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Thursday, June 23, 2005
More on takings & privatization
Kelo | Posted by Eric Claeys at 05:09 PM
I have heard Eugene Volokh's point before, and I have not been persuaded, for two reasons.
First, as a political matter, I just don't see why cities would respond to narrower conceptions of blight and economic development by condemning the land anyway and running state-run businesses. Let's assume that, most of the time, city governments and development corporations keep the respectful distance from developers and Walmarts that Justice Kennedy expects them to. Even then, the developers and Walmarts play a substantial role in initiating the condemnations; if they don't stand to get the land, I suspect cities won't aggressively look for it on their own. And most of the cities that use eminent domain for economic development are strapped for cash anyway. So if those cities knew they'd need to pay for what they took and operate the land, quite often they'd balk at putting up the money.
Second, the city's cost-benefit analysis is fundamentally different in the two cases. When the land goes to a private buyer, the city doesn't need to worry about whether the buyer will generate the benefits it claimed. As happened in Kelo: even if it turns out that the developer may never build a hotel that was supposed to generate some of the promised jobs and taxes, that's not the city's problem once the land is transferred. But if the city officials know they need to make a profit on the property they take, one would think they would internalize a lot more externalities before pulling the trigger.
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Comments
"But if the city officials know they need to make a profit on the property they take, one would think they would internalize a lot more externalities before pulling the trigger."
But why would we want government to be more efficient at taking our property and vouschafing it to venture capitalists? Don't we want more inefficiency here?
Posted by: G. Kole at June 23, 2005 10:02 PM