Exclusionary Eminent Domain

Abstract

This Article explores the phenomenon of "exclusionary eminent domain" - the exercise of eminent domain that has the effect of excluding low-income households from an otherwise predominantly or entirely middle-class or wealthy neighborhood or locality, whether or not exclusion itself was the purpose of the condemnation. All condemnations exclude the condemned owner (and his or her tenants, if any) from the condemned property. Exercises of what I am calling "exclusionary eminent domain" are doubly exclusive because the displaced residents are unable to afford new housing in the same neighborhood or locality as their now-condemned, former homes. In exclusionary eminent domain, low-incomes households are excluded not only from their homes but also from their home neighborhood or locality.

Exclusionary eminent domain, as I am using the term, seems to occur in two distinct contexts. In the suburban context, a structure or structures occupied by low-income households are condemned by a predominantly non-low-income locality in the interest of attracting new development that will house or otherwise be geared to middle-class or wealthy people. The threatened condemnations of mobile home parks in suburban New Jersey towns such as Lodi are examples of this type of exclusionary eminent domain. In the urban gentrification mode of exclusionary eminent domain, a large city with a mix of wealthy and poor areas condemns low-income housing in a gentrifying or largely gentrified area, with the result that the displaced low-income residents must move to poorer areas of the city or out of the city. The use of threats of eminent domain to facilitate the massive Atlantic Yards development in north central Brooklyn - a development that will feature seventeen luxury towers to be constructed by Frank Gehry - illustrates this model of exclusionary eminent domain. This Article assesses the case for a new state constitutional law doctrine limiting exclusionary eminent domain, and argues that, on balance, the advantages of such a doctrine may exceed the disadvantages. The particular form of exclusionary eminent domain doctrine I am positing would incorporate two of the features of the most analogous existing doctrine, the state constitutional law doctrine regarding exclusionary zoning. Those features are, first, judicial evaluation of a locality's actions in terms of the metropolitan regional needs for low-income housing and each locality's fair share obligation with respect to those needs, and, second, the creation of a rebuttable presumption of illegality when the locality takes an action that will bring its stock of affordable housing below or further below its fair share obligation. An exclusionary eminent domain doctrine would not absolutely bar condemnation of low-income housing in a locality or neighborhood that otherwise has less than its fair share of such housing, but rather would result in the application of heightened review to such condemnations. The condemning authority would have to provide a more compelling, more-tailored justification for condemnation than rational basis review would require.

An exclusionary eminent domain doctrine would raise the cost to local officials of condemning low-income housing located in middle-class or wealthy neighborhoods or localities, and thereby would make it more likely that those officials would configure new development so as to leave such housing in place. The doctrine also would provide a strong incentive for a locality that wanted to proceed with the condemnation of low-income housing to create substitute low-income housing in the same neighborhood as the development site, as by doing so they would negate the claim that condemnations would drop the locality or neighborhood below its pre-condemnation fair share of low-income housing. In addition, the doctrine would have the effect of increasing the bargaining power of owners of low-income housing owners who want to sell, so that they would receive larger payments than they would have if there were no exclusionary eminent domain doctrine.

Keywords: Eminent domian, exclusionary zoning, zoning, affordable housing, Mount Laurel, Kelo

JEL Classification: K11, K19