November 3, 2005

House approves bill to restrict land seizures

By David Lawder

WASHINGTON (Reuters) - The U.S. House of Representatives
voted overwhelmingly on Thursday to restrict the seizure of
private property for private development by denying local
governments federal economic development funds for two years if
they take such a step.

The "Private Property Protection Act of 2005" would bar the
federal government, states and localities from using their
power of eminent domain to seize property for private economic
development projects such as shopping centers or condominiums.

The bill, passed by a 376-38 vote, is part of a backlash
against a U.S. Supreme Court decision in June to enshrine
economic development as a public use for the taking of private
property under the U.S. Constitution's Fifth Amendment.

The court ruled 5-4 that New London, Connecticut, could
take Susette Kelo's waterfront home and 14 other properties to
make way for a hotel and condominium project that would create
jobs and boost tax revenues.

Property rights advocates and many lawmakers say it gave
local governments the right to transfer any home in the United
States to a wealthy developer who promises to upgrade the

"I don't believe in giving private properties to someone
else for private use to make money off of it," said Rep. Maxine
Waters, a California Democrat and co-sponsor of the bill.


The measure gives landowners whose property is taken for a
private project the right to sue for damages in a state or
federal court for seven years following the condemnation.

A state, city or other locality found by a court to have
authorized a condemnation for private economic development
would be denied federal economic development funds for two

Many urban redevelopment projects are driven in part by
billions of dollars in federal funds such as Community
Development Block Grants, along with tax-exempt bonds issued by
local governmental authorities.

Rep. Jerrold Nadler, a New York Democrat, said the right to
sue for seven years would cast a cloud of uncertainty over many
urban redevelopment projects that would make it hard for them
to secure municipal bond financing.

He offered an amendment that would instead give owners
greater ability to halt condemnations before they took place.

But it was soundly defeated along with other proposals to
narrow the bill's scope. The bill's sponsor, Rep. James
Sensenbrenner, a Wisconsin Republican, labeled them "gutting

The House did vote to exclude from the bill redevelopment
of sites that are federally designated as having environmental
contamination problems.

The U.S. Senate is considering similar legislation.

City officials said the House measure was too broad and
would make it extremely difficult for some older communities to
pursue redevelopment.

Hartford Connecticut Mayor Eddie Perez, speaking on behalf
of the National League of Cities, said it would "create a
chilling effect on the use of eminent domain for a variety of
public purposes not specifically mentioned in this legislation
including schools, public safety facilities, and affordable