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Monday, July 2, 2007

Rewarding our bum landlords

This is something that I have been stewing about for sometime. It is the issue of eminent domain, and how I feel that the recent court cases are setting a dangerous precedent that will, in the long run, harm cities chances of revival and ultimately reward those bum landlords and tenants of the world.

Now don't get me wrong, there are surely some instances where the property owner is completely legit in their stance and should not be forced from their home. But most of the time you end up with the logical/sane people selling and moving out, and the others just waiting to prey on the potential investors. This is where I get upset.

We live in a capitalistic market right??? Then shouldn't we be rewarding the individual who is willing to take a risk on a project rather than rewarding the jerk who sat on some property for years and let it go to crap? With eminent domain you are typically offered higher than appraised value for your property, if that isn't enough the potential investor is typically willing to up the ante. But for some, that still isn't enough...they must thoroughly suck out as much as they can and send the redevelopment project into the red.

So you then have an investor who was interested in investing in an inner-city neighborhood who is now fed up and ready to build on a greenfield out in the exurbs. Who wins here...the neighborhood who had a few members stand up and say NO...the investor who lost a lot of money up front on a project that is no more...the municipality that may benefit from increased tax revenue and prestige of a major investment...or is it the few individuals that stood up for "property rights?"

This is a classic Lose, Lose, Lose, Win's great to see it happen before my very own eyes.

A couple recent cases in Cincinnati:
Cincinnati v. Clif Cor Co. (Calhoun Street)
Cincinnati v. Dimasi (Dixmyth Avenue)
Norwood v. Horney (Rookwood Exchange)


Chris said...

Putting "property rights" in quotes is a bit disturbing, but on to the real issue.

Maybe some people have abused the system by being bum landlords, but I am more disturbed by the idea of the government forcibly taking land from one private owner and giving it to another just to raise tax revenues. Theoretically, that means any property could be taken if it could increase tax revenue. The concept of taking blighted properties seems less objectionable, but these governments play a little too fast and loose with what is "blighted."

How is that eminent domain land on Calhoun doing? They have a nice growth of grass it seems, but not so much on the townhouses and retail.

Just remember the lessons of the Poletown case in Detroit. They destroyed an entire neighborhood for GM, and in the end, the plant didn't live up to expectations. I know you put them in quotes, but I am not willing to throw out "property rights" for some development that might leave in a few years anyway when some other area becomes more profitable.

Kevin LeMaster said...

I'm with Chris on this one, though I can understand your points. I like redevelopment as much as the next guy, but not at all costs.

How is it "capitalist" to take one person's private property and give it to another? "Capitalism" implies mutual consent between two private parties. If someone doesn't consent to selling their land, that should be their right.

I also take issue with your assertion that real estate developers are the ones who take risks and should therefore be rewarded. How risky is it for a municipality to aid in assembling your land for you? How risky is it when the municipality gives you tax breaks and grants? How risky is it when there are tax shelters like accelerated depreciation that allow you to write almost all of the project as a loss and then sell it off for a huge profit?

The truth is that there is very little real risk in these mega-projects. That's why we see so many speculative developments being built that seem to defy the laws of economics.

The real risk is in the small project in an untested area, like a guy rehabbing two houses in the West End.

The problem isn't really with bum landlords. They're just a scapegoat. Bum landlords could be easily taken care of with stiffer penalties and more enforcement.

But when a city has a choice of spending more money and hiring more people for enforcement or falling for the rosy forecasts of mega-developers, they pick the latter every time.

Chris said...

I would also like to clarify that I too am in favor of development in general.

I don't think eminent domain is capitalism though. To me, it seems like a great example of "capture," where the government is doing the bidding of a private industry, here the developers.

I wholeheartedly agree with Kevin's thoughts on capitalism.

Randy Simes said...

First of all, the Calhoun project is not has been stopped in it's tracks because of the eminent domain case. Yes UC has reworked much of it's contribution to the project, but the fact of the matter is that if it weren't for the legal case with Arby's/Hardee's then this project would have broken ground already.

While my points of capitalism may be off base, I stand with the notion of classical republicanism. It has a major focus on putting community and the best social interests first.

The whole point about the risk levels with large scale projects is that these projects run into just about ZERO resistance in the exurbs where many more large scale projects occur. The inner-city needs to be able to compete with the suburbs/exurbs in development costs. If not, there will continue to be little to no incentive for major investments to happen.

Just to clarify, I don't want people's properties to be taken over willy nilly...but this whole issue is getting out of hand. You have every single person under the sun challenging every eminent domain case that pops up. It could be for a school, road, or whatever.

There is a need for limitations, and the issue of eminent domain needs to be relooked at. We don't let people do whatever the hell they want on their properties for good reason. Things can get out of hand with no limitations. If you think we live in a truly free society, you're sorely mistaken. Re-examine society, and then look at others...then tell me of a successful society that has had unrestricted rights.

Chris said...

I don't know of any cases where someone challenged eminent domain takings for roads or schools. Those are easy cases, and the "public use" is obvious.

Your main concern seems to be putting cities on the same level w/ exurbs, and that just isn't going to happen, because it's always easier to obtain empty land than land on which people already live.

"There is a need for limitations, and the issue of eminent domain needs to be relooked at."

There is a limit, which is that the government can only take land for a public use, and if it is going to be going to a private developer, it better be blighted. That seems like a pretty fair limit to me. It may be troublesome, but the fact is that if any government or developer just comes into my middle class neighborhood and says, "the current usage does not maximize tax dollars, so get the hell out," of course I'm going to challenge that. And that is what basically happened in Norwood.

As for classical republicanism favoring eminent domain, I'm going to disagree w/ that. From the earliest days of classical conservatives (I mean Locke and Burke types), private property is the most important right of them all. There is some duty to society, but that duty does not involve handing over land. I think the most interesting part of this issue is the coalition that favors eminent domain reform: it isn't left or right, Democrat or Republican.

Randy Simes said...

If you haven't seen a case challenged that involved the taking of land for a road and/or school...then please read through the link I provided about the Emma/Vincent Dimasi case. This was a road project that was on the books for years, but as soon as some other cases came out favoring property owners (in these situations) everyone and their brother (or in this case son) is ready to challenge the issue.

Ever heard of frivolous lawsuits...where is the acoountability in these cases? The city spent money on legal defense for the case and won...what is there reward...the priveledge to move forward with a road project that has been planned for years?

It is also nice to hear that you seem to think it's alright for the big/mean government to swoop in and take the property of low-income individuals. I guess their rights aren't as equal as those with more money. We should all keep that in mind throughout daily life...that poor people aren't as important as other people.

Chris said...

1) "It is also nice to hear that you seem to think it's alright for the big/mean government to swoop in and take the property of low-income individuals."

I neither agreed nor disagreed w/ this assessment, I merely stated the constitutional doctrine, which is that the gov't has the right to take blighted areas for redevelopment. I think blighted areas most often involve the bum landlords the original post came out against. As I said in my original post, taking blighted land does seem less objectionable, b/c then you are taking on bum landlords frequently, but I think the government is a little too quick to call something blighted. I feel that poor people working hard to maintain their neighborhood, who own their houses, and live there too, should be protected, even if the neighborhood isn't doing so well overall. But there are some areas that are blighted b/c of absentee landlords who don't make any repairs or do any upkeep, and those areas probably don't deserve as much protection. It is sad that those areas are often occupied by the poor, but that is why we need to enforce codes against landlords and encourage home ownership at all income levels.

Ad hominem attacks are usually a sign of weakness, by the way. Way to break out the old, "YOU HATE POOR PEOPLE!" argument. I thought CityLink was a bad idea too, have anything to add about that?

2) As for the Dimasi case, here is the impression I was under, and it may be wrong.

"Mrs. Dimasi argued that the real reason that the road was being straighted was so Good Samaritan Hospital could use the land that would be left over after the straightening. The photo at the lower left shows how Good Samaritan does indeed go up to the side of Dixmyth. There is virtually no land left on their side of the road on which they can build. The city denies that that has anything to do with it, although they do admit that Good Samaritan is helping to pay for the road work."

You may be right, but I was under the impression that the hospital expansion was the real reason for the eminent domain. Odds are the hospitals on pill hill won't be there forever (see Bethesda, and rumors about Christ, etc.), so if my belief is true, it goes to show the city is selling out our property rights for some temporary development. You may be right though, in which case it was frivolous.

3) Frivolous lawsuits are a buzzword of the business community. Every lawsuit that might hurt business interests is viewed as frivolous. Of course, as a future lawyer, I am obligated to say that. Nonetheless, I don't (necessarily) view these challenges as frivolous. The Dimasi case might be, but I am not entirely convinced. She had her day in court, so I think the result is a fair one, but that doesn't mean it was frivolous. As for the other two, I'm pretty sure those are not frivolous. And the Supreme Court of Ohio clearly agreed.

Randy Simes said...

So you are saying that you favor eminent domain in a case that involves a bum landlord, neglected property, and/or blighted property.

Of the 3 local cases I presented you seem to aknowledge the fact that 1 of the 3 may have been "frivolous." Well I must follow up with how do you view the Calhoun Street case? Sure many of the properties that had existed there were in good condition with good property owners...but guess what they have left and are not the ones involved in the lawsuit. Instead you have Arby's and Hardee's fighting for their individual property rights. Obviously another case of the little guy being attacked by big/bad government. Not to mention Hardee's has been closed for years and has been an eyesore for just as many.

The same can be said for the Norwood have one owner (of the three) that legitimately lives on the property year round. The others are absent land-owners. I must ask, who is being protected in these cases...the normal citizen or the "bum landlords" (as I so eloquently put it)?

Your thought process is correct and morally sound. But the bottom line is that those people who you feel are being hurt, are usually not the ones sticking around for the legal is the real estate investors who accumulate tons of properties, the large fast-food chains, and those with the know how and ability to fight the system...even if they're fighting a battle they ought to lose.

Anonymous said...

I have lived in Northside for 25 years. Section 8 subsidies are a slumlord's reward on our tax dollars. They get market rate (or above in many case) rents for shit hole houses that destroy neighborhoods (especially ours, Price Hill, you get the pic). The tenants, btw, pay pennies on the dollar to live there.

I completely disagree with your take on emminent domain. The mere thought scares the daylights out of me. Once the gov't starts taking, there is no stopping.

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