Thursday, August 18, 2005

The Kelo Strip

In a small strip of land near the Atlantic coast, Local Liberty reports that the city of New London wants to charge back rent to the Kelo litigants.
The U.S. Supreme Court recently found that the city's original seizure of private property was constitutional under the principal of eminent domain, and now New London is claiming that the affected homeowners were living on city land for the duration of the lawsuit and owe back rent. It's a new definition of chutzpah: Confiscate land and charge back rent for the years the owners fought confiscation.

In some cases, their debt could amount to hundreds of thousands of dollars. Moreover, the homeowners are being offered buyouts based on the market rate as it was in 2000.

However, I think the outrage is not what what is happening now but what happened in 2000. The injustice is that the City seized the land in 2000. The law, however wrongly determined, is that the City paid for the land in 2000 and has owned it since then and can charge the occupants for rent. The last appeal must go to the court of public opinion. The City may want to settle to avoid bad PR. But the litigants claim that rents were not part of the 2000 agreement.
A lawyer for the residents, Scott Bullock, responded to the letter on July 8, 2004, asserting that the NLDC had agreed to forgo rents as part of a pretrial agreement in which the residents in turn agreed to a hastened trial schedule. Bullock called the NLDC's effort at obtaining back rent "a new low."

"It seems like it is simply a desperate attempt by a nearly broke organization to try to come up with more funds to perpetuate its own existence," Bullock wrote. He vowed to respond to any lawsuit with another.

I had originally noted when the ruling came out that the taking was for government self preservation not for public benefit. However, I doubt that the City had planned on profiting from collecting rents during a long court fight. They had planned to hand the land to developers and start collecting taxes from them as soon as possible.

Also, the City is now doing for housing exactly what Social Security reform opponents insist on doing for retirement. When the City seized the property in 2000 they bore the full risk of owning "blighted" property. House prices are risky while fixed rents are risk free. The government is taking their property and giving them a "guaranteed risk free housing benefit" just as reform opponents insist that the government take 1/6 of your income so it can give you a "guaranteed risk free retirement benefit".

Meanwhile, in a larger strip of land on the Mediterranean, the government is seizing land, with compensation, in order to transfer the land to another government. The hold-outs there could lose a third of their compensation. I don't know if disengagement will make things better or worse, but there has been little progress under the status quo peace process. Whatever happens there, the sooner it begin the sooner it will be finished. We need to watch and learn what happens when extremists are in charge of their own land.

And on our large strip of land on the Pacific, Local Liberty reports that a Democrat State Senator has proposed a two-year ban on style seizures.


Anonymous Kira Zalan said...

Additionally, the owners are being offered property values from the year 2000, which are much lower than property worth today.

8/18/2005 10:17 AM  

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