- Attempts at substantial reform have failed, while passed reform measures leave plenty of loopholes for continued abuse.
In 2013, New Jersey became the 45th state to “reform” its eminent domain laws in the wake of Kelo; but sadly, it went in the wrong direction, and New Jersey maintains its status as one of the worst states in the nation for eminent domain abuse—if not the worst.
The law makes two types of changes to the state’s eminent domain law—one to the procedures the state must use before using eminent domain to take property, and one to the substance of when government is allowed to take property.
First, the law changes redevelopment procedures to permit the creation of “non-condemnation redevelopment areas,” which allows municipalities to use all of the state’s redevelopment tools that enable them to provide incentives to developers, override zoning laws, and impose subjective “design standards” that put unaccountable power in the hands of city hall—but not eminent domain. So far, so good: This provision allows property owners within these areas to have some peace of mind that the government’s efforts at “redevelopment” will not result in condemnation.
But if a city cannot acquire all of the property it wants for a project, it can simply enact a new resolution declaring the area a “condemnation redevelopment area” and subject to eminent domain. The peace of mind offered by these “non-condemnation redevelopment areas,” then, is only temporary: They provide no guarantee that the government will not change its mind and start the condemnation-redevelopment process if property owners refuse to sell.
The procedural changes also make it much harder for property owners to challenge the government’s redevelopment decisions. Before the 2013 reforms, New Jersey courts had held that the state’s notice procedures for redevelopment determinations were unconstitutional. The courts fixed this by giving property owners in condemnation proceedings the right to defend themselves by arguing that the government’s redevelopment designation was unconstitutional.
The 2013 reforms eliminate that right. Under the new law, the state has somewhat improved its notice requirements…in order to strip property owners of the right to defend themselves in condemnation actions. Once the government decides to designate a “redevelopment area,” property owners will have only 45 days to initiate a court challenge to the designation. If they fail to do so, they will be unable to challenge the constitutionality of the redevelopment designation when the government comes to condemn their property—even though the condemnation could happen literally years later. This provision makes it harder for property owners to know their rights are at risk and harder for them to defend themselves against unconstitutional takings of their property.
In another section, the law makes substantive changes that supposedly respond to a recent New Jersey Supreme Court decision. In Gallenthin v. Paulsboro, the court had pared back the old redevelopment law, reasoning that a law that allowed property to be condemned simply because a municipality had deemed it “not fully productive” would be unconstitutional and that the redevelopment law therefore shouldn’t be read to allow municipalities to do that. To the extent the legislature sought to codify Gallenthin, it failed. The new law’s language is at best ambiguous and will surely encourage ambitious localities to stretch the bounds of state law in an effort to use public power for private gain and take private property in the name of redevelopment. New Jersey property owners can take some comfort in the fact that Gallenthin’s reasoning was based in the state constitution, which means the state’s courts should reject any attempts to expand redevelopment powers beyond what that case allowed.
But ultimately, even if citizens can look to the courts for continued protection, the New Jersey legislature has given them little reason to look for hope from a non-judicial source. New Jersey courts have historically been very protective of property rights, insisting that the government must “turn square corners” when dealing with property owners. To the extent the 2013 legislation urges municipalities to cut these corners instead of turning them, it is a betrayal of the legislature’s constitutional duty, and it in no way deserves the label “reform.”
New Jersey law remains desperately in need of reform to ensure property owners get to keep what they have worked so hard to own.