Alerts and Updates
New Jersey Assembly Holds Hearings on Eminent Domain, Part of a National Debate
April 17, 2006
The U.S. Supreme Court's decision in Kelo, which held that no finding of blight was required for condemnation, brought the business of redevelopment and condemnation to the public's attention. And, the public backlash against the decision was swift and loud. Even Justice Stevens, the author of the Kelo opinion, told the New York Times, "I would have opposed it if I were a legislator."
Since the Kelo decision, most states have reacted to the public outcry by introducing legislation that would prohibit condemnation to further redevelopment without a specific finding of blight. Currently, approximately 40 states are considering eminent domain reform of some sort and the U.S. House of Representatives has passed a bill that would withhold funds from municipalities which allow condemnation for purely economic reasons. Indeed, the Supreme Court invited this reining in of the power of eminent domain: "We emphasize that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power."
Underscoring the high profile of eminent domain and redevelopment in New Jersey was the announcement by Ronald Chen, recently sworn in as New Jersey's public advocate, that his first priority would be to review the use of eminent domain for private development. Additionally, the New Jersey Assembly Commerce and Economic Development Committee (the "Committee"), chaired by John J. Burzichelli (D-Gloucester), has begun a series of hearings ("three or four") in the Assembly on eminent domain in order to examine the issue from all sides. According to Burzichelli, the hearings will "bolster public confidence in the process." The hearings will focus on the criteria for using the power of eminent domain and the compensation to be paid to property owners who are subject to condemnation.
From a pure condemnation law perspective, Kelo changed very little in New Jersey, since New Jersey's current redevelopment law requires a specific finding of blight. However, as to both redevelopment law and condemnation law more generally, Kelo is important as it applies to the future decisions of legislative bodies and the courts - particularly in those states that have imposed more rigorous restrictions on the use of eminent domain, or where the courts have not spoken on the issue of condemnation solely for economic development. In New Jersey, the concern has turned to the loose interpretation of the concept of blight. The Committee has indicated a need to tighten the criteria for declaring an area blighted or "in need of redevelopment," as the current statute requires.
The Committee first took testimony from property owners, redevelopers and municipal officials. In future hearings, the Committee will examine bills that have already been introduced to limit the use and impact of eminent domain. One such bill would limit the use of eminent domain on most residential properties where the redevelopment is to be privately owned. Other bills place a moratorium (24 months and 48 months) on the use of eminent domain for any purpose. Bills have also been introduced to clarify the concept of just compensation. One bill requires that compensation to an owner take into consideration the cost of replacement property within the same geographic area; another such bill would require that the value of the property to the redeveloper be considered in awarding just compensation. However, during the Supreme Court's argument on Kelo, one of the justices asked whether it would be fair to pay a premium (of four times the value) to obtain property through condemnation. Surprisingly, none of the introduced bills consider such a multiplier or mention legal fees as being part of just compensation.
Clearly, Kelo has awakened public opinion regarding the business of redevelopment and condemnation. But, while an avalanche of bills have been introduced throughout the country, only a very few of them with any real meaning have actually become law (Alabama, Texas, and Georgia being the exceptions). Consider Maryland, where recently disagreements on how to rein in eminent domain led the Maryland Senate and House to let all bills on the subject simply die. So, while most lawmakers have reacted to the outcry, it remains to be seen how many will follow through completely and enact the introduced legislation.
For Further Information
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