Real Estate & Property Law

Speculators and Constitutional Amendment Are Not Related

By Alan Ackerman

Wayne State University Law Professor John Mogk has concluded that a 2006 amendment to the Michigan Constitution somehow benefits speculators buying Detroit properties at tax sales. The amendment limited the use of eminent domain for 'economic development' and required clear and convincing evidence to condemn land to alleviate blight. With this diluted eminent domain power, Mogk argues, the City falls victim to the greed of speculators, whose exorbitant princes hinder revitalization.

In reality, the City can acquire tax sale properties by eminent domain, so long as it clearly and convincingly demonstrates a need to alleviate blight. This blog has discussed East Harlem, New York, where residents rebuilt neighborhoods themselves. Now, they have to defend their homes and businesses against the city government's false designation of 'blight' in order to facilitate economic development projects that benefit private business.

That people buy Detroit properties at tax sales has nothing to do with the 2006 Amendment. Rather, the fact that Detroit has 100,000 vacant lots ripe for tax sale is the problem. If Detroit limited tax foreclosure sales, the issue would resolve itself. Or the City could simply present clear and convincing evidence that it needs to combat blight. Whatever the case, blaming constitutional limits on eminent domain is wrong.

The Detroit News

In 2006, motivated by fear that politicians were using eminent domain to seize family homes for projects of corrupt pals and powerful corporate interests, Michigan voters overwhelmingly adopted a state constitutional amendment banning the use of eminent domain for economic development.Although the city has always faced excessive price demands by speculators, Mayor Kwame Kilpatrick was silent with respect to the crippling effect the measure could have upon the city's future.

Voters were assured that Detroit could still acquire private property for public improvements, such as parks, schools, roads and government buildings, and to eliminate blight. However, these two possibilities offer false hope of reversing the city's decline. Detroit cannot afford to maintain vast areas of park land and open space that yield no tax revenue or jobs for residents. Cleared lots do not meet the blight test which must be proved separately on each lot to qualify for acquisition under the current restrictions to eminent domain.

Full post as published by National Eminent Domain Blog on March 01, 2011 (boomark / email).