The 5th amendment guarantees that property may not be taken for public use without just compensation. Radley Balko has a textbook example of how governments play games with compensation in eminent domain cases. A government agency in Tacoma, Washington is trying to buy up land for a parking lot. For one particular property, they initially offered $439,000, about $8 a square foot. That's what they paid for an adjacent piece of land from another owner. But the owner of this property balked and filed a suit to try and stop the takeover of the property. After losing that court case, the offer for the property suddenly dropped to $240,000, which the agency says is due to a "reassesment" of the value of the property. At the same time, guess what the government says the property is worth for tax purposes? $303,000. So when they want to tax you, it's worth much more than when they're trying to steal it from you. How convenient.
- Log in to post comments
If I were the property owner, I would consult a lawyer to see if the punitive "reassessment" by the city is actionable.
That can't be right. If the court were enforcing a "forced purchase," shouldn't they have ordered the state to pay the landowner the original stated price? Seems to me the two are kinda inseparable.
Where I'm from, the legislature is trying to put a stop to government using eminent domain to seize private property to give to private developers. That's a clear and outrageous abuse of eminent domain in my mibnd, and luckily it has broad support from all over. I'm hoping they've got enough to veto-proof it.
According to the article, the court fight up to now has only been about the appropriateness of the condemnation, not the value the agency has to pay. One presumes there will be further litigation to determine the appropriate compensation.
An appraiser quoted in the article gave an off-the-cuff estimate of $10 per square foot, or roughly $600,000.
I am not familiar with Washington state law on condemnation, but here in NC the value of condemned property is as of the proposed date of condemnation. Based on that, I'm not sure how the agency is able to change their offer.
As an aside, Raging Bee, neither offer will be admissable in court.
The Ohio Supreme Court just issued an eminent domain opinion today in which they said that using the criterion of a "deteriorating" neighborhood was unconstitutional as vague. They also said that eminent domain statutes had to be subjected to heightened scrutiny.
See the opinion here.
kehrsam, I am neither a lawyer nor someone who plays one on TV, but it seems to me that an offer punitively lowered would present issues that would merit their own legal treatment, as opposed to simply litigating the value of the condemned property.
A few years back when I found my house and land was reassessed at more than double that of some of my neighbors, I appealed. In the process of preparing the appeal (which did succeed in reducing my assessment by about 23%) I found out that the assessments on neighboring properties were all over the place with no rhyme or reason for the range. However, if there was a pattern, it was that owners of small parcels with small houses were assessed, and therefore taxed, at a rate more than double (and sometimes triple) that of large properties or large houses. The real estate tax system, at least in Pennsylvania, is broken and should be replaced. It's an antiquated system that traces its origins to medieval England where the only people who owned land were the very rich and it was in effect the medieval version of progressive taxation. It no longer works that way and hasn't for decades.
From my experience in living and owning property in five states and six cities, municipalities play games with assessments regardless of what the law says. I say eliminate real estate taxes entirely and go to a combination of transaction and income taxes, blended to ensure that those at the bottom of the economic scale aren't hosed to the benefit of the wealthy, which obtains in most the states and localities with which I'm familiar.
What I am presuming is that the valuation for purposes of making the offer did not vest until the court decision in the agency's favor, and the agency is relying on an estimate from that date. That is the charitable explanation.
In reality, the agency asked the estimator to come in with a number that would help with the compensation litigation. In my part of the world, they aim for a number that is roughly 2/3 the actual value, since the lawyers are going to take a 1/3 contingent fee in most cases. The obvious answer for this lowballing (@40% actual value) is punitive intent.