Since the devastating Supreme Court decision on the Kelo case, there have been efforts across the US to help shore up property rights. The absence of strong property rights has been shown to be an inhibiting factor to entrepreneurial economic development. Entrepreneurs are not as willing to take a risk with their investment and capital if they do not believe that their property rights will be protected by the government.
An important victory in securing property rights has just occurred in New Jersey.
The Superior Court of New Jersey issued a critically important decision to private-property owners in a case dealing with the state's interpretation of how properties can be deemed "blighted" and consequently ripe for eminent domain takings. To the delight of property owners, the Superior Court overruled the trial court's decision and held that the law only allows a property to be deemed "blighted" in narrow circumstances.
The dispute involved a commercial property owned by BMIA, LLC in Belmar, New Jersey. BMIA had been fighting to keep its property, the Belmar Mall, from being condemned for a redevelopment project. The Belmar Mall is a commercial center that contains 20 mom-and-pop businesses, along with three major chain tenants.
Here is a picture of this so-called "blighted" property:
The trial court ruled that this property was located in an area in need of redevelopment. On appeal, the Superior Court of New Jersey determined that the trial court mistakenly relied on this finding in condemning the property for a redevelopment project. The Superior Court's decision reinforced that the New Jersey Constitution restricts government redevelopment to "blighted" areas. Further the Court said that finding an area in need of redevelopment does not show that the property reaches the "blight" standard. In New Jersey, a property is found to be a "blighted" area if it is detrimental to the safety, health, morals or welfare of the community. This was not the case with the Belmar Mall, and, therefore, the court reversed the lower court’s decision.
Hats off to the National Federation of Independent Legal Foundation for participating in this case.
