Frug asserts that Dillon’s decision was a forerunner of the Progressive Movement in that “a critical impediment to the development of a government dedicated to the public goods was the intermingling of public and private sectors”. His decision, in some measure, was an adverse reaction to the recent federal involvement in transcontinental railroad infrastructure—resulting, of course in Credit Mobile which was ongoing at the time of his decision and his writing of his classic work. “By merging public and private spheres, cities had extravagantly invested in private businesses performing functions ‘better left to private enterprise’”[1]. If Frug is correct, Dillon’s Law is an element of latter phases in “gifts clauses” which made more difficult to establish public/private EDOs and which separated private parties from use of public powers, such as eminent domain. The State and state courts were intended to be checks to both private control of government powers, and government abuse of private property.
The State … at its pleasure may modify or withdraw all [city] powers, may take without compensation [city] property … expand or contract the territorial area, unite the whole or a part of it with another municipality, repeal the charter and destroy the [municipal] corporation. All this may be done … with or without the consent of its citizens, or even against their protest …. the State is supreme, and its legislative body, conforming its action to the state constitution, may do as it will, unrestrained by any provision of the Constitution of the United States.[2]
Eminent Domain for Urban Redevelopment
Because the term was so poorly defined, blight became a useful rhetorical device–a means by which real estate interests could reorganize property ownership by separating ‘productive’ and ‘unproductive’ land uses. The development of the discourse of blight provided real estate interests with a means to rationalize urban land use ownership.[3]
The NAREB during the 1930’s and ’40’s promoted a variety of programs to privately redevelop urban neighborhoods. The NAREB was aided in this effort by its research wing, the ULI, described by its director, Hugh Potter, as ‘the city planning department of the Realtors of this country’. Together, the NAREB and ULI used the language of planning to persuade the public to support the use of eminent domain for private redevelopment.[4]
The Great Depression especially provided the inspiration for a “reconceptualization of the Public Use Clause. In particular, there was a need to have housing and slum removal legally accepted as a public use by the state courts. This was not necessarily going to be easy thing to do. A raft of state courts very quickly rejected housing as a public use under eminent domain and the Federal Sixth Circuit Court affirmed state court decisions in that, predictably, the issue was not “within the scope of the powers of the federal government”. The (New Deal) Housing Act of 1937, however, rectified the problem by requiring as a recipient of federal housing redevelopment funds a local housing redevelopment agency.
In light of the 1937 federal Housing Act state legislatures approved supportive legislation and courts affirmed its constitutionality. New York courts led the way in reinterpreting the Public Use Clause and supported the condemnation of properties by the New York City Housing Authority[5].
The court relied heavily on the argument that slum clearance was an integral part of public housing production and declared that ‘slum areas are the breeding places of disease which take toll not only on its denizens, but by spread, from the inhabitants of the entire city and state. The elimination of these areas through the construction of public housing, the court ruled, constituted a valid public purpose.[6]
Massachusetts and other states soon followed by emulating in their own manner, the New York State decision. The next step, which would play out during the war and post-war years, was to start a campaign to expand the narrow courts’ decision from just housing (in slums) to the removal of blight and urban renewal. To this end, the development of the comprehensive master plan by planners during the thirties provided the justification or rationale.
As state legislatures across the nation in the post-World War II period approved redevelopment acts which included this expanded notion of urban renewal throughout the forties and early fifties[7], and municipalities responded by creating and initiating urban renewal programs, the courts inevitably were called upon to review various aspects of the urban renewal project–most importantly for us, the validity of the urban renewal as a legitimate public use/purpose in an eminent domain taking. In these post-war years, Pritchett cited seventeen state courts that had reviewed and decided on various urban renewal-related eminent domain cases. All but three upheld the rights of local authorities to condemn land and turn it over to private parties for renewal purposes.[8]
The success of renewal initiatives in state courts depended on a coordinated effort of real estate interests and housing reformers. The NAREB, the National Association of Housing Officials, the National Conference of Mayors and other pro-redevelopment groups provided assistance to state and local authorities, helped to draft briefs, and submitted their own amicus curiae briefs to the courts. Courts relied heavily on these briefs in writing their opinions, and many of them directly appropriated the language of blight.[9]
Accordingly, a coalition of Privatist and progressive actors re-forged, re-defined, and re-justified eminent domain to render it suitable for use in urban renewal programs. To be sure, the usual process was for the state to pass a redevelopment law, see it contested in court, and if the court review and decision were favorable urban renewal went forward. In those instances where the court’s decision was unfavorable, the redevelopment law was modified or (usually in cases where the state constitution itself made reference relevant to eminent domain) a popular referendum (in Georgia) was approved and the state constitution amended. Eventually, to our best determination, nearly every state approved and legally sanctioned some form of urban renewal–certainly by the 1960’s.
The federal Supreme Court eventually in its 1954 Berman v. Parker decision upheld the state legislation and state court decisions that affirmed public taking (in regards to a Washington D.C. taking) of private property and its transference to a private developer as part of the urban renewal process. The Supreme Court decision stated in part:
It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled …. Once the object is within the authority of Congress [the legislature of Washington D.C.], the right to realize it through the exercise of eminent domain is merely a means to an end.[10]
Yikes, and specters of Kilo should come to the reader’s eyes–but more on that later. This is not the end of our eminent domain story. But this is as far as we need take it at this point in our history of economic development. The reader can expect to see eminent domain discussed yet further in subsequent chapters.
The lessons to this point are hopefully, clear. A patchwork coalition of Privatist and progressive actors throughout the 1940’s and 50’s incorporated eminent domain into their vision of an urban renewal program which was designed to address the urban crisis. Urban renewal varied from city to city, state to state[11], but it did include a core “rationale”, “approach”, or “philosophy” around which a court could legitimize its decision to allow a public taking on behalf of a private action. There were important and loud critics of these decisions, even in this time period, but they could not overcome the force or the logic of the urban renewal coalition. As we shall see soon enough, however, the double-edged sword which is eminent domain will return to haunt the urban renewal proponents in the not-too-distant future.
The issue for an economic developer is that real estate-based projects must control the designated site before projects can move forward. Projects, ranging from affordable and public housing, slum removal, waterfront redevelopment or whatever ultimate purpose must first acquire legal control before much of any substance can be attempted. Financing, for instance, is impossible without site control and ownership determined. If the seller won’t sell then the project dies. And an economic developer is paid to move the project forward—that is what he or she does. The pitfalls inhibiting site control, especially for a private developer, involve holdouts, absentee owners and unwilling sellers who can raise the price of land acquisition to obscenely high, deal-breaking levels. Today sites can be actual or potential brownfields, and the owner wants no part in waking a sleeping tiger. Without site-control and land assembly powers, development and redevelopment in the public arena will become little more than an academic exercise. Cities and neighborhoods will eventually age and die. Cities and neighborhoods, like forests, need to be periodically regenerated—and that is what we do in economic development.
The late 1920’s brought a convergence of forces that supported the urban renewal movement, and several groups that were formerly antagonists in the battle for city revitalization began to cooperate. Real estate interest, housing reformers and big-city politicians all hoped to reap benefits through urban renewal, and they formed a tenuous coalition to promote redevelopment. Their goals were widely divergent. Housing reformers wanted government support to eliminate decrepit housing and replace it with modern, affordable dwellings, Politicians hoped to increase their cities’ tax bases and provide jobs …to their constituents. Real estate interests sought to gain access to large parcels of downtown property for profitable redevelopment. The planning profession provided a common language that joined real estate interests, housing reformers and local government[12].
[1] Gerald E. Frug, City-Making, op. cit., pp. 46-47.
[2] Hunter v. City of Pittsburgh, 207 U.S. 161, 178-179 (1907).
[3] Pritchett, op. cit. p. 18.
[4] Pritchett, op. cit. p. 19
[5] Pritchett. Op. cit. pp. 24-25
[6] Pritchett, op. cit. p. 25.
[7] New York was the allegedly the first (1941-Desmond-Mitchell Urban Redevelopment Corporation Law), Illinois next and by 1948 twenty-five states had passed such legislation.–Pritchett, op. cit. p. 32. Pritchett in the following pages describes the essential features of several of these laws and their differences. Despite the ULI “model law” approach, each state was approaching urban redevelopment through its own perspective and balance of political and social inputs.
[8] Pritchett, op. cit. p. 38.
[9] Pritchett, op. cit. p. 38.
[10] Urban Blight: An Analysis of State Blight Statutes and their Implications for Eminent Domain Reform, by Robinson and Cole for the National Association of Realtors, October 2007. p. 5.
[11] The reader is urged to review a publication, Urban Blight: An Analysis of State Blight Statutes and their Implications for Eminent Domain Reform, by Robinson and Cole for the National Association of Realtors, October 2007. This publication outlines in nearly fifty pages the various distinctions and variations included in the fifty state laws governing eminent domain and blight. In addition, it does provide a short history of the period we have just discussed and which confirms the basic outlines of our position.
[12] Pritchett, op. cit. p. 14.
Ron W. Coan 