Hunting a way to make private expropriation more fair

brad — Thu, 23 Jun 2005 17:49:07 -0700

Well, the Supreme Court ruled today that expropriation for private development can still be legal if the town council seems to think there’s a public benefit. It’s a terrible decision, with strange logic, and strange votes from the judges, but you will probably read many other articles about that today. What I want to figure is, given this ruling, what can we do to make it better?

What we will see happening is a land developer coming to the city with a plan to demolish a redevelop a block in a way that they claim will be good for the city — perhaps bringing in tourists, jobs, business, whatever. Of course the deal is very good for the land developer, or they would not be drafting it.

I suggest we make it less sweet for the developer in such cases and give some of that sweetness to the expropriation victims. Today they get a “fair market value” for their property (that part of the 5th amendment wasn’t shredded) but I say, if the expropriation is for private use, let’s give them more.

First, start by paying them this fair market value at the date of expropriation, as we do now.

Then, after the deal is complete (with some time limits and other good constraints) we want to determine just how much “value” came from aggregating the properties. Right now this value goes to the developer. We’re going to give most or all of it to the expropriated folks. So we come up with a value for the amalgamated property. (More below on how to do that.) This pre-opening profit would go, all or most of it, to the landowners. The developer keeps any further appreciation of the property as they operate it — they need an upside too, of course.

More ideas follow…

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Hunting a way to make private expropriation more fair