This property is condemned … some day

A big takings case reported by North Carolina Lawyers Weekly has all the ingredients to pit property-rights advocates against an arrogant government agency willing to send certain property owners into decades of limbo for its own convenience.

Ever since the U.S. Supreme Court’s 2005 ruling in Kelo v. City of New London, which expanded the powers of eminent domain, a backlash from property owners has prompted 40 states and the federal government to pass laws curbing the practice. Despite this trend, the law now in the spotlight in North Carolina shows how pervasive eminent domain powers became before Kelo and how persistent they remain.

In the recent matter, you have the innocent owners of 2,400 parcels that lie in the path of a proposed new state highway. And you have North Carolina’s Department of Transportation, empowered to order those property owners not to improve their property.

Why not? Because the property is on a map the DOT has filed, with its intent to build a road, in some unspecified future year, on land where there are currently private homes and commercial property.

The NCDOT’s ultimate aim is to build a road at the lowest practical cost. Any improvement to that land will have to be reflected in the price paid to the landowner after it is condemned. The question is: How long is the property owner expected to hold on to an unimproved parcel before the state pays him or her for it?

In Winston-Salem, some homeowners have been waiting since 1997, with no actual construction in sight and thus no offer from the DOT to condemn the property and pay off the property owners. Everything, including the owners’ ability to improve or sell their property, has been on hold and could remain on hold for another decade or longer.

As NCLW reporter Sharon McCloskey writes:

North Carolina’s Map Act permits the DOT to file a map with the local register of deeds identifying property where it anticipates putting a road and, with that, protect all property along the corridor from development or any other action that might improve the value of the property — in effect, holding down the purchase price until the DOT is ready to buy.

DOT admits as much. In a fact sheet distributed to affected property owners, DOT lists a number of frequently asked questions, among them, “How long can a property be in the ‘protected corridor’?” The answer: “For as long as it takes North Carolina to get enough money to build the road.”

The story quotes Matthew Bryant, an attorney with Hendrick Law Firm in Winston-Salem, who claims that the open-ended time frame is what makes the Map Act unconstitutional. “You can’t tie pieces of property up for the express purpose of denuding them of any marketability or any use,” he said.

Two legal scholars who specialize in property rights and takings, Ilya Shapiro of the Cato Institute and Ilya Somin of George Mason University School of Law, both say that, at first blush, what North Carolina is doing appears constitutionally suspect.

“It’s definitely a takings issue, a regulatory taking. The state is clearly diminishing the value of private property without just compensation,” said Shapiro.

Somin agreed but said he believed the stronger legal matter here involves “the substantive due process question. There is not a legitimate government interest to suppress development merely so it would make the property cheaper if they condemn it later. You might get judges to say it’s fishy.”

According to North Carolina-based attorney Stephanie Autry, a partner at Cranfill, Sumner & Hartzog, who has litigated Map Act cases, some 15 or 20 other states have similar laws on the books.

“But North Carolina has been using the Map Act very liberally in terms of the numbers of corridors it protects and the lengths of time it protects them,” Autry said.

In Florida, for instance, there is a similar statute empowering the state to file a Map of Reservations. However, according to attorney Andrew Brigham of the Brigham Property Rights Law Firm, after a pair of Florida Supreme Court decisions invalidated the law as unconstitutional and allowed affected property owners to sue for damages, the state’s Department of Transportation withdrew its Maps of Reservation and began acting under laws that permitted acquisitions of property needed for highways and transit projects before detailed plans are drawn.

“The Map of Reservation amounted to an overzealous government desirous of avoiding acquisition costs,” Brigham said. “After the court’s ruling, DOT found it not to be practical. Advance acquisition is an equilibrium that protects property owners.”

In North Carolina, Bryant has filed a class action on behalf of homeowners along the proposed route for the eastern loop of the Northern Beltway. Among their complaints is that the state has been arbitrary in agreeing to buy some 300 properties on the proposed route, using a nebulous hardship standard that few can meet and that doesn’t cover more quotidian reasons why a property owner might want to sell his or her home.

For example, Paula Smith, cited in the NCLW article, says she is unable to sell the house she and her husband purchased years ago when they were raising their children. Now her children are leaving the nest. “My husband and I are both over 50 and going up and down stairs is going to become a chore. This is something that we’d like to get out from under, but we’re stuck,” she said.

Bryant added:

“To be bought, some people are turning over their tax returns, their dunning letters from collection agencies, their medical records to some staff person over at the right-of-way office. And to think that that’s the appropriate way to make our citizens get their constitutional rights — that’s offensive.”

And yet the Vienna Baptist Church was able to score a buyout, at $1.6 million, which raised eyebrows in Winston-Salem.

The North Carolina DOT declined to comment on the Lawyers Weekly story. At this time, Bryant’s class action is on appeal, having been rejected by a Superior Court judge on the grounds that the takings allegations might not be common to a class.

Somin frequently writes on property rights issues for The Volokh Conspiracy, an influential group blog which has mostly law professors as members. Wikipedia describes the blog as covering legal and political issues “generally from a libertarian or conservative perspective.”

It is easy to imagine the NCDOT and the state’s Map Act gaining greater currency among the conservative legal community if Somin decides to blog about it, which he said he was considering doing.

JOHN STODDER is roving Web editor for The Dolan Company, which owns The Mecklenburg Times. North Carolina Lawyers Weekly is a sister publication to The Mecklenburg Times.