What motivates voters’ support for eminent domain reform: Ownership, vulnerability, or ideology?

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Highlights

  • Eminent domain powers in the United States are dynamic, with periods of expansion followed by backlash and reform.

  • Property ownership and other factors are tested as motivations for voter backlash and eminent domain reform.

  • Property ownership, income, economic vulnerability and ideology have significant impacts on voters support for reform.

  • Ethnic and educational factors have no stable and statistically significant effects on reform outcomes.

  • High-income voters may support reform to protect the option of holding secure private property in the future.

Abstract

The analysis evaluates factors that motivate voter support for eminent domain reform. Economic models emphasize property ownership as a motivation for eminent domain restrictions (Fleck and Hanssen, 2010, Lamoreaux, 2011). Other research and court opinions point to ideology and vulnerability to takings as motivations for eminent domain reform. The empirical analysis tests these hypotheses using data from state-level referenda that responded to the Supreme Court decision in Kelo v. New London. Property ownership, income, economic vulnerability and ideology have significant impacts on the odds of voting in favor of reform. Ethnic and educational factors do not have significant effects on reform outcomes.

Introduction

The U.S. Supreme Court held in Kelo v. New London (Kelo) that the Constitution does not prohibit eminent domain takings on behalf of private interests as long as there is an expected public benefit, such as employment, tax revenue or economic development (U.S Supreme Court, 2005). While the decision was unsurprising to legal scholars, the response of the public was immediate, vigorous and negative. Polls showed that more than 80% of the public disagreed with the decision of the Court (Nadler & Diamond, 2008). Thirty-seven state legislatures responded to public concerns with bills to restrict eminent domain takings and define just compensation. In 23 states, legislatures passed the proposed reforms into law (Lopez, Jewell, & Campbell, 2009). Reform proposals were placed before voters in 12 states and voted into law in 10 states, all in less than four years after the Kelo decision.

Fleck and Hanssen (2010) place the Kelo backlash in the latest of five historical cycles of expansion and contraction of eminent domain powers in the U.S. Cycles begin with the delegation and expansion of eminent domain powers and end in restrictive reforms that respond to perceived abuses. Over time, the benefits of expansive eminent domain powers decline and the costs rise, leading to a backlash of reform and eminent domain restrictions. The mystery is the source of the backlash. In contrast to the legal histories of other countries, the U.S. seems unique in these cyclical periods of eminent domain abuse, backlash, reform and restriction (Lamoreaux, 2011).

Lamoreaux believes that widespread property ownership in the U.S. solves the mystery. Widespread ownership is a political barrier to eminent domain excesses. Given an initial technological or social change, expansive eminent domain powers result in benefits to the general public and the typically property owner. As these expanded powers are exercised over time, their benefits diminish and their costs rise. Generalized benefits eventually become generalized costs. Property owners and their representatives take political action to restrict eminent domain once it becomes a general threat rather than a general benefit. Governments respond with reforms and restrictions (Lamoreaux, 2011).

The backlash by property owners makes U.S. property rights flexible to technological and economic change, but also dynamically stable. Indeed, research indicates that government decisions are especially sensitive to the political pressure of homeowners (Fischel, 2005). U.S. property rights can adapt to broadly beneficial social and technological changes while maintaining, over time, a high degree of security for property owners. Widespread property ownership resolves the U.S. “mystery of property rights” (Lamoreaux, 2011, p. 275).

Though a compelling hypothesis, empirical evidence for property ownership as a stabilizing influence is mixed and indirect. Kerekes (2011) examines the state-level factors that influence a type of eminent domain action that is sometimes seen as excessive – takings initiated by governments for purposes of transferring property from one private party to another private party. Kerekes calls these takings “for private benefit” (p. 202).1 Kerekes finds that states with elected state supreme courts are correlated with less frequent takings for private benefit. This result may indicate that elected courts are more likely to defer to voter concerns and restrict takings when they stray outside the domain of actual public use. However, Kerekes also finds that takings for private benefit increase with the percentage of owner-occupied housing, a finding inconsistent with the idea that property owners offer greater resistance to excessive use of eminent domain compared to non-owners and renters. Whether the latter finding is actually a inconsistent is not entirely clear since it may be that the Kerekes’ 1998–2002 data may describe a midpoint in the eminent domain cycle where voters have not yet responded to eminent domain excesses with a political backlash.

Two studies examine legislative restrictions on eminent domain subsequent to the Kelo decision. Lopez et al. (2009) finds that enactment of eminent domain restrictions is positively correlated with newspaper coverage of takings, housing values and the number of local governments per capita. In terms of the ownership hypothesis, newspaper coverage may be correlated with voter awareness of takings and housing values may measure the economic size of an ownership interest. However, the evidence is indirect since the dependent variable is legislative activity, not voter behavior. Sharp and Haider-Markel (2008) find that legislative approval of eminent domain restrictions is positively correlated with the number of takings, the concurrent presence of a voter-initiated reform initiative and the dominance of a pro-property rights ideology in a state. Legislated restrictions are negatively correlated with the public redevelopment spending and legislative lobbying by pro-redevelopment local governments. Consistent with the backlash model, Sharp and Haider-Markel conclude that eminent domain reform is a reaction “to a history of…controversial eminent domain takings…” (2008, p. 569).

This analysis evaluates factors that motivate voter support for eminent domain reform. Economic models emphasize property ownership as a motivation for eminent domain restrictions (Fleck and Hanssen, 2010, Lamoreaux, 2011). Other research and court opinions suggest that ideology and vulnerability to takings motivate public support for eminent domain reform. The empirical analysis tests these hypotheses using data from state-level referenda that responded to the Supreme Court decision in Kelo v. New London. Property ownership, income, economic vulnerability and ideology have significant impacts on the odds of voting in favor of reform. Ethnic and educational factors do not have significant effects on reform outcomes.

Section snippets

The Kelo decision and public response

The Kelo petitioners sought relief from an eminent domain taking by the city of New London, Connecticut. The city designed a redevelopment plan, purchased properties required for the project and initiated eminent domain proceedings to take properties from owners unwilling to sell voluntarily. The redevelopment plan was intended to create jobs, generate new tax revenue, and help revitalize the economic base. The nine Kelo petitioners believed that the proposed takings violated the public use

The voter choice model

This section models voter behavior and develops hypotheses about the factors that influence election outcomes. Data for the empirical analysis are county-level voting outcomes for the states that considered eminent domain reforms. The model of county-level voting outcomes is based on Deacon and Shapiro (1975) that builds on the behavior of individual voters. The Deacon and Shapiro model is a single equation description of both turnout and voting. Votes are registered when voters turn out to

Hypotheses

This section develops four hypotheses about the factors that motivate voters to turn out and vote for eminent domain reform. The hypotheses are given in conceptual form and then specified in terms of specific variables available from secondary sources. The analysis uses more than one variable to represent a hypothesis when (a) there multiple empirical dimensions of the concept and (b) there are multiple variables available to measure one of these dimensions.

The first hypothesis is that support

Data

Table 2 describes the variables used in the regression analysis and their descriptive statistics. The units of observation are the 593 counties voting on the 10 state referenda that offered pure eminent domain reforms. Data for the 4 referenda that mixed eminent domain reform with other issues are not included in the analysis since the voter decisions on these mixed referenda were markedly different than those for the referenda focused on eminent domain reform.6

Results

Table 4 lists the regression coefficients and estimation statistics for the regressions with Log-odds as the dependent variable. The first column lists the independent variables. The coefficients for the alternative models are listed in the remaining columns. The log-odds models and z-score form of the independent variables means that the estimated coefficients measure the rate of change in the odds of approval for one standard deviation changes in the independent variables. Multiplying a

Conclusions

Election outcomes for eminent domain reform are consistent with legislative activity and opinion polls taken shortly after the Kelo decision. Voters strongly support eminent domain reform to limit takings. Reform referenda face very favorable odds when they focus narrowly on eminent domain reform. The pluralities of passing such reform proposals ranged from 54.8% in Louisiana to 85.7% in New Hampshire across the 10 states where pure eminent domain reform measures were offered to voters.

The

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