The big 2005 Supreme Court case – Kelo v. City of New London – that underscored a city’s right to use eminent domain to take private property and give it to another private owner has reached a perhaps inevitable denouement: the City of New London, CT, took Susette Kelo’s house, and a bunch of others, for a private “urban village” to be built next to a new Pfizer development. Now Pfizer is leaving, and taking 1400 jobs with it. Yowch.

The real lesson here has less to do with eminent domain and more to do with economic development. Conservative justices voted against the city, but in a sense the use of eminent domain for private redevelopment has been with us since Berman v. Parker in 1954, which paved the way for urban renewal and preservation. Memory refresher: urban renewal was a public program, but it basically worked like this: the government declared an area “slum and blighted,” bought up all the land and gave it to another private developer to achieve the renewal. Yes, there were housing projects that were completely public, but the biggest part of urban renewal involved the same sort of eminent domain and transfer of property to another private owner we saw in New London. Continue Reading

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