By Larry Jones
October 3, 2005

House and Senate committees held hearings over the last few weeks to examine the impact of the U. S. Supreme Court’s decision in Kelo v. City of New London. After decades of economic decline and high unemployment, the City of New London used eminent domain to take private property that was turned over to a private developer for economic development. At issue was whether economic development, which produces jobs for local residents and tax revenues that are used to provide public services, can be a “public use” under the Fifth Amendment Takings Clause.

The Supreme Court answered on June 23, affirming the city’s use of eminent domain in taking private property to promote economic development. The ruling attracted lots of press and prompted a huge public outcry in opposition to the decision. In response, a broad bipartisan group of members in both Houses of Congress have announced their support for legislative proposals that would restrict local use of eminent domain for economic development.

At a September 20 Senate Judiciary Committee hearing and a September 22 hearing held by the House Subcommittee on the Constitution, a number of Senators, Representatives, mayors college professors, citizens and representatives from religious and civil rights organizations provided their views on the Kelo decision. At the September 20 hearing, Susette Kelo, one of the property owners whose property was seized in the case, told members of the Committee that the Court’s decision means that “private property, including my home, [can] be taken by another private party who promises to create jobs and taxes with the land.” To prevent this from happening again, Kelo urged members of Congress to pass legislation that will deny federal funds to cities that abuse eminent domain for private development such as the type that allowed her home to be taken.

But Hartford Mayor Eddie Perez, who also testified at the September 20 hearing, provided a different view. He criticized what he called “frenzied rhetoric and misinformation” reported in the press about the Kelo decision. He said, “If all I knew was what I read in the newspapers, then even I would be worried that my hometown of Hartford would bulldoze my house.” Perez told members of the panel that eminent domain is a powerful economic development tool that cities use sparingly to create jobs, grow business and strengthen neighborhoods. He further cautioned members against passing legislation restricting state and local use of eminent domain, pointing out that it could discourage homeownership, particularly in poor communities.

At the September 22 hearing, Indianapolis Mayor Bart Peterson urged Congress “to avoid taking any hasty action that would undermine state and local authority with eminent domain.” He also urged “a careful examination of the underlying premise of proposals in Congress that would severely restrict or eliminate the ability of cities to use eminent domain for economic development.” Peterson pointed out that cities most often use eminent domain as a negotiating tool with property owners. Without it, he said, “It would be impractical to undertake large economic development project.”