Real Estate & Property Law

Pa Court: No Public Use Because Residential Use Is Not "Blight"

By Robert Thomas (inversecondemnation.com)

You own a home built in 2002. A couple of years later, the county redevelopment authority decides that your home, and the properties your neighbors own, would together make a grand site for an industrial park. Your properties are "shovel-ready" (the authority's term, not mine) and primed for industrial development.

So it decides your home is "blighted." Nothing wrong with your property, mind you. No "urban decay," no unsafe, unsanitary, inadequate, or overcrowded conditions (you know, attributes that come to mind when we think of a blighted property). Although acknowledging there is nothing wrong with your home, the authority maintains that your use of the property as a residence is "economically and socially undesirable" merely because industrial use is a "better" use and, therefore, you are underutilizing your land. Consequently, your property is blighted and the redevelopment authority can take it. The trial court finds that the authority's claim of blight is "capricious and not in good faith," but allows the taking because you failed to prove the agency acted in bad faith when it determined your home was "economically and socially undesirable."

Well, thank goodness for the en banc Pennsylvania Commonwealth Court. In In re Condemnation by the Redev. Auth. of Lawrence County, No. 1293 C.D. 2007 (Dec. 22, 2008), the court held that in the above scenario, the property could not qualify as blighted or as an economically undesirable use. The mere fact that the redevelopment authority asserted that industrial uses of the land would be more economically efficient ("the use of condemnees' properties was considered an impediment to industrial development") was not enough. The court expressly rejected the rule established by the U.S. Supreme Court in Kelo v. City of New London, 545 U.S. 469 (2005), noting that in Kelo, the Court held that state legislatures were free to provide more protection against such takings, and that the Pennsylvania legislature had done so.

The Commonwealth Court held that blight must be determined by reference to objective criteria, not the government's claim that a property is being underused because the government wants to make more intense use. 

We conclude that the County Planning Commission failed to apply the proper standard for determining whether the properties in the Area were maintained in economically undesirable uses and, hence, improperly certified the Area as blighted. The only apparent criteria used to determine the economic undesirability of the uses was the comparison with the intended industrial uses and the conclusion based on that comparision that the properties in the Area could be put to more lucrative use. The record leaves no room for any conclusion that the properties in the Area specifically inflict any affirmative harm on the community due to the physical condition or the use of those properties. The desire to put the properties to industrial use does not render their present use undesirable within the meaning of [the statute].

Slip op. at 15. This rule makes sense, since otherwise, the government would be able to take any property at any time simply by moving the goalposts.  More intense use of land is nearly always possible, and if that were the rule, a property owner could never object to a blight declaration or a taking.  Download the slip opinion here.

This is the second decision in a week to conclude the courts cannot simply accept at face value the government's word that a taking is for public use; on December 24, 2008, the Hawaii Supreme Court held in County of Hawaii v. C&J Coupe Family Limited Partnership, No. 28882, that even when a taking is for a road, courts have an obligation to consider evidence that the claimed public use is a pretext hiding a private benefit. 

Full post as published by inversecondemnation on December 31, 2008 (boomark / email).