My wife and I just saw the Pink House movie. Excellent. You have to go to one of those artsy theaters to see it. It is the story of the infamous Kelo v. City of New London Supreme Court decision.
Institute of Justice case
My wife wanted to see it because we give to the Institute of Justice. It was one of their cases. I wanted to see it because I write about real estate investment.
Forced out of her home
The case said governments could seize people’s homes for the purpose of selling the homes to a private corporation based on the idea that the community as a whole would net benefit. The case went all the way to the U.S. Supreme Court where Ms. Kelo, the owner of the pink house, lost. She was paid a court-ordered price for the house, supposedly fair market value, and forced to move out.
The movie credits said it was the most hated Supreme Court decision and that many states subsequently passed laws against what was done to Ms. Kelo.
During the credits, the actual Suzette Kelo was shown standing on the lot where her house had been demolished. What had been built there to replace her house since the 2005 decision? Nothing. What is planned to be built there in the future? Nothing.
Last twelve words of the Fifth Amendment
The last twelve words of the Fifth Amendment are “nor shall private property be taken for public use without just compensation.” I recite them from memory and I have been able to recite them from memory for about 40 years. That clause is a big deal to me. I have a history with that clause.
Not in the ACLU’s copy of the Bill of Rights
I used to support the ACLU. They claim to defend the Bill of Rights. But I could not recall them ever defending a property owner who, like Kelo, was the victim of a “taking” as that clause is called short.
I called them and asked about that. They admitted they had never taken a “takings” case. “Why not?” I asked. “You say your reason for existence is the Bill of Rights. The Fifth Amendment is part of the Bill of Rights.” They had no answer.
The answer is they are Dickensian Marxists. They hate private property. The Bill of Rights loves private property.
So I published an article in which I denounced the ACLU for falsely claiming to defend the Bill of RIghts. I said the ACLU’s Bill of Rights has twelve words that have been snipped out like a censored letter from behind the Iron Curtain.
‘Use,’ not ‘benefit’
My position on the Kelo case is simple. The Constitution says for “public use,” like a highway built and owned by the government. It does NOT say “public benefit.” The U.S. Supreme Court majority reasoned as if it DID say “benefit” rather than “use.” The five justices who affirmed that decision are liars. They rewrote the Fifth Amendment which they have no authority to do.
Zoning is unconstitutional
I once wrote an article titled “Zoning is unconstitutional” for the newsletter I worked for. I feared that my readers would chew me out for not telling them how to make money in that article. I was wrong. It was one of the most popular articles I ever wrote. We got reprint requests for it—a first.
The 1926 Ambler v Euclid decision that said zoning was constitutional under “police power.” The phrase “police power” does not appear in the Constitution.
Furthermore, I say it violated the takings clause because it permits uncompensated confiscation of an easement that reduces the value of private property. The U.S. Supreme Court said repeatedly that zoning is okay as police power as long as the government does not prevent ALL use of your property. That is like saying an arsonist who burned your house down did not financially harm you because you can still have a picnic on the charred remains.
Three constitutional ways to accomplish the zoning purpose
And I said private property owners have three other constitutional ways to control what happens on a property:
• BUY the property and do not do anything you do not want done there
• buy the property, insert a DEED RESTRICTION prohibiting uses you oppose then resell the property. The restriction will reduce the resale value of the property which means you PAID for what you might have gotten for free through unconstitutional zoning. As you should. People would do a lot less adding deed restrictions to their own properties than zoning because if there were no zoning.
* Buy an EASEMENT prohibiting what you do not want on the property. Again, you are PAYING for the reduction in the property value in question.
Zoning also accomplishes the last two of those, only it costs you nothing and the victim of your stealing the easement under color of law gets no compensation for your having reduced his property value.
Since I am a real estate expert, you might except I would have some insight into how realistic the depiction of the behind-the-scenes stuff about the real estate developers in the movie was. Actually, I do not.
I was never a developer, mainly because it is a very crooked part of real estate. It is common, if not ubiquitous, that developers have to bribe those who give permits or at least spend a whole lot of money begging for zoning variances and permits. I was only involved in buying existing buildings and improving those properties, which are honest businesses.