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Opinion Donald Trump’s lightweight defense of taking property for private development [updated with a brief discussion of pipeline takings]

Donald Trump.
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In tonight’s GOP presidential debate, Donald Trump, who has a history of lobbying governments to take property for his own private projects, once again offered a dubious defense of takings for private development:

Eminent domain is an absolute necessity for a country, for our country. Without it, you wouldn’t have roads, you wouldn’t have hospitals, you wouldn’t have anything. You wouldn’t have schools, you wouldn’t have bridges…
And what a lot of people don’t know because they were all saying, oh, you’re going to take their property. When somebody — when eminent domain is used on somebody’s property, that person gets a fortune. They get at least fair market value, and if they are smart, they’ll get two or three times the value of their property. But without eminent domain, you don’t have roads, highways, schools, bridges or anything.

The best that can be said for Trump’s latest defense of eminent domain for private projects is that it is less absurd than his previous claim that such condemnations are really “not taking property” at all. Still, almost everything Trump says here is false. The vast majority of hospitals, schools, and other similar structures were and are built without the use of eminent domain. Those who construct them can acquire property through voluntary purchase, just like everyone else. It is also false to claim that people who lose their property to eminent domain typically get “a fortune.” In reality, they often fail to get even the “fair market” value required by Supreme Court precedent; and fair market value is itself inadequate compensation for the many property owners who value their land above its current market price (for example, because they have close social ties in the neighborhood, which would be lost if they were forced to move). If eminent domain really were a good way to make a fortune, the Donald Trumps of the world would be actively lobbying the government to condemn their property. But that rarely, if ever, happens.

It is true that eminent domain is sometimes necessary to build public infrastructure, such as roads. Unlike private developers, governments are often unable to use secret assembly and other techniques for getting around potential holdout problems. But the fact that eminent domain may sometimes be needed for public projects in no justifies its use for private ones, including Trump’s own effort to use it to take the home of an elderly widow so that he could use it to build a limousine parking lot for one of his casinos. In addition to victimizing property owners, such condemnations for private projects generally destroy more economic value than they create, and often victimize the poor, racial and ethnic minorities, and others with little political influence.

Perhaps realizing that such takings are hard to defend, Trump claimed that he “didn’t take” the widow’s home, but instead “walked away” when she refused to sell. In reality, Trump only “walked away” because the condemnation was struck down a New Jersey state court. Otherwise, he would have been more than happy to have the government take Vera Coking’s house for his benefit.

Private takings of the type that Trump defends were upheld by the Supreme Court in its controversial 2005 decision in Kelo v. City of New London. Trump has defended Kelo, despite its widespread unpopularity. This is actually one of the few issues on which he has been consistent over a long period of time. When it comes to eminent domain, even socialist presidential candidate Bernie Sanders, who denounced the Court’s ruling, has been a stronger defender of private property rights than Trump.

Kelo’s unpopularity doesn’t necessarily mean the Court was wrong. But the decision was wrong, nonetheless, because the majority relied on badly flawed reasoning that cannot be justified from the standpoint of either originalist or living constitution approaches to legal interpretation. Justice John Paul Stevens, author of the majority opinion, has even admitted that it was based in part on what he calls an “embarrassing to acknowledge” error in interpreting precedent.

In addition to its dubious legal reasoning, the Kelo case also exemplifies the dangers of using eminent domain as a tool for promoting economic growth. Over a decade after the Supreme Court’s ruling, nothing has yet been built on the condemned property, in large part because the development project was badly conceived and ultimately fell through. However, the feral cats who currently use the land might well agree with Trump’s view that “eminent domain is wonderful.” The rest of us have good reason to be skeptical.

UPDATE: It is worth noting that a couple of the points made above were also made by Jeb Bush during the debate. Bush noted the important distinction between the use of eminent domain for private projects and public ones and emphasized that Trump did not just “walk away” when Vera Coking refused to sell.

UPDATE #2: I have made a minor addition to this post, noting that if you really could make “a fortune” by having your property condemned, Donald Trump and other politically influential people would be actively lobbying to have their own property condemned. Obviously, however, they rarely if ever do so.

UPDATE #3: For those interested in my views on pipeline takings (which also came up in the GOP debate), see here, here, here, and Chapter 8 of my book on Kelo and eminent domain. My bottom line is that such takings are sometimes constitutional under the correct interpretation of the Fifth Amendment’s Public Use Clause, in cases where the pipeline in question functions as a common carrier with a legal obligation to serve the entire public. In some cases, they might also be a good idea on economic grounds, because it is sometimes harder for pipeline builders to avoid holdouts than for ordinary private developers to do so. It is also rare for pipeline takings to displace large numbers of people and businesses, in the way economic development and “blight” condemnations often do. But pipeline takings should be much more tightly constrained than they are today in many states, where the common carrier restriction is often honored only on paper, and oil companies and others often get almost a blank check to condemn whatever property they want. Alexandra Klass of the University of Minnesota has written extensively on this subject, and I agree with much of her analysis.

UPDATE #4: Prominent takings scholar Gideon Kanner has some relevant thoughts here.