Ohio Court Moves To Protect Homeowners

Written by Posted On Monday, 31 July 2006 17:00

When last we left off with the Kelo case, arguably the worst Supreme Court decision in decades, Congress and various local governments were promising to legislate a way around a ruling that would let government take your home for virtually no reason at all. But now something more remarkable has happened, the Ohio Supreme court has effectively challenged our nine top justices.

The 2005 case, Kelo et al v. City of New London , over-turned 200 years of real estate law and thinking. While previously the government had the right to seize private property under the "taking" clause of the Fifth Amendment , it also had an obligation to pay "just compensation." Moreover, it could not just take property willy-nilly, there had to be a clear "public use" to justify the seizure of someone's home.

The Fifth Amendment standard offered a balance between public and private interests. It allowed government to acquire private property when the public would benefit, but it assured that owners would be paid for their land. Thus if government wanted to build a road, it could take private property because the road would benefit everyone.

Kelo turned all of this on its head. The 5-4 decision said government could take your home when that "taking" served a "public purpose." For instance, a local government could condemn your property and sell it to a private developer. This would be okay under Kelo because the "public purpose" could be nothing more than the attainment of larger tax revenues for the local government.

You can see where this could lead. Elected officials could grab land under the concept of eminent domain from numerous owners, assemble it and then re-sell the property as a single package to private developers. The tax base would be enlarged -- thus creating a "public purpose" -- and developer profits would also grow. In effect, land would be taken from one private owner and given to another; developers would not have to deal with holdouts who did not want to sell and while properties would be purchased on the basis of their individual value, when combined and assembled that value would be much greater -- but the original owners would not get the benefit of the higher value.

The good news about the Kelo decision is that it set off a public uproar. People of all political views understood that Kelo was a nasty, awful decision. Even Congress did the right thing: By a vote of 376-38 the House passed the Property Rights Protection Act of 2005 . The beauty of this bill was that it would withhold federal development funds for two years from any state or local government that acquired property for private development under Kelo. (The bill now awaits committee assignment in the Senate.)

The message from the House was clear and now we have a summer-time gift from the Ohio Supreme Court.

In 2002 the city of Norwood said it would take possession of 70 homes in a "deteriorating area" and then re-sell the properties to a private developer who would construct more than 200 apartments or condominiums and over 500,000 square feet of office and retail space plus two large public-parking facilities that would be owned by Norwood. The project was expected to generate $2 million a year for the city.

However, in Norwood v. Horney , the Ohio Supreme Court unanimously said no deal. The problem? Several, according to the jurists.

First, no one can define a "deteriorating area." What's deteriorating to you could be a palace to me.

"The use of the term "deteriorating area" as a standard for a taking is unconstitutional," said the Ohio court, "because the term inherently incorporates speculation as to the future condition of the property to be appropriated rather than the condition of the property at the time of the taking."

Second, there is the matter of "public use."

"Although economic factors may be considered in determining whether private property may be appropriated, the fact that the appropriation would provide an economic benefit to the government and community, standing alone, does not satisfy the public-use requirement of Section 19, Article I of the Ohio Constitution."

The Ohio Supreme Court got it right, and perhaps the real reason has little to do with politicians, developers, legalisms or cash. As the option said:

"Appropriation cases often represent more than a battle over a plot of cold sod in a farmland pasture or the plat of municipal land on which a building sits. For the individual property owner, the appropriation is not simply the seizure of a house. It is the taking of a home -- the place where ancestors toiled, where families were raised, where memories were made. Fittingly, appropriations are scrutinized by the people and debated in their institutions."

Imagine that, individual citizens have rights -- and those rights count.

For more articles by Peter G. Miller, please press here .

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