Friday, October 05, 2007

Jane Jacobs on Kelo; her attorney on post-Kelo legislation

Would the late Jane Jacobs have opposed the use of eminent domain for the Atlantic Yards project? (A crucial appeals court argument in the case will be heard Tuesday.) We can't be certain, but it's likely, given evidence she was deeply skeptical of eminent domain. And, as I've written, I think she'd find reasons to oppose AY.

Indeed, she filed a brief in the 2005 Kelo v. New London lawsuit, on behalf of the plaintiffs, who lost. (More from NoLandGrab's Lumi Rolley.) One of several amicus briefs in the case, it was authored by Ilya Somin, a professor at George Mason University School of Law with a strong libertarian bent. (Jacobs, essentially a pragmatist, had libertarian leanings.)

The Kelo case involved eminent domain for economic development, while the justification for Atlantic Yards case involves not only increased tax revenue but the removal of blight, establishment of a sports arena, improved transit facilities, and affordable housing. (The value of such public purposes, as compared to the private gain for developer Forest City Ratner, is at issue in the pending eminent domain case.)

Then again, the court in Kelo said:
There is, moreover, no principled way of distinguishing economic development from the other public purposes that we have recognized.

Warnings from Jacobs

The brief states:
Throughout her career, Ms. Jacobs has emphasized that the use of eminent domain for the ostensible purposes of “urban renewal” and “economic development” usually serves to benefit powerful private interests at the expense of the poor and working class communities it is supposedly intended to help.

Far from furthering their supposed goal of promoting economic growth, development condemnations often inflict economic and social harms that far outweigh any possible benefits. Moreover, the use of eminent domain is not necessary to promote legitimate development projects because private developers have a variety of tools available to overcome the ‘holdout’ problems that might otherwise prevent projects from going forward.

Even condemnations justified by the need to eliminate urban “blight” have caused extensive social harm, displacing hundreds of thousands of people.

The amount of displacement in Brooklyn, as compared with cases during the heyday of urban renewal, would be much less. But some of the same political factors persist. The brief states:
Contrary to the Connecticut court, the political process often cannot be depended on to give due consideration to the “social costs” of economic development takings because such condemnations generally benefit the politically powerful, while the costs fall on the poor and politically disadvantaged.

It's not clear that the costs of Atlantic Yards would overwhelmingly fall on the poor, though there is significant risk from secondary displacement, accelerating the general trend.

But given the potential concentrated benefits and more diffuse costs, it's clear that the political process behind Atlantic Yards, where the key decisions were made by the unelected Empire State Development Corporation, favor the developer. (Would it have been different had there been a heavyweight corporation on the other side, as with Cablevision in the fight over the West Side Stadium?)

Loss of community

The brief states:
While “fair market value” compensation may compensate homeowners for a part of the financial loss they suffer, it does not even begin to compensate them for the destruction of community ties, disruption of plans, and psychological harms they suffer.

Again, this is not as big an issue with Atlantic Yards, though there are tenants and businesses for whom it would be a hardship to leave and start anew, whatever the financial compensation. The larger issue with Atlantic Yards, as historic preservationist Shirley Morillo argued, is the “sense of place” at stake.

Dealing with holdouts

The Jacobs brief suggests that eminent domain is not necessary, because there are a variety of tools to deal with holdouts; developers could negotiate in secret or use specialized agents to alert potential holdouts, or establish a “precommitment strategy” promising to pay the same price for all.

That makes sense for economic holdouts, thus preventing someone from resisting negotiations in search of higher returns. That, however, does not solve the question of the ideological holdout, the person--and there is at least one, in the Atlantic Yards case--who simply thinks the project is wrong.

Economic projections

Remember, Atlantic Yards has been portrayed by the developer as an "economic engine" for Brooklyn. The brief warns:
In the absence of any binding obligations to actually deliver on the promised economic benefits, nothing prevents municipalities and private interests from using inflated estimates of economic benefit to justify condemnation and then failing to provide any such benefits once courts approve the taking and the property is transferred to its new owners.

Both corporate interests and political leaders dependent on their support have tremendous incentives to overestimate the economic benefits of projects furthered by condemnation. Courts are in a poor position to second-guess plausible-looking financial and job estimates provided by officials. Even if the governments and corporations involved do not engage in deliberate deception, there is a natural tendency to overstate the public benefits and likelihood of success of projects that advance one’s own private interests.

The Empire State Development Corporation notably projected benefits in the Atlantic Yards case but did not try to assess costs, as other analysts, including the New York City Independent Budget Office and even the developer's own consultant, sports economist Andrew Zimbalist, did to some extent.

Looking at precedents

As I noted regarding the cases that served as precedent to the court's decision upholding Kelo, they arose in dramatically different cases--a Hawaii case of land oligopoly, known as Midkiff, and a Washington, DC case involving pervasive blight, known as Berman. Somin's brief on behalf of Jacobs states:
Furthermore, Midkiff’s deferential approach should not be unthinkingly applied to cases arising in vastly different contexts…

As for Berman, he writes:
Such conditions are a far cry from the use of eminent domain in order to promote potential development in nonblighted areas... Berman... limited itself to considering the use of eminent domain to revitalize areas that are characterized by persistent “slum” conditions, “as though possessed of a congenital disease."

The Kelo decision did not try to make such distinctions.

Recommendations

The brief recommended two requirements the Kelo court rejected, considering them too difficult and unwieldy:
First, the Courts should require lower courts weigh the social and economic costs of economic development condemnations and disallow condemnations that have costs that exceed their benefits.

Second, it is essential that the new private owners of condemned property be legally required to actually provide the economic benefits to the community that allegedly justified the condemnation…

The court's 5-4 majority decision in Kelo said no:
Orderly implementation of a comprehensive redevelopment plan obviously requires that the legal rights of all interested parties be established before new construction can be commenced. A constitutional rule that required postponement of the judicial approval of every condemnation until the likelihood of success of the plan had been assured would unquestionably impose a significant impediment to the successful consummation of many such plans.

Indeed, the Jacobs brief acknowledges that it would be tough for courts "to assess plausible-sounding claims of economic benefit" and impossible to analyze nonfinancial burdens on condemnees. Also, Jacobs argued via Somin, even if benefits do outweigh costs, that doesn't mean that a better development might have arisen through more organic or noncoercive means.

The latter is of course one of the arguments regarding Atlantic Yards. Surely a simple rezoning could've stimulated new development to eliminate the alleged blight. Whether that would have resulted in an arena, which requires demapping of streets and other direct governmental intervention, is another question.

Post-Kelo legislation

Somin offers a follow-up in an article in the August/September issue of the libertarian magazine Reason, headlined The Limits of Anti-Kelo Legislation, subtitled "Reformers are trying to outlaw eminent domain abuse. But will the laws they're passing be effective?"

Somin notes:
Although the traditional definition of public use had already been vastly expanded by previous decisions, Kelo drove the change home to the general public.


While the political backlash was expected to lead to reforms, Somin calls the changes ineffective and too often "cosmetic." Strict "economic development" takings have been banned in several states, but often continue in another guise:
The most common tactic, used in some 16 states' post-Kelo laws, is to allow economic development condemnations to continue under the guise of alleviating "blight." While it may sometimes be desirable to use eminent domain to transform severely dilapidated areas, many states define "blight" so broadly that almost any neighborhood qualifies. A 2003 Nevada Supreme Court decision concluded that downtown Las Vegas was blighted, thus allowing the authorities to condemn some property that local casinos coveted for a new parking lot. A 2001 New York appellate decision held that Times Square was blighted, paving the way for the condemnation of property to build a new headquarters for The New York Times.

New York, as we know, has not passed any eminent domain reforms, and the definition of blight, as deployed in the Atlantic Yards case and others, is expansive.

Somin points out that "otherwise effective reforms" in Pennsylvania exempt Philadelphia and Pittsburgh and in Minnesota exempt the Twin Cities area, both for five years. There have been no effective federal reforms, he says, given that a presidential order and the Bond Amendment exempt blight and "can be easily circumvented simply by claiming the project in question benefits the general public."

Somin suggests public ignorance is to blame:
It takes specialized knowledge to distinguish an effective "anti-Kelo" bill from one that is mostly for show. Most voters lack both the ability and the incentive to scrutinize such details closely...
Developers and other interest groups, by contrast, have much greater incentive to inform themselves about the details of pending legislation. Thus, politicians can appease voters angry about Kelo by passing laws to "reverse" it, while simultaneously avoiding the ire of development interests by not giving those laws teeth.


He suggests that referenda have been more effective than legislation "because they usually are drafted by activists instead of politicians" who need not "pass[...] off cosmetic legislation as meaningful reform."

The publicity about Kelo raised awareness, even though the case, as legal analysts know, didn't break new ground. Somin writes:
Even if they had been aware of Berman and Midkiff, voters might not have realized that those earlier decisions gave the government a blank check to condemn virtually any property for virtually any reason.

As for the future, Somin suggests that referenda are no panacea, given that 26 states do not permit lawmaking by referendum and "pro-condemnation forces," like the California League of Cities, can use the process as well.

Changes in New Jersey

Apparently because of his deadline, he didn't mention significant changes in New Jersey, such as the decision last June, known as Gallenthin, limiting the definition of blight, which was cited a month later in overturning a project in Newark.

Separately, Somin has praised the decision, stating, "Hopefully, Gallenthin and [Ohio case] Norwood will help kick off a new trend of judicial skepticism towards expansive definitions of 'blight.'"

In New York, Atlantic Yards watchers await a decision challenging the project environmental review; the decision was expected in September, but it's a complicated case.

2 comments:

  1. While no one can speak for Jane Jacobs except herself -- and she, of course, is no longer with us -- it seems to me that her published works (and interviews, etc.) just overflow with implied criticisms of the proposed Ratner/Gehry development (which I don't like to call Atlantic Yards since, as you've pointed out, it is much more than just Atlantic Yards). So I'm so glad you mention Jacobs' longstanding opposition to eminent domain abuse, which many Jacobs admirers don't seem to be aware of.


    It also seems to me that in discussions of the Ratner/Gehry plan many Jacobs admirers have focused too exclusively on only one of her books (and on only a few chapters at that) and ignored her other six books. I think these other books, especially the "Economy of Cities," "Systems of Survival" and "The Nature of Economies" contain a number of powerful arguments against the Ratner/Gehry plan.


    The main one that I can think of off-hand is that the Ratner/Gehry plan is really phony economic development (just the way a government sponsored branch manufacturing plant is phony economic development) and that the grass roots revitalization that was already occuring in the area is actually more likely to lead to genuine economic development. ( "The Economy of Cities")


    Also, in "Systems of Survial" Jacobs discusses the ethical systems appropriate to government (the Guardian Syndrome) and commerce (the Commerical [?] Syndrome) and how each of the ethical syndromes is valid in its own sphere but invalid (and corrupting) when applied to the other sphere. (In other words, politicians should stick to government and businessmen should stick to business.)


    However, I think some of the more "established" reasons given for opposing the Ratner / Gehry plan do not jibe with what Jacobs has written (e.g., that an arena would bring too many people into the area, that tall buidings are inappropriate for the area, that the area should remain low density, etc.). These arguments seem to me to be actually anti-urban and kind of Luddite-like, and this is definitely not how I see Jacobs.


    Personally speaking, if Ratner had purchased the air rights of Atlantic Yards from the MTA fair and square and was planning to build with nothing but his own money (i.e., no direct or indirect gov't subsidies) on nothing else but the Atlantic Yards footprint, I don't think there would be much valid reason to oppose him (even though I don't care for the Gehry designs). It would be just an early 21st Century Brooklyn version of Manhattan's early 20th Century "Grand Central Terminal City" (i.e., the railroad terminal, office buildings, hotels, etc. that were built over the New York Central rail yards).


    P.S. -- Thanks for mentioning my comment on the "New York Times" blog about the "Is New York Losing Its Soul?" event. By the time I got to finish writing it, my comment was so far down the list that I didn't think anyone would actually read it!


    P.P.S. -- I've also commented on most of the Jane Jacobs articles that were published in the "New York Sun," but to read them you have to go to the "New York Sun" website and pull up the articles via the archives search box. My comments are at the bottom of the page. (Your links seem to show the Manhattan Institute version of the articles, which I don't think show the comments posted to the "New York Sun.".)


    -- Benjamin Hemric

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  2. A couple of points. Jacobs was not against density, but as I've written, she thought there were limits, and 292 units/acre were above what she thought tenable, especially w/o a mixture of buildings.

    Forest City Ratner's project *is* called Atlantic Yards; the MTA's railyard is called the Vanderbilt Yard.

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