Poletown decision did not create desired benefits; new ruling protects weak from government abuses
Michigan court fuels fight about future of urban development
By Ilya Somin / Special to The Detroit News. August 8, 2004

The Michigan Supreme Court has overruled one of the worst judicial decisions of modern times. In County of Wayne v. Hathcock, the court reversed the infamous 1981 Poletown decision that allowed Detroit to use the power of eminent domain to take and bulldoze an entire neighborhood so General Motors could build a new factory. As a result of Poletown, more than 4,200 people lost their homes, 600 businesses and 16 churches were destroyed, and a historic community — known as Poletown after its large Polish-American population — was wiped out.

Poletown set a dangerous precedent for similar abuses of government power in Michigan and elsewhere. The court’s unanimous decision to overrule it is a major victory for the constitutional rights of all property owners. Hathcock restores the traditional principle that government may not, except under unusual circumstances, take private property for the purpose of giving it to other private individuals or corporations.
Under most state constitutions, including Michigan’s, government may only take private property for a “public use.” Originally, this restriction was interpreted to allow condemnation of property only to carry out necessary functions of government, such as to build public roads. The public use test traditionally forbade most takings that transferred private property to other private hands. Courts rightly reasoned that the power to condemn property should not be abused to enable the wealthy and politically influential to appropriate their neighbors’ property for their own benefit.

Poletown undermined this safeguard. It permitted the condemnation of property for transfer to private hands, so long as the action created a public benefit by “bolster[ing] the economy.” As the Hathcock opinion explains, Poletown’s “economic benefit” rationale “would validate practically any exercise of the power of eminent domain on behalf of a private entity.” The court notes that Poletown rendered “one’s ownership of private property ... forever subject to the government’s determination that another private party would put one’s land to better use.” Therefore, property rights were “perpetually threatened by the expansion plans of any large [business].”

Homeowners and nonprofit property owners were particularly vulnerable to condemnations justified under Poletown. Because they make little or no profit from their property, it could always be argued that a large for-profit business would use their land in a more economically productive way.

Ironically, condemnations that transfer property to private businesses usually don’t even provide the economic benefits their advocates promise. General Motors and Detroit Mayor Coleman Young promised that the new factory would create more than 6,000 jobs. In reality, the plant employed less than half that many workers; possibly, more jobs were lost from the destruction of Poletown than were created by the factory.

This result is typical...

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