Is Post-Kelo Eminent Domain Reform Bad for the Poor?

Introduction In a recent essay in the Northwestern University Law Review,1 Professor David Dana argues that most post-Kelo reform efforts are seriously flawed because they tend to forbid the condemnation of the property of the wealthy and the middle class for "economic development," but allow the condemnation of land on which poor people live under the guise of alleviating "blight. " This, he claims, results in reform laws that "privilege[] the stability of middle-class households relative to the stability of poor households" and "express[] the view that the interests and needs of poor households are relatively unimportant. "2 I agree with Professor Dana that the problem of blight condemnations and its impact on the poor deserves much greater attention, and that postKelo reform initiatives should do more to address these concerns. However, I disagree with his argument that post-Kelo reform efforts have systematically treated land where the poor tend to live worse than that of middle and upper class homeowners. As of this time (April 2007), most of the states that have enacted post-Kelo reform laws have either banned both blight and economic development takings (five states, plus Utah, which enacted its reform law prior to Kelo), or defined "blight" so broadly that virtually any property can be declared "blighted" and taken (sixteen states). Several other states have enacted reforms that provide no real protection to any property owners because of other types of shortcomings. Only nine are actually guilty of the sin condemned by Professor Dana: allowing only the condemnation of "blighted" areas narrowly defined. To the extent that some states have indeed banned "economic development" condemnations in affluent neighborhoods while permitting blight condemnations to go on in poor ones, I agree that this is a lamentable state of affairs. However, it may still be a better result than simply subjecting all property to the risk of economic development takings. A law that protects the property rights of most but not all of the population is preferable to one that protects no one. Such a law might also benefit many poor people who live in non-blighted areas and are potentially vulnerable to economic development takings. Survey data suggests that the poor themselves overwhelmingly oppose economic development condemnations. Furthermore, the exclusion of blighted property from bans on "economic development" condemnations in some states is not necessarily explained by indifference to or contempt for the interests of the poor. There are perfectly non-invidious (though in my view flawed) reasons for believing that condemnation is sometimes necessary to eliminate blight. There are few or no good reasons, however, to use condemnation to promote economic development through the transfer of property to private owners. I. POST-KELO REFORM AND THE POOR Since Kelo v. City of New London3 was decided in June 2005, twenty-eight states have enacted eminent domain reforms through the regular legislative process and ten (including several that also enacted legislative reforms) by referendum. Altogether, thirty-five states have enacted reforms that purport to ban or restrict "economic development" takings. The state of Utah banned both economic development takings and blight condemnations in early 2005, before Kelo was decided.4 Seventeen of the twentyeight reforms enacted by state legislatures are largely ineffective, providing little or no real protection to property owners against economic development takings.5 This is also true of several of the reforms enacted by referendum. With respect to these states, Professor Dana's claim that middle class households are getting better protection than the poor are is incorrect because, quite simply, neither group is getting any real protection at all. In at least sixteen states, post-Kelo reforms have been ineffective because they contain "blight" exceptions so broad that virtually any property can be defined as "blighted"-including property in middle class or even wealthy neighborhoods. …