Ohio Court Backs Property Rights

The Ohio Supreme Court, following in the steps of the Michigan court last year, has struck a strong blow against eminent domain abuse in that state. They ruled that economic development was not a legal reason to force people to give up their homes, halting a major development project in the process:

The Ohio Supreme Court ruled unanimously on Wednesday that economic development isn't a sufficient reason under the state constitution to justify taking homes, putting a halt to a $125 million project of offices, shops and restaurants in a Cincinnati suburb that officials said would create jobs and add tax revenue...

"For the individual property owner, the appropriation is not simply the seizure of a house," Justice Maureen O'Connor wrote in a case that pitted the city of Norwood against two couples trying to save their homes. "It is the taking of a home -- the place where ancestors toiled, where families were raised, where memories were made."

Three cheers for the Ohio Supreme Court.

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Great News! Now developers can get back to that good old fashioned means of getting what they want: paying for it.

It's not like developers ever needed state power to help them bulldoze other people's homes to build megamalls. If you think you can make more profitable use of land than the current owner is making of it, just offer the owner what YOU think the land is worth, and if your assessment is right, the owner will make out well, and have little choice but to take it. That sale will then drive up property-tax assessments in the surrounding area, which will then squeeze other landowners to follow suit.

That sale will then drive up property-tax assessments in the surrounding area, which will then squeeze other landowners to follow suit.

Time to end property taxes.

Unfortunately, the news article is a bit loose with its language in claiming that it blocks condemnation for "economic development." What the opinion says is that a town can't just use the claim of "Deteriorating property" to justify redevelopment because that language is unconstututionally vague. That's a step in the right direction, but can be bypassed if the municipality makes sufficient findings of fact in the run-up to condemnation.

The Court also seems to be setting up an intermediate level of scrutiny for such projects, saying, "two competing interests of great import in American democracy: the individual's rights in the possession and security of property, and the sovereign's power to take private property for the benefit of the community" must be somehow balanced.

The bad news is that the town of Norwood feels it should still be able to move ahead with the project anyway, even given the new rules. (Although they will not. There is a similar project near Cleveland that is moving forward, likely triggering a further suit). So the Kelo problem remains unsolved.

Still, it's a start.

What taxes would you increase in exchange for getting rid of property taxes? Sales tax? Feh. Any increase in a sales tax large enough to offset the removal of property tax would drive commerce out of the area, thus actually removing revenue from the community. I'd like to pay less taxes, too, buddy, but if you want roads and stop lights, libraries, highways, schools, pools, plumbing, and all the benfits of living in a society, you're gonna have to chip in. That's what taxes are.

That being said, I deplore the use of eminent domain to take private property and give it to rich developers. If they want it, let 'em buy it.

I'm not sure why anyone's property rights should pre-empt the rights of a community to have jobs, or water, or whatever. Condemnation serves important public interests, often -- do you really believe Detroit was in error to find a site which GM paid for for an auto assembly plant, to give the city a source of several thousand jobs? Should three homeowners have veto privilege over the economic health of 1 million others?

Suppose on my hypothetical little spread of 100 acres in western Washington, there is a small stand of plants found that produce some chemical that cures diabetes and heart disease. But I take a stand that the area should be undisturbed and I refuse access. Consequently, because no one is yet sure even what the chemical in the plant is, the cure is lost to health care.

Why should I have the ability to keep millions of people from cures of death producing disease, just because the plant is on my property?

When Jefferson wrote the phrase, he deleted "property" and inserted "pursuit of happiness." When did it become "life, liberty and pursuit of happiness, but only subservient to any whim of any property owner whose property may prevent any of the foregoing?"

Ed Darrell wrote:

I'm not sure why anyone's property rights should pre-empt the rights of a community to have jobs, or water, or whatever. Condemnation serves important public interests, often -- do you really believe Detroit was in error to find a site which GM paid for for an auto assembly plant, to give the city a source of several thousand jobs? Should three homeowners have veto privilege over the economic health of 1 million others?

First of all, communities don't have rights, only individuals do. And yes, I absolutely believe that the city of Detroit was wrong - not to find a site for a GM plant, but to forcibly take away property from those who didn't want to sell. I don't have a problem with a city condemning property that is actually unsafe and boarded up, but cities constantly use condemnation to seize property that is perfectly fine (the Kelo case is a perfect example). In most state laws they can condemn for "underutilization", which simply means that if someone comes along that says they can use your property to make money, the city can take it from you and give it to someone else. All around the country, we've seen perfectly viable businesses seized by cities to give to a larger corporation to build something more profitable - i.e. something that will put more money into the government's bank accounts.

Stogoe,

Raging Bee stated that "It's not like developers ever needed state power to help them bulldoze other people's homes to build megamalls." Then he makes the statement that when developers move in to make property more profitable, property taxes would rise and squeeze out other land owners. These are two contradictory statements. It's the fault of the government imposed property taxes that are the problem, not the developers of the land. This is an obvious case of unintended consequences, and people like Raging Bee seem to think that we fix government-induced problems with more government-induced stupidity.

What taxes would you increase in exchange for getting rid of property taxes?

None.

but if you want roads and stop lights, libraries, highways, schools, pools, plumbing, and all the benfits of living in a society, you're gonna have to chip in. That's what taxes are.

Or voluntary payment.

Ed Darrell wrote:

Suppose on my hypothetical little spread of 100 acres in western Washington, there is a small stand of plants found that produce some chemical that cures diabetes and heart disease. But I take a stand that the area should be undisturbed and I refuse access. Consequently, because no one is yet sure even what the chemical in the plant is, the cure is lost to health care.

Hmmm...that would be a good use for all those UN Black Helicopters I keep hearing about.

If there are enough people who are firmly convinced that your hypothetical plants will save lots of lives, and have evidence to back it up, there are a number of (not very nice) options, the most obvious of which is to exercise eminent domain based on community medical need (sort of like taking your land to build a hospital). Also, if you're presented with solid evidence that your plants will save lives, and still refuse to budge despite several very reasonable offers, you might be sued for refusing to aid in reasonable lifesaving measures. Also, doctors and law-enforcement could conspire to get a warrant based on a "tip" that you were growing pot on your property; then swoop in and establish a perimeter around the plants, do some more studies, take away some samples for cultivation elsewhere (oops, I mean "evidence gathering"), and, if necessary, "negotiate" with you from a position of strength.

Property taxes are less like other taxes than they are like rent paid to the government. Indeed, in Colonial times, in our area at least, such taxes were actually called "rents."

Income tax and sales tax are both related to the movement of money by the individual paying the taxes. My property taxes are unrelated to either my income or my purchases or my savings. My property tax, based as it is on the current "fair market price," is a direct function of the amount of money that can be afforded by the richest individual who would like to have my land.

I have an elderly neighbor who has lived in her home for fifty years, and has only a small pension and social security to live on, having spent all her savings in her husband's last illness. While she gets a tax deduction for her age it is still true that as new development goes into our area, her property taxes go up (as do mine.)As the undeverloped land area around us grows smaller and smaller, the developers grow more and more interested in old lower-middle-class neighborhoods that can be bulldozed and rebuilt. The government, knowing what such groups would be willing to pay ("fair market value") demands that we pay the same dollars the would-be owners of our property can afford to pay. When we finally can't cut our standard of living enough to match the constantly increasing property taxes, the government will move in, throw us out, and make our property available to the waiting developers.

My neighbor and I are actually better off than some people nearby in small predominately black communities where the authorities seem more aggressive about enforcing back-taxes removals. From time to time, we are all treated to a TV news view of crying elderly black people being dragged off land their ancestors have lived on for as long as 200 years, and owned since 1865.

In my opinion, property tax is primarily a social modification technique, designed to replace small family businesses with corporate-owned business, to replace poor to lower-middle-class families with wealthier people, and to increase the wealth and power of the government. A county supervisor said of an area about thirty miles from me that it was sad the incoming industries and wealthy retirement people heading for the coast were causing property tax problems for small farmers and small business owners whose families had lived on that land since the early 1800's or even longer. But, he said, if the people can't pay the higher property taxes they'll just have to get out because the government needs the money.

Here's a possible solution to the injustice Julia describes: property-taxes should be based on the purchase-price of the property (perhaps adjusted for inflation); and should ONLY be changed by another purchase of the same property. What happens to your neighbors' property should not have an effect on the value on which your tax is based. IOW, if you buy a house for $200K, and the tax rate is X%, your tax is X% of $200K (with or without an inflation adjustment) until you sell it to someone else, at which time the new owner will pay a tax of X% of what HE paid.

There might be a reassessment at the time of inheritance.

What this would do to county revenue, I have no clue.

Bee, California tried that back in 1978 and is still suffering from the aftereffects (no inflation adjustment, but the same general plan, tax value only goes up when the property is transferred). It is a terrible idea because:

1. It creates market inefficiencies because there is an incentive to not ever transfer property;

2. In essence, part of the tax burden of existing owners is transferred to future owners;

3. There is a tendencies for the overall tax rates to rise, because a significant part of the electorate is insulated from the costs of increased spending.

From any viewpoint, this is a public policy disaster.

Voluntary payment? Voluntary payment?! Won't work. Everyone depends on infrastructure, but they hate to pay for it. No one is going to give up their money for roads when they could have a colder AC or a newer car. Everyone expects someone else to 'chip in', and no one actually does.

Voluntary payment? You don't understand humanity very well. Fiscal libertarianism doesn't work.