Reform in Massachusetts?

tax-monster.gifA state representative from Boston has introduced legislation to prohibit eminent domain “for the purpose of commercial enterprise, private economic development, or any private use of the property.” It also prohibits local municipalities from transferring land “on the grounds that the public will benefit from a more profitable use.” According to the Boston Globe, local officials strongly oppose the legislation even though they acknowledge that they almost never use it.

The sponsor of the bill, Martha Walz, sees eminent domain as what it is: the bulldozing of property rights. She told the Globe, “It’s basically a city and government coming in and saying: We don’t like what you are doing with your property; we’re going to sell it to someone else.” Local officials, however, are scared of losing a purported “tool” they can’t remember using. Some, like Framingham town manager Julian Suso, see eminent domain as a way to stimulate the economy. Let’s take some time to examine Mr. Suso’s thoughts.

He tells the Globe: “I think these are not unlike mandates that restrict communities but don’t provide any reasonable alternatives.”

Mr. Suso says this as if eminent domain were the only way to bring economic development–and it is, if local officials tend to be lazy. Cities can, of course, purchase property, like any other entity in the country. They can help attract development by simplifying the regulatory labyrinth, which very often stifles redevelopment efforts. Or they can follow the example of Anaheim and acknowledge market principles in their governance by incentivizing development with a streamlined process.

What’s even more problematic is the notion that eminent domain can be used as an economic stimulus. The flip side of this is the implication that the economy will be stifled without eminent domain, something IJ has found to be false when it found that eminent domain reform had no negative economic effect. The economic factors involved are much larger than just local conditions. One need only look at New London, Conn., where local officials said they needed to use eminent domain for economic development. Three years later, the land is vacant with no prospects of development any time soon. Although local officials like to think they control the local economy, if a developer cannot get financing because of national economic difficulties, there’s nothing local officials can do with eminent domain.

The other argument against reform legislation comes from another usual suspect-type, the Massachusetts Municipal Association, which has little argument except that reform, which they consider an “overreaction,” might produce more lawsuits. So far, the House has passed the legislation and goes to the Senate soon.