDW
103
RURWKHUHQYLURQPHQWDOJRRGVLIWKH\SDLGDSULFHIRUWKHP
,QFRQFOXVLRQLIRQHZDQWVDVWURQJFDVHIRUVFDOLQJEDFNWKHSRZHUV
RIHPLQHQWGRPDLQDQGUHJXODWLRQRISURSHUW\ULJKWVWKLVYROXPHLVDJRRG
SODFH WR VWDUW ,Q D IHZ FDVHV WKH DUJXPHQWV VKDGH LQWR UHPRYLQJ VXFK
SRZHUVHQWLUHO\IURPJRYHUQPHQWEXWPRVWRIWKHDXWKRUVVHHDSXUSRVHLQ
HQDEOLQJJRYHUQPHQWWRXVHLWVSRZHURYHUSURSHUW\ULJKWVLQFHUWDLQZD\V
%XWWKH\EHOLHYHWKRVHSRZHUVKDYHJURZQIDUEH\RQGZKDWLVMXVWLÀDEOH
7KHRQHSUREOHPZLWKWKHERRNLVWKDWWKHUHLVQRWDFRKHUHQWVHWRISROLF\
FKDQJHVWKDWDUHREYLRXVEXWWKLVODFNRIDJUHHPHQWLVWREHH[SHFWHGIURP
DYROXPHZLWKPXOWLSOHDXWKRUV
&KULVWLDQHFRQRPLVWVZLOOÀQGProperty Rights: Eminent Doman and
Regulatory Takings Re-ExaminedKHOSIXOLQXQGHUVWDQGLQJWKHDSSURSULDWH
UROHRIJRYHUQPHQWIURPERWKDQHTXLW\DQGHIÀFLHQF\SHUVSHFWLYH-XVWLFH
RUHTXLW\LVVXHVDERXQGLQWKHGLVFXVVLRQRIHPLQHQWGRPDLQDQGUHJXODWRU\
WDNLQJV (IÀFLHQF\ IRFXVHV RQ PRYLQJ UHVRXUFHV WR WKHLU KLJKHVW YDOXHG
XVH7KHSRZHURIJRYHUQPHQWRYHUSULYDWHSURSHUW\ULJKWVLQDZRUOGRI
SRVLWLYHWUDQVDFWLRQFRVWVKDVWKHSRWHQWLDOWRDLGLQWKHHIIHFWLYHDOORFDWLRQ
RIUHVRXUFHV+RZH[WHQVLYHWKDWSRZHUVKRXOGEHLVZHOOWUHDWHGLQWKLV
YROXPHQ