Friday, May 8, 2009

Breaking Neighborhoods For Fun And Profit

(Warning: this post is long.) The masters of the official economy are threatened by self-sufficient, resilient neighborhoods and communities, as these communities don't make a good “growth market” for the products produced by the official economy. People who own their own land and homes outright, who don't have to pay a mortgage, who grow their own food, who provide for their own needs, who live frugally – such people threaten the profit motive of the big growth capitalists. These growth capitalists cannot easily take advantage of people as long as people are self-reliant.

In order therefore to insure “growth,” corporatists must break self-sufficient, resilient neighborhoods and communities. It is only when such social units are broken and the means of self-reliance are taken away that corporatists can make a prey out of the people who comprise such neighborhoods and communities. It is only when fully-paid houses and profitable locally-owned business are wiped out that large developers and big-box stores can continue their expansion. By breaking perfectly good things these corporatists can sell more newly-manufactured things to replace the things that were broken, and they sell the new things at greatly inflated prices.

One of the tools of this breakage is the abuse of eminent domain. “Eminent domain” is defined in Wikipedia as “...the inherent power of the state to seize a citizen's private property, expropriate property, or seize a citizen's rights in property with due monetary compensation, but without the owner's consent.” This power has always existed in the United States, being part of the common law inherited from England. However, the U.S. Constitution's Fifth Amendment restricts the Federal government's taking of land to that which is taken for expressly public use.

While the Federal government has always been limited in the purposes for which it could seize or restrict land use, the states were under no such limitation until the ratification of the Fourteenth Amendment. In 1896, the Supreme Court held that the eminent domain provisions of the Fifth Amendment were incorporated into the Due Process Clause of the Fourteenth Amendment, and were now binding on the states. That meant that the states were prohibited from seizing anyone's property unless that seizure was for a clearly public use, such as a public road or dock or harbor.

That is the concept of eminent domain that most Americans have in their minds today, and it was taught to us from grade-school civics classes and onward. Yet most Americans don't know that this definition is seriously out of date, and has been since before many of us were born. As early as 1954, as cities across the nation struggled to “reduce blight” within their environs, the Supreme Court ruled that the District of Columbia could seize “blighted” properties within designated “slum” areas and transfer these properties to private developers for the purpose of “urban renewal.” This set a precedent for other cities, which engaged in wholesale condemnation and seizure of properties within areas of designated urban blight. These areas were inhabited disproportionately by poor and minority residents, who were displaced and severely disrupted by the seizure of their homes, and who were unable to afford the new dwellings and amenities constructed in these zones as part of “urban renewal.”

This Supreme Court decision allowed cities to redefine taking private property for public use as “taking private property for the public good.” This became the justification for cities seizing homes and other real estate and transferring these properties to other private parties because of some perceived “public benefit” arising from the transfer. This decision kicked off a wave of such seizures, most of which occurred in poor, minority communities targeted for “gentrification” and “urban renewal” by city planners. Homes were seized and razed to make way for expensive condos and upscale shops, among other things. In the state of Kansas, 150 homes were condemned to make way for a racetrack. In Michigan in 1981, the state Supreme Court allowed the demolition of over 1000 homes and 600 businesses in the city of Poletown to make room for a new General Motors plant, in order to serve the “public purpose” of providing jobs and economic growth. The property rights group Institute for Justice found 10,000 cases from 1998 to 2002 of local governments in 41 states using or threatening to use eminent domain to transfer homes and properties from one private owner to another.

One key thing that happened from 1954 onward was that as poor and minority neighborhoods were broken up and redeveloped, cities and powerful business franchises began to seize ever more mainstream houses and neighborhoods – including homes that were increasingly owned by non-minority, educated middle class residents. Many of these people had the financial means to fight the seizure of their property or the declaration of their property or neighborhoods as “blighted.” And fight they did. One notable fight (which unfortunately was lost) was Kelo versus City Of New London, a case between a group of neighborhood residents (including resident Suzanne Kelo, after whom the case was named) and the City of New London, Connecticut, which used eminent domain to seize the homes of these residents in order to transfer the underlying land to a developer for a dollar a year. The Connecticut Supreme Court ruled that if an economic project creates new jobs, increases tax and other city revenues, and revitalizes a “depressed” (even if not blighted) urban area, then it qualifies as a public use. When the Kelo neighborhood residents appealed to the U.S. Supreme Court, it ruled 5-4 against them. (Interestingly, this decision was supported by all four of the justices appointed by President Clinton, who supposedly “felt our pain” and was supposed to be for the little guy.)

The Kelo ruling caused quite a backlash and outcry in the U.S., and several states passed laws or ratified changes in their constitution to forbid the use of eminent domain to transfer property from one private party to another. However, eminent domain abuse is still alive and is doing quite well even today. A particular case that comes to mind is the City of Fullerton, California.

In the early part of this decade, the neighborhoods near the Fullerton train station were mainly comprised of small older homes typically inhabited by renters. Most of the residents were Hispanic and working-class. But around 2003, that area was targeted for redevelopment as part of the City Council's plan to turn the downtown area into an entertainment/upscale living magnet. Most of the old homes were torn down and replaced by very expensive “townhomes” and loft condo's. Many of the older downtown antique and specialty businesses were replaced by bars and nightclubs. (In fact, I believe the City managed to cram over 40 bars into the space of a few city blocks! Talk about taking a hit to the Solari index!)

I saw the transition as it took place, because there was a time when I had to catch the Metrolink train in Fullerton to get to work. I read of the toll the transition was taking on the non-alcohol-serving downtown businesses and nearby neighborhoods who had to endure the antics of drunken visitors on weekends. I saw increasing numbers of homeless people “from every kindred, tongue and tribe” hanging out at the Starbucks on Harbor Boulevard in hopes of receiving some help from charitable passers-by. I must admit with shame that at the time, I never connected the dots between Fullerton's “redevelopment” and some of the things I was seeing, nor did I question how the City had managed to get hold of the redeveloped land.

Now it seems that this bit of redevelopment was not enough for the City. According to the Fullerton Observer, the City Council was scheduled to vote on the 5th of May on whether to expand the City's redevelopment area by 1,165 acres, thus placing nearly 25 percent of the entire city under its redevelopment agency and its expanded powers to use eminent domain, divert property taxes and subsidize development. (I wonder how the vote went.) Included in this area are properties which do not meet strict definitions of “blight,” as well as several well-known and highly successful niche small businesses like Bob Marriott's Fly Fishing Store. (I almost stopped in there several times when I was living in So. Cal.) By the way, it seems that the City's redevelopment agency is now coming up with some creative definitions of “blight.”

Eminent domain and the threat of redevelopment are used to displace people whose homes are paid for, whose homes are older and thus not subject to high property taxes, and who are in some cases accused of “overcrowding,” as stated by Fullerton Mayor Don Bankhead. Eminent domain and the threat of redevelopment are some of the methods of choice for cities which seek to grow their tax revenues. It is not surprising that the incidence of eminent domain abuse rose with the recent real estate and construction bubbles in the American economy.

But the abuse of eminent domain is a direct threat to the building of households, neighborhoods and communities that are resilient in the face of the social shocks now arising from Peak Oil, climate change and economic collapse. For the building of such resilience and of alternative safety nets depends on having a stable and guaranteed place to live. The threat of foreclosure and the worry of indebtedness are already enough of a destabilizing force without the threat of some municipality taking property from its citizens in order to increase its tax revenues or satisfy some big business. The problem of eminent domain abuse must therefore be forcefully addressed by residents of neighborhoods and communities that seek to become resilient. Otherwise, why create a permaculture garden in your backyard or form a neighborhood barter network if you and your neighbors are at constant risk of being thrown out of your homes? Why take in displaced relatives if doing so will expose your home to seizure on account of “overcrowding”?

One last note: Some members of the “libertarian” camp have jumped on the “Down With Eminent Domain!” bandwagon. But they have a devious agenda: they seek to define “eminent domain abuse” as the placing of any restriction on land use by any government agency. According to this definition, restrictions on land use arising from environmental protection concerns would be classed as “eminent domain abuse.” I thoroughly disagree with such a definition. In my opinion, it is bogus and childish. I firmly believe that to the extent that people legitimately own property at all, they must realize that they “own” it only as a trust and stewardship, and that their use of their land affects others even when those others don't live on the same land. Therefore I thought Oregon's Measure 37 was a huge mistake, as it allowed a bunch of greedy landowners and developers an opportunity to try to turn Oregon into another Southern California – strip malls, freeways and housing tracts from one end to the other. I was glad when Measure 49 passed. (In fact, I voted for it.) I also support environmentally responsible restrictions on land use.


1 comment:

Kiashu said...

Nasty stuff. I guess some councillors think they're not dealing with actual human beings and communities but playing a game of SimCity.

Either that, or they're just corrupt. Maybe someone should be investigating the money trail from the councillors voting to bulldoze neighbourhoods to the companies profiting from it.