Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

"A strong conviction that something must be done is the parent of many bad measures."
  -- Daniel Webster

Tuesday, October 20, 2015 :::

As the bulk of the authorship and readership of this blog approaches our forties, it's hard for us to remember what we've already said, but perhaps it's also hard for you to remember.  I'm not promising that there's anything new here except for an example; I just heard a radio ad complaining about the use of eminent domain to build a pipeline.

I have seen (a couple times in the last month or two) the idea that some Presidential candidate should run against Kelo, and I want to start by reiterating that I think Kelo was decided correctly, and as such is an illustration of the fact that you have to vote for good government, as the constitution does not simply forbid bad government.  Further — this is almost certainly a repeat from earlier commentary — restricting eminent domain use to some poorly defined "public purposes" doesn't strike me as a remotely efficient way to curb eminent domain abuse; if it reduces the number of likely uses by a certain fraction, it provides a certain amount of added protection, but there are more apposite ways of reducing eminent domain use by the same fraction or more that would impair less socially valuable development.  If my property is taken, I don't much care whether it's taken for a school or a similarly sized office building.

It seems to me that the best argument for retaining eminent domain is to solve hold-up problems; if you need to build a road, you probably need to put together land from many different property owners, and if you buy the land from 99 out of the 100 you need, the last guy can extract a huge amount of money from you.  A pipeline seems like a similar social good, but it also makes at least some sense to me that pipelines would be built, maintained, and owned by private entities.  Again, I would be no happier having my land taken for a road than for a pipeline, and I certainly wouldn't be happier having it taken for a state-owned pipeline than for a privately-owned pipeline.  The protections I would put in place for eminent domain, then, are:
  • You should have to get a substantial majority — say 3/4 — of the relevant property owners to go along willingly; the minority of property owners is being bound not just by the majority of the town electorate, but by a supermajority of at least somewhat similarly situated property owners; if you can't get that, you're probably not offering just compensation, regardless of what procedural protections might exist for determining what that is.
  • Assets don't have prices, and for something like real estate insofar as we can pretend they do the price is only well-defined to within a fairly wide band. If a transaction is being compelled by one party, "just compensation" has to err in the favor of the other party; the sale price should be at least the highest "market value" that could reasonably be guessed, and probably a bit higher for good measure.
Insofar as the pipeline has multiple physically plausible routes, one of the criteria the builder will have to consider is how easily the land (or easements) can be acquired, and a route that implicates a lot of property owners who don't want the pipeline will (and should be) strongly disfavored compared to one where there are only a few hold-outs.  The same is true of roads.  In any case, it seems to me that these rules are very protective of property owners compared to the counterfactual rulesets that define "public purposes" for which property may be rapaciously taken with neither of these protections, and at the same time avoid requiring that the state own any large project that is going to take place.

Addenda: Ilya Somin has a round-up of links, including some observing that condemnation victims often don't even get a reasonable "fair market value" compensation, that people unwilling to sell at "fair market value" likely really do place a higher value on their property than that, and that tools of political power generally harm those who are less politically powerful and benefit those who are more politically powerful. One more note that I would like to make about 'at least the highest "market value" that could reasonably be guessed': if a lower bound on what the buyer would pay for all 100 properties is $20,000,000, and each of them has an upper bound "fair market value" of $100,000, there's an extra $10,000,000 in value to be had from assembling the properties together — and no particularly compelling case for giving all of that to the buyer, as "just compensation" typically does. (Is "fair value" $100,000 or $200,000? To some extent, this highlights again the fallacy of supposing the question has a precise answer.) And, just to repeat, this is true whether this is for a public road or a private developer; if the public road is really going to be that valuable, the town should be willing to pay the premium to the people being dispossessed.


::: posted by dWj at 9:36 AM

I have had the thought that rather than the state naming the price (as I think generally happens) the unwilling seller should name the price, after which the state has the option of explaining to a court why the price is unreasonable.

Post a Comment

Comment Policy

Dollars and Jens
Steven's web-site

Kitchen Cabinet
Colby Cosh
The Volokh Conspiracy
The Corner
The Bleat from James Lileks
Tim Blair
Daily Ablution
Mickey Kaus
Dave Barry
How Appealing
Virginia Postrel
Reason's "Hit and Run"
Captain's Quarters
Roger L. Simon
Power Line
IWF's InkWell
Blogs for Bush
Chetly Zarko
Signifying Nothing
Cosmo Macero
Hub Blog
Ex Parte from Harvard Law's Federalists
Harvard CR blog
Priorities & Frivolities
Daley News
Emil Levitin
Politica Obscura
Wave Maker
Town Watch
Worcester County Repubs

Election '08
Don't Vote
Dave Barry
John McCain

Other Sites of Note
Townhall columnists Cambridge Republican City Committee
Cambridge Chronicle
Robert Winters
Boston Herald
Boston Globe
Boston Metro
Channel 5
Commonwealth Mag
Fox News
Massachusetts Republican Assembly
Robert Benchley Society

U.S. Constitution
9/11 commission report [7 Meg PDF]
Iraq Survey Group report
Fahrenheight 9/11 deceits


Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

Powered by Blogger