Homeowners in New London include landlords

I received a nice and prompt response from Dave Goebel, the Chief Operating Officer of the New London Development Corporation to my letter regarding the homeowners in the Kelo decision who are being made to pay court costs and attorneys' fees (note: the homeowners would likely have recovered attorneys' fees in addition to costs had they prevailed).

Mr. Goebel informs me of the following, which I think is quite interesting and shows how reporters have been misleading in making it appear this is merely about a neighborhood of long-time residents being kicked out of their homes in which they reside:

"Contrary to popular perception, quite a few of the Plaintiffs are
Landlords who do not reside in the structures. (In fact, only one individual has not rented out all or a portion of the structure in question for them, and that person may have done so for at least part of the time). For the past five years, since the properties were taken, the plaintiffs who are landlords have rented out apartments to tenants and retained the money. When the properties were taken by eminent domain the City was required to, and did, deposit with the clerk of the court the full fair market value for each property. This amounted to about $1,600,000. Each property owner had (and has) the option of taking this money out of court and, if they
consider that the amount is too low; requesting the court to increase the amount to what they think is the accurate fair market value.

"For example, the City paid $638,000 for a small apartment house owned by one of the plaintiffs. Although the highest court in the land has confirmed the City’s ownership of this property for the past five years, this plaintiff has retained more than $400,000 in rent collected from tenants during that time, while the City has continued to bear the burden of providing municipal services. (Italics mine)

"New London is a relatively small city, and many of our taxpayers
are aware of circumstances such as this. They would not necessarily
regard it as a 'punishment' if we ask the plaintiffs to account for the
us of properties paid for with taxpayers’ money. Very few cities would allow people to occupy property owned by the city for free.

"Like many aspects of this case, things are not as simple as they
first appear. We must remember that we are dealing with taxpayers'
money, while at the same time be cognizant of the circumstances of the
Plaintiffs. It is trying to balance all this that it necessary to arrive at any final decision in a reasoned manner."

After reading this, I went back to the Supreme Court decision in Kelo and was reminded of the following from the majority opinion:

"In all, the nine petitioners own 15 properties in Fort Trumbull--4 in parcel 3 of the development plan and 11 in parcel 4A. Ten of the parcels are occupied by the owner or a family member; the other five are held as investment properties."

So a third of the homes are not lived in by the owners who are suing. Also, parts of the other homes may be being used as rentals. Remember this too from the court opinion:

"The city of New London (hereinafter City) sits at the junction of the Thames River and the Long Island Sound in southeastern Connecticut. Decades of economic decline led a state agency in 1990 to designate the City a 'distressed municipality.' In 1996, the Federal Government closed the Naval Undersea Warfare Center, which had been located in the Fort Trumbull area of the City and had employed over 1,500 people. In 1998, the City's unemployment rate was nearly double that of the State, and its population of just under 24,000 residents was at its lowest since 1920." (Italics mine)

And let's recall that the definition of unemployment is when one is actively seeking work. A retired person, a student, a homemaker spouse, etc. are not considered within the definition of "unemployed."

Also, consider that, since the suit was filed at least five years ago, these landlords have had the advantage of taking and keeping rent monies throughout that time--after the legal transfer of the homes to city property through eminent domain in the year 2000. Some may say: "Make the landlords pay for the fees and costs, not the retired person who may only own his or her home and live in it." From a law perspective, such a position is neither viable nor fair. It shouldn't be about punishing business folks renting out their properties, either. It's just that we ought to have a more balanced image of who the petitioners were.

As usual, the story one hears of a lawsuit in the media is often dictated by the saaviness of the spokespeople on either side. It appears to me the Institute for Justice, which is a right wing organization that pushes the envelope for property rights the way the ACLU does for personal liberties, has better spokespeople in making us believe this is all about little old ladies kicked out of their homes to make way for the big drug company, Pfizer.

The above causes me to stand by my two posts on the Kelo decision: I would have reluctantly upheld the Connecticut Supreme Court's findings as passing constitutional muster (as in Justice Kennedy's concurring opinion). However, I have said, from a legislator's perspective, that the New London Development Corp. should have found a way to put in more park space or truly public facilities. Thus, I welcome and favor laws that will put more stringent limitations on eminent domain powers of city councils and local communities, particularly as it concerns sports stadiums and big box retailers such as WalMart.