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Anthony Flint
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IN FUROR OVER EMINENT DOMAIN, AN ALTERNATIVE PROCESS
Land readjustment substitutes takings with a stake in redevelopment projects
CAMBRIDGE, Mass. – In the aftermath of the U.S. Supreme Court’s Kelo v. New London ruling in 2005, the use of eminent domain for economic development projects has been drastically restricted by state Legislatures or through citizen ballot initiatives. The backlash against eminent domain is fueled by issues of fairness and the reach of government participation in private development. And yet planners, particularly in downtown and urban redevelopment environments, say that assembling land using eminent domain is a critical tool.
There is a third way, according to Yu-Hung Hong, fellow at the Lincoln Institute of Land Policy and co-editor, with Barrie Needham, of the new Lincoln Institute book, Analyzing Land Readjustment: Economics, Law, and Collective Action (2007 / 224 pages / Paper / $25.00 / ISBN-13: 978-1-55844-164-4). The alternative approach of land readjustment involves assembling a large redevelopment parcel by giving property owners a stake in the redevelopment project. This approach has been widely practiced in many countries, such as France, Germany, Israel, Japan, The Netherland, South Korea, and Taiwan.
“Land readjustment gives all affected property owners the power, by majority vote, to approve or disapprove the transfer of land rights to a self-governing body for redevelopment,” Hong said. “Instead of buying out all existing property owners or using eminent domain, the land readjustment organizer invites property owners to become stakeholders and to contribute their real assets to the project as investment capital. In return, the organizer promises to give each owner a land site (or an apartment or store) of at least equal value in the vicinity of the original site, upon the completion of the redevelopment.”
In theory, this method does not require the agency to have substantial up-front capital for buying out existing owners or government assistance to acquire land, Hong noted.
Analyzing Land Readjustment shows how conventional land-assembly methods – such as voluntary exchange and eminent domain -- have at best produced suboptimal outcomes in terms of efficiency and equity and at worst thwarted urban revitalization initiatives, and how innovations in land assembly around the world have successfully implemented land-for-land, or property rights, exchanges.
The book includes case studies from Germany, Japan, The Netherlands, and Israel, and also explores the potential for urban redevelopment in China and the United States. A chapter on fragmented ownership and redevelopment in New York City is included by Lynne B. Sagalyn, professor of Real Estate Development and Planning at the University of Pennsylvania, and author of Times Square Roulette: Remaking the City Icon (MIT Press).
“Training in the basic principles of land readjustment should be part of the education of every city planner, real estate development professional, and other individuals engaged in making policy for land and urban development,” writes William A. Doebele, professor of planning and urban design emeritus at Harvard University’s Graduate School of Design, in a foreword. “As a text and reference, this volume will contribute to more informed and wider applications of land readjustment in complex situations that require solutions more efficient and equitable than those provided by any other instrument now available.”
The Lincoln Institute is continuing its extensive research and analysis on the subject of property rights, and is hosting some two-dozen journalists in April 2007 for a conference on growth, regulation, eminent domain and regulatory takings. To interview Yu-Hung Hong on land assembly methods that are alternatives to eminent domain, contact anthony.flint@lincolninst.edu
About the Editors:
Yu-Hung Hong, fellow at the Lincoln Institute and visiting assistant professor at the Massachusetts Institute of Technology, is engaged in research and teaching on utilizing land as a public revenue source, with a focus on institutional development of property taxation, public leasehold systems, and land readjustment.
Barrie Needham, professor at the University of Nijmegen in The Netherlands, has research interests in the interaction between real estate and spatial planning. His work includes land policy, property development, property rights, and their effect on planning processes and on the form and quality of the manmade environment.
About the Lincoln Institute of Land Policy: The Lincoln Institute of Land Policy, a think tank in Cambridge, Mass., sponsors research, training, conferences and demonstration projects on land use, urban planning and tax policy as it relates to land. The Web site is www.lincolninst.edu. The 2007 catalog of all Lincoln Institute publications is at http://www.lincolninst.edu/pubs/PubDetail.aspx?pubid=1216.
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