Unexpectedly Intriguing!
August 17, 2005

When the U.S. Supreme Court issued its decision in the Kelo v. City of New London case, little did anyone suspect that the city officials of New London, Connecticut would seek to punish the homeowners who stood in the way of their plans to transfer the land on which their homes stand to a private developer in the name of redevelopment and the hope of higher tax revenues. At least, not beyond forcing the homeowners off the property being taken under the city's use of its newly expanded power of eminent domain.

Today, officials of the City of New London are now going after the homeowners who stood in the way of their grand "redevelopment" plans by only offering to purchase the homeowners' property based upon the market rates in the year 2000. Worse, the City of New London is seeking to charge back rent for the years the homeowners fought the confiscation of their property in the courts, further rubbing salt in the wounds of the taking of their property.

Johnathan O'Connell writes the following in the July 14, 2005 issue of the Fairfield Weekly:

The New London Development Corp., the semi-public organization hired by the city to facilitate the deal, is offering residents the market rate as it was in 2000, as state law requires. That rate pales in comparison to what the units are now worth, owing largely to the relentless housing bubble that has yet to burst.

"I can't replace what I have in this market for three times [the 2000 assessment]," says Dery, 48, who works as a home delivery sales manager for the New London Day. He soothes himself with humor: "It's a lot like what I like to do in the stock market: buy high and sell low."

And there are more storms on the horizon. In June 2004, NLDC sent the seven affected residents a letter indicating that after the completion of the case, the city would expect to receive retroactive "use and occupancy" payments (also known as "rent") from the residents.

In the letter, lawyers argued that because the takeover took place in 2000, the residents had been living on city property for nearly five years, and would therefore owe rent for the duration of their stay at the close of the trial. Any money made from tenants, some residents' only form of income, would also have to be paid to the city.

With language seemingly lifted straight from The Goonies, NLDC's lawyers wrote, "We know your clients did not expect to live in city-owned property for free, or rent out that property and pocket the profits, if they ultimately lost the case." They warned that "this problem will only get worse with the passage of time," and that the city was prepared to sue for the money if need be.

So, how bad could paying these "use and occupancy" payments be? O'Connell reports the bottom-line impact to the homeowners whose property is being confiscated by the City of New London:

An NLDC estimate assessed Dery for $6,100 per month since the takeover, a debt of more than $300K. One of his neighbors, case namesake Susette Kelo, who owns a single-family house with her husband, learned she would owe in the ballpark of 57 grand. "I'd leave here broke," says Kelo. "I wouldn't have a home or any money to get one. I could probably get a large-size refrigerator box and live under the bridge."

Such are the rewards of standing against the unrestricted ambitions of the alliance of politicians and the plutocrats who finance their campaigns. All thanks to the Supreme Court Justices who ruled in favor of the city government in the 5-4 decision ending any restraint on the taking of private property by government. I wonder if Steven Breyer, Ruth Bader Ginsburg, Anthony Kennedy, David Souter and John Paul Stevens really gave any thought to what their ruling would truly come to mean?

HT: Coyote Blog and Reason's Hit and Run.

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