AuthorsDen.com   Join (Free!) | Login  

     Popular! Books, Stories, Articles, Poetry
   Services MarketPlace (Free to post!)
Where Authors and Readers come together!

SIGNED BOOKS    AUTHORS    eBOOKS new!     BOOKS    STORIES    ARTICLES    POETRY    BLOGS    NEWS    EVENTS    VIDEOS    GOLD    SUCCESS    TESTIMONIALS

Featured Authors:  Dilip Dahanukar, iWilliam Lowenkamp, iJohn MacEachern, iAmy Sellers, iMichael Wayne, iNordette Adams, iJennifer Miller, i

  Home > Business/Investing > Articles Popular: Books, Stories, Articles, Poetry     

Wallace Kaufman

· Become a Fan
· Contact me
· Books
· Articles
· Poetry
· 8 Titles
· Save to My Library
· Share with Friends!
·
Member Since: May, 2009

Wallace Kaufman, click here to update your pages on AuthorsDen.




Featured Book
Sons of the Sphinx
by Cheryl Carpinello

When 15-year-old Rosa agrees to help the ghost of King Tut find his lost queen Hesena, she doesn't count on falling for him. And these two teenagers, 3,000 years apart, m..  
BookAds by Silver
Gold and Platinum Members


Featured Book
Trade Secret
by TJ Perkins

Book 3 of the Kim & Kelly Mystery Series - Trade Secret. A trip to Egypt turns out to be more dangerous than expected when the young sleuths encounter a most cunning cat ..  
BookAds by Silver
Gold and Platinum Members





   Recent articles by
Wallace Kaufman

A Constructive Solution to the Housing Crisis
Romancing Nature: 3 Reviews
NATURE WITHOUT BALANCE: DANIEL BOTKIN ON ECOLOGY
Save the Kompot
           >> View all

How Fair Is Market Value? The Flaws in Eminent Domain
By Wallace Kaufman   
Rated "G" by the Author.
Last edited: Tuesday, December 06, 2011
Posted: Tuesday, December 06, 2011

Share    Print   Save    Become a Fan


When government took homes to give to a private developer in Connecticut it had to pay "just compensation." This chapter from a book on the Kelo case demonstrates that compensation is seldom just or fair.

HOW FAIR IS MARKET VALUE: An Appraiser’s Report of Temptations, Deficiencies and Distortions in the Condemnation Process By Wallace Kaufman INTRODUCTION Eminent domain and its legal procedures have been part of government for at least two thousand years. Taking the power away from government is no more possible than doing away with government itself. Government’s dominium eminens, supreme lordship, shall always be with us, like the poor. We have the first recorded instance about 870 B.C. when Jezebel uses Phoenician law to acquire Naboth’s vineyard for Ahab.(1 Kings 21) Eminent domain’s excuse for being will always be making us, as a community, richer. The accompanying requirement to pay just compensation to the dispossessed is supposed to prevent anyone who must surrender property to enlarge the public domain from becoming poorer. Prevailing wisdom, however, perceives that when the lord exercises his power to take, the citizen whose property is taken becomes poorer. My intent is to dispute this conventional wisdom that the dispossessed always suffer an economic injustice, but at the same time I will confirm that eminent domain makes our store of political liberties poorer. If we cannot or do not want to liberate ourselves from this government power, then the only reason for discussing it is to understand how it works and how it might be made to work better. Several areas of improvement come to mind  How can it be a lighter burden on our liberties  How can it be less demanding on the fruits of our labors?  How can it be fairer and thus create greater confidence in our laws and those who use them I cannot answer these questions as a scholar steeped in economic theory and practice or jurisprudence. I will address these issues from some thirty years practice in real estate appraisal. I offer as an apology for getting personal what Thoreau offered at the beginning of Walden: “I should not talk so much about myself if there were anybody else whom I knew as well. Unfortunately, I am confined to this theme by the narrowness of my experience.” My experience is narrow because it is limited to the eminent domain procedures that call for real estate appraisal. You might consider the other papers in this symposium to be the legal and economic theory and consider me as a field test. My practice as an appraiser, however, may be wide enough to be of some use in explaining why eminent domain, especially that mutation of it made possible by Kelo widens the possibility of unfair outcomes, who is most likely to be injured, how, and why. I began appraising as an expert witness in eminent domain proceedings for the B. Everett Jordan Dam and Lake in North Carolina in 1973. That practice expanded to include many kinds of taking cases, including airport expansion and noise damages, community redevelopment, mining, power line and gas line rights of way, highways, landfills, and down zoning. In 1991 I began to work in the former Soviet Union and Eastern Europe. In Kazakhstan I served as the resident advisor for housing and land reform while also teaching property valuation for the World Bank in Central Asia. Finally, as an appraiser in eminent domain proceedings I have not looked at my subjects through the narrow focus of an iron pipe, but with a wide angle, fish-eye lens, taking in the entire ocean I swam in. Herewith I offer you an appraisal, not of the properties, but of the procedures by which government takes them, and of the human temptations those procedures bring into play RELEVANT LEGAL MECHANICS On paper, most states and the federal government have what seem to be reasonable laws, regulations, and manuals of procedure for the conduct of a takings process by eminent domain. The questions of justice begin with the very first step—what qualifies the government in the name of “public purpose” to take property from a private citizen. I pretend no great expertise in that matter. I do know enough, however, to believe that a close look at the nuts and bolts of the litigation process that begins after a public purpose is established, both deepens our appreciation of the dangerous forces set in motion and of the very real likelihood that a takings process, once set in motion, will lead to great injustice. For any particular property the appraiser first enters the taking process when the government decides that it needs the particular property of John or Jane Doe. Although the process from declaration of public purpose to the definition and payment of just compensation is familiar to many, let me list those actions most relevant to my propositions. Let us assume a city has decided to acquire several blocks of homes. The typical steps are as follows: Step one. Preliminary appraisal. The city does at least informal appraisals of the properties. Step two. The Negotiation Probe. The city sends out a negotiator to present the government’s estimate of value and to make an offer. Step three. Offers and counter offers. The city and private owner negotiate. (Or sometimes the owner refuses to negotiate.) Step four. Take it or leave it. The city makes a final offer. Step five. Condemnation. The city files condemnation papers, puts on deposit a sum equal to its formal offer. Step six. Cry Uncle or Go to Trial. The owner can cry “uncle” and take the offer, or challenge the justice of the offer in court. Step seven. The trial. A judge, commission or jury hears the evidence and decides how much money is just compensation. Obviously I have left out many activities, including the appeal that sometimes comes after the trial. I have listed only the steps that are the most common milestones in a takings process and the ones where I have seen the goal of just compensation ambushed by participating rent seekers. HOW WELL DO THESE PRESCRIPTIONS WORK TO PROVIDE JUST COMPENSATION? Each of these seven steps is often corrupted by chance or on purpose. My experience convinces me that the process never did work very well—for any party—and why Kelo expands government power in ways that put ever greater burdens of economic risk on those least able to survive them. Property owners, however, are not the only ones put at risk. The other principal party to a takings case is not, as many people presume, the government. It is the taxpayer. The government may be the recipient of the title, but it pays for that title with taxpayer funds, and it acquires, holds or conveys that title in the name of the taxpayers. What Kelo confirms is that the government may now openly act as the taxpayers’ real estate agent, acquiring property with no intention of holding it, but buying land from one party on behalf of another private party. All for the taxpayers’ ultimate benefit, of course. That’s why the process can proceed under the legal cover of “public purpose.” In theory, the government, like any real estate agency, has a fiduciary duty to its client. Herein lies the first distorting vector in the process of rendering just compensation. By the time the taxpayer’s fiduciary has begun the taking, that fiduciary has created a special interest of its own. That interest seldom serves either taxpayer or the property owner well. Like a stock broker buying for his client’s portfolio, government agents must also watch out for their own interests, and those may conflict with both of the other parties. The government planners and the politicians who enable their vision of community investment are locked into their definition of public purpose and the numbers for costs and benefits. The second distorting vector arises because government officials and politicians do not want to be seen as paying too much, while on the other hand, they cannot be seen as bullying or cheating innocent citizens. In other words, they must be seen as reasonable and nice. Ideally this would lead to a dispassionate consideration, a just price, a golden mean, or, shall we say, “market value?” Sometimes it does. More often it does not because the goal is not market value but the appearance of wisdom and fairness and career tenure. Career tenure is a proxy for a secure flow of rents known as salary and benefits. In other words, the interest of the bureaucrat is best served not by achieving just compensation, but by pleasing the party or parties most likely to protect job tenure. Since the parties to a takings procedure want to maximize their gain and are seldom equal in their political influence, government’s actors skew their efforts toward the participants most likely to reinforce their career tenure. We will see this in action soon. Neither taxpayers nor property owners, however, are entirely helpless, and property owners in particular have options for active defense and offense to maximize their own gains. The Uncut Diamond Finding a diamond in a rough stone is one of the most common landowner tactics. We all know that the cut diamond looks entirely different and has much greater value than an uncut piece of milky stone. Rightly or wrongly, innocently or with guile, most landowners think a significant part of their property value is hidden even to the most experienced eye, no less to a government bureaucrat or to blind justice. They practice a variety of ways to make that value credible before the filing of condemnation fixes the taking date and the date of value. A Condemnation date, of course, freezes the date for just compensation. One of the most common diamonds in the rough is the undeveloped subdivision. Courts have often addressed the “subdivision value” by rulings that say an undeveloped piece of land cannot be appraised on the basis of finished lots that lie in its imagined transformation into a housing subdivision (or any other unrealized use). Typically, appraisers follow court and appraisal guidelines that a highest and best use that is not the present use of the property, must be possible in the immediate future. With that in mind, many owners take measures to show that they have begun to cut the rough diamond. They do soil tests, apply for subdivision permits, obtain septic approvals, get subdivision plans drawn up, and survey and stake lot lines. Some property owners go as far as making physical improvements and obtaining contingent contracts of sale. Once such things are done, the property owner is in a better position to ask an appraiser to estimate a present value for the future prices of the lots. A much shadier way of revealing the diamond inside the rough stone is to inflate the prices recorded for comparable sales or to actually fake such sales. The owner of a property being taken for Interstate 85 once gave me the deeds and purchase agreements for several lots and homes sold on land adjacent to the land the Department of Transportation was taking from him. The buyers confirmed the prices. I used the sales for estimating value of the condemned property. Only when the federal attorney cross-examined the owner did anyone discover that the sales were to members of the owner’s own church, to his good friends, and to partners in crime. Any appraiser must be part investigative journalist and detective, and any good appraiser knows that public records alone are not sufficient documentation of market transactions. Professional standards, however, do not oblige an appraiser to be a criminal investigator. The Big Chill Many opportunities to game the takings process, legal and illegal, arise because between the public announcement of a project and the actual date of taking. This window of opportunity may be open from several months to a decade or more. An agile property owner can take advantage of even a short lapse of time. The preferred tactics are those which allow the owner to undertake the activities that reveal the diamond in the rough. Under the law property is considered marketable until condemned, the equivalent of innocent until proven guilty. The longer the window is open, however, the more likely that the government will benefit, whether it means to or not. The announcement of a project that requires taking property casts over property values what we call the “chill of condemnation.” It is also known as “condemnation blight” and in California as “Klopping damages.” While states differ on when the precise date of taking occurs—some using date of valuation, some trial date, others date of depositing funds, etc—all allow a long open window between the time the public knows property will be taken and the time it is considered taken. Only the most wily or zany speculators will deliberately buy a property that is certain to be condemned. Congress first proposed North Carolina’s 48,000 acre B. Everett Jordan Dam and Lake in the early 1960s. All the land was within 20 miles of booming Chapel Hill and the rapidly expanding University of North Carolina. Much of it lay within five miles. At least ten years passed between announcing the project and the first offer to buy a tract of land. Land and homes certain to be taken became less saleable as the project inched closer to reality. City and county governments passed laws making changes in land use more difficult. Near the very end, environmental lawsuits delayed the taking two or three years. Government appraisers and attorneys often claimed that the lack of sales and development supported their highest and best use designation—farmland or woodland—and its accompanying low value. The moral of the story is that the longer the chill of condemnation lasts, the more heavily it burdens property values and the ability of property owners to prove what market value should be. Owners lose the ability to cite recent comparable sales of neighboring properties, the most reliable appraisal method. Kelo’s justification of taking blighted properties or any properties that pay low taxes puts all poor neighborhoods on an orange level takings alert and chills their value. Many owners of such properties will never know this, and if they did know it, they could not afford the cost of the statistical work to document it. Made As Instructed One of the most prestigious designations for an appraiser is Member of the Appraisal Institute, or MAI. In the adversarial world of litigation, lawyers attacking an appraiser with this designation often quip that MAI stands for Made As Instructed. In step one of the taking procedure, the preliminary appraisal, the condemnor’s appraiser often receives suggestions that amount to instructions. Because many appraisers want the well paid repeat business of appraising for government agencies and utilities, they are willing to make their appraisal as instructed or as they believe they are being instructed or even as they believe they might be instructed. We shall see this in action as we move through the description of later steps in the taking process. Suffice to say that the staff appraiser’s job and promotions are on the line, and the independent fee appraiser, working for either government or a trial lawyer has a lucrative steady client to please. The client, of course, has a reputation to protect and perhaps political constituents to please. The corollary of the instructed appraisal is the buyout of the threatening appraiser. When an expert witness gains the reputation of being a particularly effective witness, it behooves lawyers who might face this witness to hire him before the other side does, whether or not they intend to use his work product. This deprives the jury of his expertise unless the other side is astute enough to find out he has been financially abducted by the opponent and decides to subpoena his work product. Contract Condemnation A slight variation on Made as Instructed is what I call “Contract Condemnation.” Contract condemnation is the sibling of contract zoning. Driving through the countryside, we have been surprised often enough by a road that goes straight for miles, then suddenly makes a big curve and comes back onto the straight line. Other observers have cited the “highway churches” that seem to have a divine power to make roads go around their land, passing by but not through sacred ground. In the takings process it also happens that a landowner uses political influence to get part of his property condemned for a use that will significantly raise the value of his remaining property. Having a highway interchange take a fraction of a large landlocked property, for instance, can create a highest and best use windfall, the equivalent of upzoning. Partial takings for water and sewer lines, lakes, and reservoirs can create the same effect. Very few landowners would be unhappy to have a small portion of their land taken for a lake if the large remainder ends up sitting before a beautiful water view that typically raises its value a minimum of 50% and often over 100%. Alternatively, or additionally, a property owner might want condemnation because he is confident of receiving a highly inflated appraised value. Every now and then an enterprising investigative reporter is astute enough to catch these political payoffs that provide a condemnation dowry to a political concubine and victimize the taxpayers. Another term for this phenomenon might be “Beam Me Up Action.” Shock And Awe. The result of the preliminary appraisal is often “shock and awe” in the second step of the taking process—the negotiator’s approach to the landowner. This kind of “Shock and Awe,” does not involve artillery and bombs, but the most susceptible victim will be the least battle hardened owner. To use a piece of the standard market value definition, this is usually an owner who is not well informed. The government negotiator, not unlike the buyer at a used car lot, makes a first offer that is either well below market value or at least at the low end of the government’s appraisal reports. It may come accompanied by frightening descriptions of government powers, court proceedings, or insinuations that if this offer is not accepted, it will be withdrawn and a judge, commission or jury might award less. The shocked and awed and poorly informed owner accepts a low offer. The less educated, sophisticated, or experienced an owner is, the more he will be shocked and awed by the power of government, and the less likely that he will feel ready to negotiate, not to mention gird for battle in the courts. Within 20 miles of North Carolina’s booming Research Triangle Park and three major universities, I saw government negotiators offer farmers owning 20 to 100 acres of good development land the price that a farmer deep in the boondocks might find attractive. Some who had farmed all their lives, a few totally illiterate, could not imagine land values beyond farming. With the stick of government power behind them and an apparently juicy carrot in front, they took the government’s offer. They often felt the government was nice to add some moving money. The opposite of shock and awe is what I call the “Mouse and Elephant Syndrome.” Often the little landowner who threatens to make the government take his property scares the government into paying a higher price to avoid the large expense of legal proceedings and the big risk of a jury biased for the landowner and/or against the government. A Nevada study showed that local government paid 17% more than market value for lands taken for public projects, perhaps to avoid administrative and legal costs. Vexation Factor. In step three, as the government and the owner negotiate, we often see another distorting vector gather strength. I call this the Vexation Factor. Often the very process of negotiation destroys the conditions for a market transaction. Both parties are, if not unwilling, at least under duress. The definition of market value requires that “neither party be under duress.” Duress is sure to cause emotion to enter the negotiating process. It arises because the owner often asks an inflated price based on misinformation, opportunism, or vengeance. The government negotiators often react by deciding they must teach the troublesome owner a lesson and set an example to deter others from outrageous demands. Owners under the cloud of condemnation are often neighbors and neighbors tend to talk to each other, especially in time of crisis. For instance, the state legislature says the Parks Department must buy an unusually high hill in the flat coastal plain for a nature preserve. The state executive then becomes a buyer who may be willing but who also has no choice. The seller of the 100 plus acres informs the state that his beloved father, an accomplished amateur geologist, acquired the mountain because it was the only significant deposit of molybdenum ore east of the Mississippi. Drilling and assay has proven the deposit. The owner offers to sell the surface rights, to do shaft mining, to abide by environmental restrictions, and to leave the shaft in such condition it can be used as a geological exhibit. The parks people are afraid of mining and demand they get all and leave the landowner nothing. Condemnation proceedings begin. The civil but angry owner then hires an appraiser and a geologist and an economist to demonstrate for a jury the present value of the ore. The state—meaning taxpayers—ends up paying for minerals it will never use and foregoing the opportunity for an interesting exhibit that might have enhanced the park. In theory negotiations should mimic the market, but in fact, they often mimic the emotional run up to a war. The False Benchmark Given the stakes and the emotions, it is no wonder that steps four and five, the final offer, take it or leave it, and the condemnation documents filed as the basis of the legal proceedings, set a false benchmark. Government officials understand that a jury often compromises between the government’s formal offer and the property owner’s estimate of market value. The “market value” that the government places on deposit as it files condemnation documents is often far below the final offer made in negotiation. Government may or may not have had the foresight or slight of hand to have an appraisal that backs up this minimal estimate of market value. The most common way to justify a market value far below a property owner’s claim, is to specify a highest and best use that is not nearly as profitable as others, but one that seems logical or harmonious with existing uses. Thus, the farmland taken for the B. Everett Jordan Lake in North Carolina’s Research Triangle area was often appraised on the assumption that its highest and best use was farming. I once appraised a group of lots and ramshackle rental cottages in what was called the Red Row district of Rocky Mount, N.C. The city rightly described the buildings and lots as slum property and capitalized the minimal rents into minimal values. They wrongly described the highest and best use as slum rental although the word slum was absent. All the properties were zoned B-2 for industrial and commercial use. They were the only B-2 land in the city not used for industry or commerce. Many of them abutted the railroad with its nearby rail yard. Given that almost all the owners lived in other parts of town and held the properties for investment, the highest and best use was clearly for assemblage as an industrial-commercial property. (I suppose one might have considered a highest and best use of historical monument since Red Row in 1917 had become the birthplace of jazz musician Thelonius Monk.) Kelo, of course, raises a very similar issue. If a group of modest properties are suited for a much more profitable use through assemblage, shouldn’t they be valued and owners compensated on the basis of that use? After all, government’s own planners have decided that it is an immediately feasible use. False benchmarks in dollars are very often backed up by faulty assumptions of highest and best use. We often have a well wrought appraisal based on a bad assumption. Appraisers, of course, are supposed to research and prove highest and best use, but in practice they often assume what they are told to assume, or they assume what seems obvious. A slum is a slum is a slum. A farm surrounded by other farms is farmland. Government sometimes uses this tactic effectively if the property owners are unaware of demographic trends, zoning, pending infrastructure development, and land use planning—all strong shapers of highest and best use. This is another case of market value being negated by one party not being “fully informed.” The opposite side of the coin is the owner and owner’s appraiser who propose an unlikely and unsupportable highest and best use. It’s not uncommon for a jury to be convinced that almost any highway intersection is a commercial gold mine, every forest is a subdivision. The Diseconomy Of Scale A typical challenge to condemnation means that the landowner will pay his attorney’s firm about a third of any compensation that is over and above the money the government has put on deposit as its estimate of market value. Obviously the attorney stands to gain more from 33% of a $500,000 increase than 33% of a $5,000 increase. This economy of scale for the lawyer is almost always a diseconomy of scale for the owner of a modest property. If the owners of Rocky Mount’s Red Row rental shacks had not lucked onto a homegrown, star class trial attorney with an interest in civil rights, they would have been hard pressed to find any attorney willing to fight individual cases speculating on increases of a few hundred dollars here and there. Occasionally a civil rights group, a firm donating pro bono services, or a public interest law firm will take up the case of the small property owner, but even if the owner finds such representation, it is not likely to be a firm or attorney specializing in eminent domain. Perhaps one of the stronger arguments against the Kelo decision is that by affirming perceived blight and low tax revenues as a justification for eminent domain, it specially enabled government to take property from the poor. Some observers have said that the wealthy have a much better chance than the poor to be justly compensated for property taking. My own experience is that it is not how wealthy the client is that determines the odds for justice, but how wealthy the case might make the lawyer. The Br’er Rabbit Maneuver. In step six where the property owner must cry “uncle” or go to trial, we often see the “Br’er Rabbit Maneuver,” where the landowner is the rabbit and the briar patch is the trial to determine just compensation. In many instances an owner and/or his astute lawyer bets that inside the briar patch will be 12 sympathetic and/or gullible men and women of a jury. It is no coincidence that many of the same trial lawyers who have risen from humble backgrounds on the “wings of justice” suing doctors and hospitals also show up on the winning side of property condemnation proceedings. Studies that show property owners win some 41% of their cases show that going to trial is a reasonable risk. (Cohen, 2004) And such averages say nothing about individual attorneys. I’ve known attorneys who have a 90% or better success rate. Almost every condemnation trial is as at least as much a contest of professional skills as it is a contest of evidence. The professional skills include both the attorneys and the expert witnesses. The witnesses are almost always the landowner and his or her appraiser. In the 1980s Bill Thorpe of Rocky Mount, NC was perhaps the state’s most successful trial lawyer before the rise of John Edwards. His down home manner and self-deprecating wit and noblesse oblige toward the opposition created a strong predisposition for any jury to want to believe his case. He was also a very careful case builder, and I count it a compliment that I was often the lead appraiser in his group of expert witnesses. I also count it a personal honor that on a few occasions he dismissed me before trial because my findings did not provide the numbers he wanted. Appraiser Shopping This raises yet another practice that influences the quality of just compensation that a court awards—“appraiser shopping.” For the same reasons many addicts go “doctor shopping” condemnors and condemnees go appraiser shopping--to find a professional who will agree with their diagnosis and give them the prescription they crave. Appraisers themselves are not immune to the addiction, and if an appraiser can satisfy the addiction while representing the “little guy” against government, there’s also a satisfying feeling of an emotional and moral high. An appraiser, of course, should never ‘represent’ anyone, but I have seen several appraisers on the witness stand respond to the question “Whom do you represent, Mr. Appraiser?” with the name of their client. Too often the answer, “I represent myself and my research,” is not the honest answer. The Medium Is The Massage I have already noted that the trial itself can be a Br’er Rabbit’s briar patch for the property owner, and that once both sides are committed to trial, the outcome may depend as much or more on the skill of the lawyers and witnesses as on the quality of the evidence. In my experience most trials have been contests between relatively well matched teams of witnesses and experts, but I would also maintain that a significant number of exceptions exist. Many lawyers are adept at turning a courtroom into a theater. The story is almost inevitably the struggle of the little guy against the callous or even evil forces of government power. When government is taking land to confer on other private citizens, an adept lawyer-dramatist can imply dark conspiracies. When the story is played out most successfully, the winner is likely to get not only just compensation but a bonus for being an innocent victim. This bonus, of course, victimizes the taxpayers. Blindered Justice By far the larger question about the trial rules is the justice of the definition of just compensation. Legal history has effectively narrowed the definition of just compensation to market value. Quickly stated, market value is as the most probable price a property would bring if placed on the open market for a reasonable length of time, neither buyer nor seller being under duress and each being informed of the relevant facts. With various versions of this definition, the legal system has censored and gagged landowners and put blinders on judges, commissioners and juries. The most common grievance for most property owners is that they cannot receive a dime’s worth of compensation for the many very real values inherent in their properties. E.g. United States v. Miller, 317 U.S. 369, 375 (1942). Consider just a few excluded values: historical value, aesthetic value, psychological value, environmental value, hobby value, religious value, and family value. Before we consider the possibility of compensation for any of these values, let’s remember that the law does compensate for such values in other kinds of cases. Let an incompetent doctor’s practice kill my wife or son, and my monetary losses are just part of the compensation I would receive for these people who, if they will pardon my saying so, have no market value right now. In libel cases also a plaintiff may be compensated for non-economic damages. The narrow definition of just compensation in takings cases appears to put property owners in an inferior legal class. It certainly makes a mockery out of legal pronouncements about “making the property owner whole again.” For many property owners this is a bit like being considered whole again after being paid for a mandatory brain transplant or castration. Perhaps good reasons explain why, in the taking of property, juries should wear blinders, but such reasons are not obvious or air tight. CONCLUSION Having listed the many distortions in the eminent domain playing field from beginning to end, I admit that I have lacked the means to discover with reasonable accuracy how prevalent these distortions are. I have not discovered with statistical certainty what distance they have put between even the market value definition of just compensation and the actual awards. I have not subjected these distortions to the kinds of research that would determine the two most important parameters:  how frequent they are  are they strong enough factors to merit the expense and risk of changing the process I cannot even say with certainty which party--taxpayer or property owner--is most often the victim of injustice. (We should realize, of course, that even if on average market value is paid, this is like saying no more than sometimes owners are victimized, sometimes taxpayers.) In the end the most important message for a consideration of the justice of just compensation is that the key actions of the takings process are open to distortion and corruption. Have I suggested improvements? I admit that I have not. I do maintain that understanding the problem is the foundation of any solution. Legal scholars and economists have provided the cornerstones of this foundation, and I hope that I have provided at least some useful bricks and mortar. REFERENCES Cohen, Thomas H. and Steven K. Smith, Civil Trial Cases and Verdicts in Large Counties, 2001, in Bureau of Justice Statistics Bulletin, April 2004, available at http://www.ojp.usdoj.gov/bjs/pub/pdf/ctcvlc01.pdf Guidry, Krisandra and A. Quang Do, Eminent Domain and Just Compensation for Single-Family Homes transactions of single-family homes from a large metropolitan area during the construction of a state highway between April 1991 and October 1991, 207 http://207.208.196.137/webpac-bin/pdf/SingleFamilyHomes.pdf Munch, Patricia. An Economic Analysis of Eminent Domain, The Journal of Political Economy, Vol. 84, No. 3 (Jun., 1976), pp. 473-498 Walter, William “Appraisal Methods and Regulatory Takings: New Directions for Appraisers, Judges and Economists,” The Appraisal Journal (July 1995): 331–349.



Want to review or comment on this article?
Click here to login!


Need a FREE Reader Membership?
Click here for your Membership!





The Concierge Manual by Katharine Giovanni

This extraordinary guide will provide you with all the tools that you need to become a successful concierge, personal assistant and/or errand service professional. ..  
Featured BookAds by Silver
Gold and Platinum Members


The Landlord's Guide to a Successful Business by Nancy Neville

Everything you wanted to know about being a landlord but didn't know who to ask...  
Featured BookAds by Silver
Gold and Platinum Members

Authors alphabetically: A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Featured Authors | New to AuthorsDen? | Add AuthorsDen to your Site
Share AD with your friends | Need Help? | About us


Problem with this page?   Report it to AuthorsDen
© AuthorsDen, Inc. All rights reserved.