Nor shall private property be taken for public use without just compensation.
Epstein, a wonderful friend of the Freedom Museum who has now participated in four public programs with us, is admittedly outside of the intellectual mainstream when it comes to the Takings Clause. He considers private property a fundamental right and believes it has been undermined by the progressive agenda first implemented during the New Deal era. Despite the recent dominance of conservatives on the U.S. Supreme Court, the issue of private property has not been afforded the strict scrutiny applied to the First Amendment freedoms of religion and speech.
His book recounts the development of private property rights across time, and his training at Oxford in England provided him with a unique perspective of common law that runs counter to the contemporary legal paradigm concerning property rights in the United States. Underlying property rights is the ability of government to confiscate private property for public use through the process of eminent domain. The interpretation of the 12 words of the Takings Clause is the charge of Epstein's work and was the dominant theme of last evening's discussion.
He states the fundamental problem as follows: "The gap between the minimal state of the strong takings clause and the welfare state of the weak takings clause represents to this day our constitutional chasm." He begins with the concept of a physical taking, arguing that it can transcend the classic example of government purchasing private property to expand a public road or build a school.
For instance, rent controls in New York force landlords to rent units below market price. They forgo rent without a subsidy from the government, and create market disruptions in the process. For instance, landlords may lapse with upkeep minus market pressures, and new construction may be forgone due to lack of profit incentives, leading to a housing shortage or side payments undermining the system in its entirety.
He offers a four-part test, that proceeds as follows:
1. Was private property taken, either by occupation or by restrictions on use or deposition?
2. If so, was that taking justified under the police power to protect against wrongs that the property owners committed against others?
3. If not, was that taking for a public use? If not, then the consent of the owner is needed.
4. If so, was just compensation paid by the state to the owner for the full losses encouraged by the taking?
Recent controversy has focused on the meaning of "public use" in wake of the landmark Supreme Court decision Kelo v. New London. In 2005, a 5-4 majority ruled that New London, CT, had the authority under the Takings Clause to purchase Susette Kelo's Victorian home at fair market value for the purpose of private development in her neighborhood. Essentially, private property was transferred to another private interest with the local government as the intermediary. To date, Kelo struck a deal with local authorities, but the said development is still a decade a way from completion, and its specifics remain in question. Epstein contends that this is typical of many chapters of "urban renewal," where "blight" is an incredibly subjective term.
Epstein also takes issue with the interpretation of the "just compensation" element of the Takings Clause, arguing that "fair market value" is often used to "low-ball" private property owners. He suggests a premium of 10% to 20% over this sum to address the inconveniences of relocating and the subjective value an individual or family may attach to their home and/or property.
In the later chapters of his book, Epstein dives into regulatory schemes that undermine private property rights, including environmental regulation, zoning and landmark preservation, even intellectual property rights. He continually returns to his plea for heightened sensitivity to the interests of private property owners, feeling that such attention would curb the actions of an arguably insensitive and obtrusive government.
As a speaker, Epstein was brilliant as always, proving why he is known as one of the great legal minds in the country and perhaps the foremost expert in the area of property rights. The beauty of this book, and the "Inalienable Rights" series as a whole, is its ability to break down complex legal issues and present them in a manageable work to a lay audience. This reader is certainly more enlightened on the issue as a result of tackling Supreme Neglect, and last evening's program attendees were treated to an even greater exposition on the issue. The Freedom Museum and its guests are privileged to count Professor Epstein among our closest friends.