The Misguided Battle over Eminent Domain in New York

The New York Court of Appeals heard oral arguments yesterday in the eminent domain case involving the Urban Development Corporation's effort to take over "Manhattanville," a 17-acre area in West Harlem, on behalf of Columbia University. The judges yesterday were pretty ornery, peppering both sides with questions about the studies underlying the "blight" designation and the "public" character of Columbia University's educational activities. I stand by my earlier prediction that the Court of Appeals will reverse the appellate division's decision barring the condemnation. But the doctrinal battle between the appellate division and the Court of Appeals really is rooted in empty, incoherent blather that can never be a satisfying basis for a doctrine. "Blight" is an epithet in search of a definition, while "public use" is either merely a requirement of public benefit (in which case, it is judicially unmanageable) or a requirement of public title (in which case, it is a perverse encouragement of statist inefficiency).

The concepts of "public use" and "blight" ignore the real and fundamental dilemma raised by over-fragmented land -- viz.: (a) land markets tend to do a poor job of re-assembling over-fragmented parcels but (b) assemblers use eminent domain to hog all of the post-assembly surplus, to the justified resentment of the dispossessed owners. Absent some assembly mechanism beyond arms' length private bargaining, Manhattanville will be locked into drab industrial uses -- gas stations, storage facilities, auto repair, etc -- that, I strongly suspect, the owners themselves would quickly jettison if they could get a reasonable share of the "post-assembly" value. Getting rid of eminent domain will not vindicate these owners' private property rights: It will simply insure that they can remain trapped in a collective action problem that even the wiles of a Douglas Durst cannot untangle through interminable secret negotiations by beards and front-men.

The best answer to this dilemma is the creation of a mechanism by which the neighborhood's owners can collectively decide whether to sell their land. Such neighborhood self-governance would protect the owners' autonomy as well as their power to extract some share of the post-assembly value; It would also protect both society and the owners themselves from the owners' own strategic behavior in parcel-by-parcel bargaining. Michael Heller and I have proposed such a mechanism -- the land-assembly district -- that, whatever its faults, surely outperforms the twin evils of pure private property or pure eminent domain. Until such a device is created by a state legislature, however, we will be locked into the fruitless battle between advocates of private property who declare that eminent domain is unfair and advocates of eminent domain who assert that private holdouts make individual bargaining inefficient. The tragedy is that both sides of this fruitless argument are right. Any resolution to an argument framed in this barren way will either leave our cities unjustifiably drab or our urban landowners, justifiably furious.