A recent PropertyProf posting noted coverage by NPR of a land developer's attempt to buyout a trailerpark development on prime Palm Beach waterfront. Homeowners could feasibly receive more than a million dollars a piece if they ultimately accept the private developer's buyout.
This is not a case of eminent domain -- the private developer submitted an unsolicited bid to the owners -- yet it raises the critical question of whether objectively (or subjectively) high payments mitigate the concerns of eminent domain.
Surely, in most cases, such payments decrease the concern that homeowner is being 'ripped off' -- i.e., that the Taker is receiving substantially more in value than the evicted homeowner is receiving. In The Neglected Political Economy of Eminent Domain, Nicole Stelle Garnett makes a compelling argument that such payments ultimately work to the disadvantage of some homeowners as the 'high' payments ultimately erode public opposition to a takings project because (1) the public at large may believe the homeowners are being adequately compensated (indeed, as Ms. Garnett points out, homeowners are often compensated at supra-mandatory levels), and (2) the natural allies of fellow homeowners who favor the buyout no longer have a reason to oppose the plan.
I also found it interesting that the homeowners in the trailerpark convened a meeting, collectively rejected the initial offer, and put out bids to receive offers from outside developers. This unique and impressive show of community action and cohesion quite obviously increases the homeowner's bargaining power, yet it also places great pressure (both popular and legal) on homeowners who may not want to sell for a variety of reasons -- perhaps principally because they simply will not be able to replace beachfront property in Palm Beach, even with a $1 million check in hand. Which brings up an additional consideration, one in which I am struggling with on my student comment examining post-disaster compensation. Specifically, in a status-preservation compensation scheme, what should the benchmark be for the displaced homeowner? Would it be a reasonable replacement? Substantially similar? What would the replacement housing be for a displaced trailer-owner with waterfront property? Federal displacement legislation holds that it need not be a exact replacement, but wouldn't anything less in this case (if it were an eminent domain taking) be most unjust because the land is being sought principally for its waterfront status -- which is precisely why the homeowners likely live in the community to begin with.
Top Photo: Florida coastline; Bottom: Susette Kelo's home, which the City of New London ultimately paid to relocate.