Learning From Detroit or, Why The Road to Prosperity Is Paved With Property Rights
A must read is Ilya Somin’s commentary on Detroit and eminent domain. Somin believes that although there are many reasons for Detroit’s demises, “one that should not be ignored is the city’s extensive use of eminent domain to transfer property to politically influential private interests.”
Eminent domain abuse certainly wasn’t the only cause of Detroit’s troubles. But the city’s record is a strong argument against oft-heard claims that the use of eminent domain to transfer property to private economic interests is the key to revitalizing economically troubled cities. In addition to the immediate destruction and dislocation caused by such takings, they also tend to deter investment by undermining confidence in the security of property rights.
Somin cites his 2004 article, Overcoming Poletown: County of Wayne v. Hathcock, Economic Development Takings, and the Future of Public Use, where he criticized the 1981 Michigan Supreme Court Poletown decision, which “upheld a condemnation as a result of which 4200 people were uprooted so that General Motors could build a new factory in Detroit. Although GM and the City of Detroit promised that the new plant would create over 6000 jobs for the community, in reality the new plant employed less than half that many workers. By destroying hundreds of homes and numerous businesses, churches, and other institutions, the Poletown condemnations very likely inflicted more economic harm than they created benefits.”