Redevelopment Agencies and Eminent Domain: Well-Reasoned Article Misses Part of the Picture

Over the weekend, Chlorinated Liberty posted a pretty good article that articulates the primary reasons people cite as the basis for abolishing redevelopment agencies.  The article, "How Eliminating California's Redevelopment Agencies Spurs Economic Growth," takes a reasoned approach to why the free market is better equipped to handle redevelopment and blight remediation than the government - and its redevelopment agencies. 

The article walks through some statistics that show that many of California's redevelopment agencies did not report any job creation generated by their projects over a multi-year period.  It talks about allegations of corruption, mismanagement, and failed projects.  It even cites data showing that strong private property rights are a key component of private investment, concluding

private property is necessary for economic growth and to achieve prosperity. Government infringement through redevelopment's use of eminent domain powers undermines private property rights in California. This distorts incentives, discourages the use of assets as collateral, and forfeits the benefits of capitalism. By eliminating redevelopment and the use of eminent domain, municipal leaders will witness the economic growth they so desperately desire.

I actually agree with much of what the article says, but it only glosses over the other side of the coin - and it's an important other side.  Before starting down the path towards articulating why we should abolish redevelopment agencies, the article concedes:

Places such as Pasadena's Old Town, Stockton's water front plaza and San Diego's Gaslamp Quarter have rightfully been touted as models of success.

The article then glosses over these to pursue its anti-redevelopment agenda.  But what about these "models of success"?  Without redevelopment agencies - and, yes, the use of eminent domain - what would have become of these areas and others like them throughout the state?

I'm all for allowing the free market to address redevelopment where possible, and I agree that the government's involvement may hinder, rather than facilitate, timely growth.  On the other hand, I believe that there are places where the market cannot, or will not, react to situations in desperate need of redevelopment.  Where that occurs, government involvement can turn miserable, blighted areas into vibrant communities.  And to do this, the government sometimes needs to use eminent domain to assemble the necessary property to make these redevelopment projects feasible.

In the end, I think the Chlorinated Liberty article serves to highlight just how complicated this issue is.  Both sides of the debate have good points to make, and no solution will be perfect.  Ultimately, a solution that provides greater oversight of the redevelopment process - generating more "models of success" and fewer corruption scandals - probably makes sense. 

But if the "solution" goes so far as to abolish redevelopment agencies (as Governor Brown proposes) or to eliminate their eminent domain powers, I imagine we'll all look back many years later and wonder why some of California's worst areas still have seen no viable market-driven redevelopment. 

  • Rick E. Rayl
    Partner

    Rick Rayl is an experienced litigator on a broad range of complex civil litigation issues.  His practice is concentrated primarily on eminent domain, inverse condemnation, and other real-estate-valuation disputes.  His public ...

California Eminent Domain Report is a one-stop resource for everything new and noteworthy in eminent domain in California. We cover all aspects of eminent domain in California, including condemnation, inverse condemnation, and regulatory takings. We also keep track of current cases, project announcements, budget issues, legislative reform efforts, and report on all major California eminent domain conferences and seminars.

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