The use and abuse of blight in eminent domain.

• Author: Gold, Martin E.
• Position: Fordham Urban Law Journal Symposium

Introduction I. Blight Determinations: More Facilitating Than Limiting II. The Hierarchy of Uses III. Blight and Public Purpose in Columbia's Expansion in Manhattanville IV. Attempted Reforms V. Conflicting Political Forces VI. Creating Better Safeguards Conclusion INTRODUCTION

Blight findings have functioned as a cornerstone for condemnation takings since the severe urban decline in the middle of the twentieth century prompted governments at every level, throughout the country, to actively intervene in the real estate market. Elements of blight, and then the term itself, became a foundational basis for this governmental intervention. But using blight as a basis for that intervention has become increasingly controversial as its application has moved from slum clearance to urban redevelopment, then to economic development projects, and on to revenue enhancing projects--all the while its definition expanded. Immediately following the outcry over the U.S. Supreme Court's decision in Kelo v. City of New London, (1) homeowners, business activists, and state politicians, organized to "reform" their state's eminent domain statutes. A redefinition of blight became a top agenda item. Over its more than half century of use, blight had become a well-worn term of art. But its application to takings is subjective and malleable, so much so that it can now be said to be in the eyes of the beholder. When applied in the interests of curing slum conditions and remedying unsafe and unsanitary urban conditions, it generally functioned as intended. When applied for the purpose of initiating urban revitalization, it also functioned mostly as intended, but all too often with very negative consequences for the large numbers of low-income and minority households and businesses that were uprooted and displaced. But as its application has moved into other domains, including pure fiscal gain and competitive quests to retain and expand corporate facilities, it has been stretched and misused.

In this Article, we take a close look at the issue of blight, its use, and its abuse. In Part I, we briefly describe the origins of the use of blight, and discuss how, in the absence of a clear and unambiguous definition, the eminent domain statutes of the nation's fifty states describe blight through multiple and very diverse criteria. Even prior to Kelo, several states enacted reforms aimed at curbing abuses arising from tabula rasa blight criteria, but these reforms did not change the highly subjective character of its determination. Part I! is devoted to laying out a hierarchy of project uses and benefits. Eminent domain is a balance between government and public needs on the one hand and property owner rights on the other. By creating the hierarchy we can compare the amount of public benefits on the one hand and private benefits on the other in any project. This ladder of uses and benefits moves from pure public benefit at the top, down to nearly total private benefit at the bottom. Where a particular eminent domain taking falls along the spectrum of the hierarchy will depend upon its ratio of public benefits to private benefits. We hope that this will help create a useful perspective and tool to evaluate the usage of eminent domain and blight findings.

In Part III, we consider Columbia University's expansion in Manhattanville and how the findings of blight there were assessed very differently by New York's Appellate Division and Court of Appeals. In Part IV, we discuss the extent to which the post-Kelo reforms enacted in forty-three states redefined blight; and, in Part V, we discuss how political and business forces have weakened and reduced efforts to enact serious reforms. In addressing abuses in the use of blight criteria, in Part VI, we look again at the reforms made in the post-Kelo era and focus on the creation of a better definition through the elimination of the most abused criteria and the use of quantification. Believing as we do that there are clear and compelling reasons for using the power of eminent domain for public purposes (and not just pure public use) our purpose is to see established thoughtfully crafted, objective, and measurable standards for the determination of blight.

1. BLIGHT DETERMINATIONS" MORE FACILITATING THAN LIMITING

   The idea was unconventional, and controversial, from the start. As a condition to be ameliorated by concerted government intervention, "blight" had to be invented. (2) The notion that certain physical, social, and economic conditions short of being a slum, though not yet a slum, only on the way to likely becoming a slum, presented a danger for cities and a threat to public health, safety, and general welfare evolved with time. It took more than thirty years for the concept of blight, blighting conditions, and blighted districts to become the underlying policy logic of urban redevelopment and the basis of positive findings for using eminent domain powers in pursuit of rebuilding the nation's central cities. The first step was taken in the 1920s and 1930s by the efforts of a few states (3) and then the federal government to clear slums and build public housing. This was followed by several pioneering state enabling acts in the 1940s (4) designed to attract private enterprise to rebuild urban areas. Then Title I of the 1949 Housing Act authorizing the federal urban renewal program codified the policy logic of tearing down slums and building middle- and upper-income housing and structures for commerce and industry as urban redevelopment strategy. To promote their cause, the advocates of redevelopment, thinking long-term and tactically, framed blight as an economic drain on cities, not just a social liability. Blighted areas had to be razed because, redevelopment advocates reasoned, they are "incipient slums" and a threat to the fiscal solvency of the city. (5)

   In his major treatise, the first comprehensive study of land values in a large city over an extended period of time, Homer Hoyt described blight as the natural result of economic and social change. Referring to a three-mile belt of land in Chicago extending from the center city, known as the "Loop," which "was once an area of new and vigorous growth in 1873 and an obsolete and blighted area in 1933," he laid out the economic consequences of decline:

   Thus land in what is now known as the blighted area yielded an income and had prospects of enhancement in value due to absorption by industry that it does not have in 1933. Even in 1900, however, the returns from this class of property were capitalized at a high rate, so that the land values as whole had ceased to advance. (6) Hoyt went on to cite the close proximity of the vice section, and of "the advancing line of industries and warehouses" to what once were fashionable residential sections that were sliding downward and losing their social prestige. (7) As a result of these changes in the pattern of the distribution of population and land values, Hoyt concluded that "blighted areas" were more difficult to reclaim because "obsolete improvements and diversified ownership" made them less competitive for redevelopment by market forces than new development on "tracts of virgin prairie" serviced by transit or commuter rail or accessible by automobile. (8) Large sections of the city, for example, the packing plants on the South Side as well as areas on the North Side and near West Side, "seem to offer few attractions for residential development, unless reclamation of the blighted areas is to be attempted on a grand scale." (9)

   The facilitating feature of "blight" was that it was hard to know precisely what it was and therefore hard to define, yet this very vagueness would make it easy to find. The phrases used in the 1930s to describe its conditions unsurprisingly resonate with typical contemporary statutory criteria, pre- and post-Kelo: areas where property values are decreasing; where buildings have become obsolete; where fundamental repairs are not being made; where high vacancies exist; where economic development has been substantially retarded or normal development frustrated; or, where taxes do not pay for public services. Commenting as early as 1918, a Philadelphian professional noted a blighted area "is a district which is not what it should be." (10) Decades later, under Robert Moses' urban renewal machine as well as in cities all across the nation, what constituted a blighted area remained open to argument and debate.

   Whatever the actual merits, cities had good reasons to stretch the meaning of blight, as Bernard J. Frieden and Lynne Sagalyn explained in Downtown, Inc.: How America Rebuilds Cities: (11)

   Federal regulations that emphasized clearing the most unlivable areas conflicted with other rules requiring local renewal agencies to sell their cleared sites to private developers for rebuilding. Few developers were willing to build in the heart of the slums. Cities such as Newark tried in the early years of the program to plan middle-income housing in some of the worst parts of the city, only to discover that no developers were interested. Soon city renewal directors were searching for "the blight that's right"--places just bad enough to clear but good enough to attract developers. (12) Because the federal government was picking up two-thirds of the cost to clear blighted and slum areas and write-down the cost of selling the land to developers, (13) it would not have been unreasonable to expect government bureaucrats or congressional legislation to define the specifics of the urban renewal program and exercise control over what local agencies did with the grant monies. Yet, Title I left these specifics to local governments and their redevelopment agencies, which were heavily influenced by downtown business interests and real estate developers. This coupling formed the basis of a formidable and enduring redevelopment alliance between government and business. Federalism likewise...