Kent Delaware Land Use Issues

EMINENT DOMAIN IN DELAWARE

April 13, 2009
Leave a Comment

The Delaware Legislature recently passed an eminent domain reform bill, known as Senate Bill 7, which the Governor is expected to sign into law.
The Delaware Association of REALTORS® had proposed alternative legislation which was ignored completely by both chambers of the Legislature.
Senate Bill 7 was a response to the Kelo Decision from 2005, which allowed governments to take private property by eminent domain for economic development purposes. SB 7 exempted the Delaware Department of Transportation, and the Delaware Department of Natural Resources and Environmental Control.
The eminent domain process is terribly complicated, and SB 7 did stop the use of eminent domain, it simply stripped local governments of their ability to use urban renewal planning as a tool to control blight.
The City of Wilmington, Delaware, alternatively, has what is known as the South Walnut Street Urban Renewal Plan. This plan is basically what it says, and is an important planning tool for local governments. It does allow for condemnation, however. And a few property owners within the South Walnut Street Plan district objected strenuously to City’s option of using eminent domain to acquire their
properties.

ECONOMIC DEVELOPMENT VERSUS URBAN RENEWAL

It’s fair to say that no one wants government to be able to take their private property. We don’t like it, but we tolerate it for roads and other public use projects. But for economic development, eminent domain is a bitter pill to swallow because people simply do not understand how – and why – government can take private property.
However, denying government totally the opportunity for redevelopment restricts unfairly a community’s ability to complete important renewal projects.
The Delaware Association of REALTORS® has consistently opposed private property takings in cases of the government taking one person’s property in order to provide an economic benefit to another. Despite the notion that progress marches on, enrichment of others at the expense of a disadvantaged property owner cannot be condoned. However distasteful, eminent domain may be necessary in certain limited circumstances.
DAR is committed to strong neighborhoods and strong communities for the health and safety of our neighbors, for the preservation of vibrant public schools, and for the stability of quality government services. Neighborhoods which are permitted to decay in blight and become slums reduce property values, diminish property tax revenues, and reduce the quality of government services, of our public education system, and the health of our neighbors. In fact, decaying neighborhoods put the safety of our police and firefighters at risk.
DAR believes the community has the right to govern itself through the tools provided in the local land use planning process. Urban Renewal Projects have existed around the country for decades, if not centuries. A local government aiding in the transition of blighted neighborhoods into thriving, vibrant communities, even using eminent domain as a tool of last resort, is simply necessary for the benefit of all of the citizens of the larger community.
THE PUBLIC USE VERSUS ECONOMIC DEVELOPMENT

Senate Bill 7 was very widely debated as it prohibits government from taking private property by eminent domain except for the “public use,” which is defined as streets, bridges, schools, police and fire departments, and other similar uses. The intention of the legislation is to prohibit developers from profiting at the expense of unsuspecting, unlucky citizens whose property lies in the way of shiny new developments.
Additionally, Senate Bill 7 defined what is not the “public use,” which includes projects that increase the property tax assessment base, or adds employment or wages or wage taxes, and other similar economic benefits to the community.
The legislation casts a wide net, however, and is so extreme as to cause unintended consequences which will ultimately challenge the ability of our local communities to govern themselves, and to provide safe neighborhoods with strong property values allowing quality services.
Senate Bill 7 exempts DelDOT and DNREC, so government still has the ability to take private property for the public use, such as roads, bridges, utility transmission lines, contaminated properties, and other such uses. I believe many would agree that, while individual property rights must be protected, they must not trump the right of the community to transportation, to utilities, and to other public uses, such as parks and open space.
The Delaware Association of REALTORS® believes Senate Bill 7 goes too far promoting community interests, while not doing nearly enough to protect citizens’ property rights. We noted that the way SB 7 is written, some public use projects could be defeated if they add to the tax base, or if they add employees, or if they add to wage taxes. Very confusing, and a court decision will be forthcoming.
DAR had an alternative to Senate Bill 7 which will bring fairness and consistency to the eminent domain process, and will provide citizens substantial protections when their private property is to be condemned for urban renewal projects. Further, our proposal provides private citizens truly just compensation when their properties are condemned.
The eminent domain process is complicated, and the DAR proposal is no less so. While Senate Bill 7 is generally considered the easy correction, we believe it is impossible to repair a complicated problem easily; and by trying to enact a simple fix to this complicated problem, Senate Bill 7 gives too much scope to eminent domain without adequate safeguards for citizens’ rights.

NECESSARY COMPROMISE BENEFITS ALL PARTIES

The Delaware Association of REALTOR’S® proposal, which we view as a compromise, clarifies and narrows the definition of blight to ensure that only property that poses a real risk to public health, safety or welfare can be declared blighted and subject to taking by eminent domain.
We note from “The City of Wilmington South Walnut Street Urban Renewal Plan” website, “The City…is proposing revisions to the South Walnut Street Urban Renewal Plan. The revisions are intended to reduce blight, eliminate environmental hazards and allow for coordinated development of land in South Wilmington.”
We think the entire community should voice its opinion about what happens within the municipal boundaries. If an urban renewal project strengthens the entire community, then the urban renewal project has validity. It was described to me as, “For the greater good.”
Our proposal, which we view as a boost to private property rights, increases substantive and procedural protections for citizens by requiring in – depth land use planning prior to condemnation, by adding additional requirements to the current four – step redevelopment planning process, and by requiring a demonstration of a specific public need for the urban renewal project. We propose a number of steps in the planning and approval process which invites the participation of the community in self – governance.
Our proposal, which we view as a boost to the health and safety of the community, requires the local planning commissions and the city and county councils to hold public hearings on the land use plan, and further that each approves the plan by a two – thirds majority, and that the local government make parcel – by – parcel “blight” findings after public notice and public hearings.
Our proposal, which we view as a boost to the legal rights of the community, would provide meaningful opportunities to challenge a proposed condemnation requiring that the local government engage in “reasonable attempts to negotiate” with property owners prior to initiating a condemnation action, and further providing for judicial review of key decision points by allowing for an appeal of any governmental action taken during the plan approval process. Our proposal goes so far as to eliminate judicial deference to local legislative body findings, requiring that all governmental decisions are supported by substantial evidence, and placing the burden of proof on the government.
Our proposal, which we view as a boost to the economic well – being of individual private property owners, provides for truly just compensation including paying for relocation expenses, paying reasonable litigation expenses when challenging a condemnation action in court, a reasonable percentage of the increase in the value of the property resulting from its inclusion in the proposed renewal area, and paying any anticipated lost business revenue resulting from relocation.
While no legislation could ever successfully prohibit the government from seizing private property, Senate Bill 7 does not afford the protections, benefits, and just compensation that the Delaware Association of REALTOR’S® proposal does. And while DAR does not condone the taking of private property for solely for economic development purposes, the DAR proposal recognizes that the local community must be afforded the opportunity for self – governance, that the local government must be afforded the tools necessary to provide the highest level of services, the greatest quality of opportunity, and the strongest community it possibly can, and that private property owners are entitled to the full economic benefit of their properties if they must give way.

EMINENT DOMAIN SHALL CONTINUE TO BE AN ISSUE

It is obvious to me that the debate concerning eminent domain is not over. While state agencies can continue to use eminent domain for the public use, economic development interests continue to be served. If DelDOT needs a certain kind of entrance for an approved development, whether residential, commercial, or whatever, eminent domain is the answer to acquire additional right-of-way.
The Wilmington News Journal reported a story on Friday, April 10, 2009, entitled, “Eminent Domain Law Leaves Loophole.” This story describes a land owner whose land is not being taken be developers for economic development, but rather his land is being taken by DelDOT for the highway entrance for the development.
Eminent domain is a very complicated issue. The Legislature tried top make the quick fix, and only fixed part of the problem.
In fact, Senate Bill 7 may very well have created more problems than it solved.
The Delaware Association of REALTORS® will continue to work with the Legislature to improve individual private property rights, whether or not the issue is eminent domain. And DAR will continue to push legislation that reforms eminent domain in the proper way.


Posted in Uncategorized

Kent County Delaware Residential Development Moratorium

January 20, 2007
1 Comment

The Kent County, Delaware, Levy Court, or county council, has imposed a moratorium prohibiting residential subdivision applications for nine months commencing immediately on January 16, 2007.

This moratorium, according to Levy Court President Brooks Banta, is designed to give the Planning Department time to update Kent County’s Comprehensive Land Use Plan, due this year in the current five – year cycle required by the State of Delaware.

Levy Court held no public hearings on the moratorium, and is assuming that new commissioners elected in 2006 were mandated by the voters to do something to curb residential development. Of course, market conditions have already slowed development, as prices are no longer increasing at the rate they were six to 12 months ago, listings are on the market longer by 30 to 45 days, and the absorption rate of new building lots is approximately 50 percent of last year’s rate.

The Levy Court has imposed a number of impact fees and transfer taxes on development recently, and this moratorium contradicts the goals of these fees and taxes. The local fire departments are earning impact fees on new building permits, essentially new construction permits, and will see that revenue diminish not immediately, but a year from now.

Transfer tax revenues dedicated to Emergency Services such as 911 call centers, ambulance services, and other related services, likewise will see their revenue dip later, as the effects of the moratorium become evident.

Moratoriums are bad land use policy because the effects ripple in numerous ways throughout the economy. As new construction essentially stops, or at the minimum slows down, tradesmen such as electricians, plumbers, carpenters, roofers, and many others are without work.

The most difficult result of moratoriums will be the effect on our public schools. The local portion of the property tax for school district revenue will be frozen as no new development is added to the assessment base. In this uneven economy, with prices going up for energy costs, with uneasy expectations for interest rates based on uncertainty relative to inflation and Federal Reserve Board policy, and the real estate market floundering at best, Levy Court might well have caused the Kent County real estate market more harm than intended.

The issue more serious than a moratorium imposed by a group of people without the proper expertise, is the way it was imposed. Government without public input is a serious breach of the public trust.

Admittedly, there are a number of people in Kent County happy about the moratorium. These folks have nothing at stake in the real estate business, such as employment. But numerous other people have much at stake.

But government has imposed it’s will without public input, and the repercussions are serious. What is next? Changes to the zoning ordinance, or subdivision ordinance, or even the updated comprehensive plan without public hearings? If Levy Court is in fact attempting to protect the public, then a public hearing would support the moratorium decision.

The refusal to host a public hearing gives the appearance that Levy Court is afraid of the public opinion.Levy Court IMposes Residential Development Moratorium


About author

A REALTOR for 26 years, Phil McGinnis has been involved in the politics of land use for over 20 years. McGinnis has professional designations in Commercial-Investment (CCIM), Appraisal (GAA), eE-Commerce (e-PRO), and others, lives and works in Kent County, Delaware, and is an active member in the Delaware and National Association of REALTORS, as well as his community.

Search

Navigation

Categories:

Links:

Archives:

Feeds