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August 9, 2005

NoLandGrab: Can real estate speculation be a public use?

The Puget Sound situation and the Metropolitan Atlanta Rapid Transit Authority (MARTA) case in the 1980's are both instances where the municipality, and therefore the "public," profited from the rise in real estate prices. In Puget Sound, perhaps the result was unintended, but in Atlanta, the purpose of taking additional property was to fully realize the financial benefit of rising property values where commuters would gain access to public transportation.

Since the Supreme Court upheld the expanded the definition of "public use" to include public benefit or public purpose, what is to stop a municipality from seizing private property for the purpose of real estate speculation in order to raise money for the public?

You are thinking, "that would be absurd." However, according to the syndicated columnist Paul Craig Roberts:

"MARTA was one of the first to condemn more property than it needed to serve "public purpose." The transit authority reasoned that property surrounding a new transportation station would rise in value because of the increased ease of commuting from the site. The authority decided that since its station caused the rise in property values, it should benefit by condemning property for resale after value rose. People with condemned property blocks from the new stations sued and lost."

Though these projects were technically supposed to be for transportation infrastructure, long considered to be a fair "public use," no one can deny that real estate speculation

Posted by lumi at August 9, 2005 12:11 PM