eminent domain

[David Farber <dave () farber net>]

Begin forwarded message:

From: Brad Templeton <btm () templetons com>
Date: June 24, 2005 7:04:01 PM EDT
To: David Farber <dave () farber net>
Cc: provost () georgtown edu
Subject: Re: [IP] eminent domain


On Fri, Jun 24, 2005 at 06:28:42PM -0400, David Farber wrote:

> Dave, Thinking about this case it may help to look at some context.

We, nor the supreme court, I fear, should be looking at the context.
The supreme court should really only be considering the general  
principle.

Are there properties where it would be better for the city if they
were expropriated and redeveloped by private landowners?  Surely
there are.   The question was whether the constituion allows this.
I and 4/5ths of the court think not, 5/4ths think so.

This having been ruled, a more interesting question is perhaps
how to make it more fair.

Normally, when a developer seeks to buy up and amalgamate many
properties, she has to offer a premium over their "market price"
unless she can do it in secret.   Expropriation tends to be at an
estimated market price.   If a developer is interested, it means the
developer (and also the city, if they will expropriate) sees more
value in the land, once condemned and amalgamated, than ordinary
home-buyers in the house market would.

I submit that this value should be given, mostly or wholly, to the
homeowners.  Let the developer reap appreciation after they develop,
not through expropriation and amalgamation.  Let hte city reap value
through the new economic structure they hope for.

In my most recent blog entry at:

    http://ideas.4brad.com/node/231

I go into some thoughts as to how to do this.

One simple method is as follows.  After the condemnation and  
amalgamation,
the developer must set a price for the new market value of the combined
property.   They must pay the homeowners any difference above what
they were paid as "market value" when the land was taken.
(Pro rated by that market value.)

Once they set a price, any other developer may bid at or above that  
price
for the parcel, to develop a similar project.  The highest bid wins,
and again, any difference is passed to the expropriation victims.


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