Working Paper No. 06-10:
The Green Costs of Kelo: Economic Development Takings and Environmental Protection

Author(s):

Ilya Somin, Jonathan Adler

Date Posted: 2006

Availability:
Abstract (below) | Full text (most recent) on SSRN

Abstract:

This Article is the first academic paper to systematically consider the environmental impact of the Supreme Court's decision in Kelo v. City of New London and of economic development condemnations more generally.  Kelo upheld "economic development" takings — condemnations that transfer property from one private owner to another solely on the ground that doing so might improve the local economy or increase tax revenue.  The decision stands in sharp contrast to the Michigan Supreme Court's ruling in County of Wayne v. Hathcock, which forbade the use of eminent domain for economic development. 

Part I briefly explains the rationales of the Kelo and Hathcock decisions and shows why a Hathcock-like ban on economic development takings is highly unlikely to impede environmental regulation or the use of eminent domain for legitimate conservation purposes. This doctrinal point is buttressed by empirical evidence indicating that none of the nine states with judicial bans on economic development takings have ever used such a ban to strike down the use of eminent domain for environmental or conservation purposes.  Part II shows that economic development takings actually threaten environmental harm.  Allowing the use of eminent domain for economic development poses a particular threat to private conservation lands and open space.  Because land owned by conservation nonprofits produces few economic benefits and does not contribute to tax revenue, it is likely to be targeted by developers and local governments that use eminent domain to advance their development interests. Economic development takings can also damage the environment by promoting environmentally harmful development, undermining property rights, and furthering dubious development plans that sap community wealth and reduce resources available for environmental protection. In many situations, economic development takings end up giving us the worst of both worlds: they cause environmental harm and reduce economic growth by transferring land to inefficient development projects.