This second blog post of the two-part series features just a few
of the tools of inclusionary eminent domain that can be retrofitted
for purposes of constructing or preserving affordable housing on
land condemned for economic development, or new development
projects generally. The tools are interrelated and have the ability
to operate in tandem to temper and reconcile the interests of
various stakeholders.
Community Benefits Agreements (CBAs) are
private, legally binding contracts between private developers,
municipalities and various community representatives setting forth
a range of benefits to be included in a development project. CBAs
also help obtain the cooperation and participation of community
organizations that might otherwise object to condemnation for
development, or new development generally. For developers, a
promise of support is important because it helps negotiate state
subsidies and maintain good public relations. In most cases, the
community carves out a list of benefits and negotiates the demands
with the developer and municipality. Often times, a demand for a
percentage of affordable housing is at the heart of the CBA. Some
CBAs have been drafted in response to condemnation proceedings to
ensure affordable housing is constructed on the new development
site. The developer and municipality – in collaboration with
the affected community – promise, among other things, to
construct affordable housing within the development project to
replace some the housing stock that may be reduced by
condemnation.
Community Development Corporations
(CDCs) are nonprofit entities that seek to improve
economically depressed neighborhoods with, among other things,
affordable housing to recreate the social fabric of distressed
areas. The CDC board is usually elected by residents and empowers
the board members to represent the interests of those living in a
neighborhood. CDCs have played significant roles in collaborating
with municipalities where eminent domain takings have threatened to
raze affordable housing. In fact, CDCs are frequently one of many
community representatives who sign onto a CBA. Significantly, the
production of affordable housing in economic development projects
may be more transparent with a local CDC involved in the
post-condemnation development process.
Community Land Trusts (CLTs) are modeled
on a landowner and property ownership scheme. The title to the land
that sits underneath the property is held by the CLT, which retains
ownership of the land and then leases the use of the property, such
as an affordable housing development, to low- and moderate- income
tenants or homeowners. To preserve affordability, the ground lease
includes resale price restrictions. In some programs, the
municipality runs the CLT. The CLT scheme, in the context of
eminent domain takings for economic development, may help ensure
preservation of affordable housing if the boundary of a CLT is
designated and established within the development area prior to,
during or after condemnation.
Neighborhood Improvement Districts
(NIDs) are local governance and group property models
enabled by state legislation designed to supplement, but not
supplant, traditional municipal functions. After official
authorization by the local City Council, a boundary is drawn that
encapsulates the area of the neighborhood serviced by the NID.
Commercial or residential property located within the NID boundary
are assessed a fee that finances for economic development and a
variety of other benefits such as street cleaning, managing parking
lots, private security and other safety measures within a
neighborhood. Further, some NIDs have expanded powers of zoning,
land use planning and other authority in tandem with the local
municipality. The governing body of the NID is created by group
representatives from the community – called the neighborhood
improvement district management association (NIDMA) – that
levies the assessments on property owners and makes other decisions
concerning the improvements of the neighborhood. Often times,
however, the local CDC located within the NID is designated as the
NIDMA. Significantly, the NID may also generate substantial
economic activity that could spur affordable housing development by
the issuance of bonds and other forms of monies, including the
authority to appropriate and expend federal, state or municipal
funds received by the NIDMA. Significantly, to preserve or
construct affordable housing, a portion of the land condemned for
economic development could be designated as a NID. This is an
attractive tool for private developers and municipalities seeking
to constructively invest in and construct affordable housing
developments for low- and moderate- income neighborhoods and foster
a working relationship with residents.
The model of development discussed in this blog series is an
evolving paradigm in takings law. Inclusionary eminent domain is,
in essence, an acknowledgment of the realization that a meticulous
focus on the meaning of "public use" – in the most
local community sense – is an integral part of the exercise
of takings for economic development. The tools have been packaged
into this new inclusionary framework to guide municipalities,
private developers and communities help construct to preserve
affordable housing developments.
For a comprehensive read on the concept of
"inclusionary eminent domain" and its practical
toolkit, download the recently published law review article at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2238898
Citation: Gerald S. Dickinson, Inclusionary Eminent Domain, 45
LOY. U. CHI. L.J. 845 (2014).
This article is presented for informational purposes only and is not intended to constitute legal advice.
