Zoning & Public Sector
Both the United States and Ohio constitutions limit the government’s power of eminent domain to situations where the property is being taken for a public use and the owner is compensated (United States Const., Amend. 5; Ohio Const., Art. I, sec. 19). In Kelo v. City of New London (2005), 125 S.Ct. 2655, the United States Supreme Court held that economic development was a legitimate public use and authorized the taking of private property in an area that was economically depressed, but not blighted, in order to give it to another private entity for purposes of economic development. Kelo noted, however, that individual states were free to enact legislation to further restrict the exercise of eminent domain.
In response to Kelo, the 126th General Assembly created the Legislative Task Force to Study Eminent Domain and its Use and Application in the State (hereinafter “task force”). The task force was instructed to study the use of eminent domain and its impact on the state, how the decision in Kelo affects state law governing the use of eminent domain, and the overall impact of laws governing the use of eminent domain on economic development, residents, and local governments. The task force included members of the House and Senate, representatives from executive branch agencies, local government representatives, and advocates for developers and property owners. (Sections 3 and 4 of Am. Sub. S.B. 167 of the 126th General Assembly.) The task force issued its final report on August 1, 2006.
In addition to creating the task force, Am. Sub. S.B. 167 placed a moratorium on any public body using eminent domain to take private property that is not in a blighted area, without the consent of the owner, when the primary purpose for the taking is economic development that will result in ownership of the property being vested in another private person. This moratorium did not apply if the property was to be used for streets, roads, walkways, paths, or other ways open to public use, public utilities, common carriers, public parks or recreation areas, or government buildings or grounds. If an agency violated the moratorium, it could lose state funding for the project. The moratorium expired on December 31, 2006. (Section 2 of Am. Sub. S.B. 167.)
Shortly before the task force issued its final report, the Ohio Supreme Court issued an opinion in City of Norwood v. Horney (2006), 110 Ohio St.3d 353, that interpreted the Ohio Constitution to provide greater protections for property rights than under the Kelo decision. In Norwood, the court held that an economic benefit to the community is not enough on its own, absent any other public benefit, to satisfy the public-use requirement. The court also struck down the City of Norwood’s definition of blight as unconstitutionally vague because it included “deteriorating” areas, a classification that the court found improperly relies on speculation as to the future condition of the property. Although the task force was unable fully to evaluate the implications of the Norwood decision, its final recommendations incorporate the major holdings of that decision.
Prior law contained multiple definitions of blighted areas and slums that were similar to, but not necessarily consistent with, each other. The laws authorizing counties to conduct renewal projects (R.C. 303.26 to 303.59) contained nearly identical definitions of blight and slum. “Blighted area” was defined as an area that substantially impaired or arrested sound growth, retarded the provision of housing accommodations, or constituted an economic or social liability and was a menace to the public health, safety, morals, or welfare in its present condition and use because of the presence of a substantial number of slum, deteriorated, or deteriorating structures, predominance of defective or inadequate street layout, faulty lot layout in relation to size, adequacy, accessibility, or usefulness, unsanitary or unsafe conditions, deterioration of site or other improvements, diversity of ownership, tax or special assessment delinquency exceeding the fair value of the land, defective or unusual conditions to title, or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors. “Blighted area” also included a disaster area in need of redevelopment or rehabilitation as certified by the county commissioners and the governor. “Slum area” was defined as an area that was conducive to ill health, transmission of disease, infant mortality, juvenile delinquency, or crime, and was detrimental to the public health, safety, morals, or welfare because it contained a predominance of buildings or improvements, whether residential or nonresidential, that suffered from dilapidation, deterioration, age or obsolescence, inadequate provisions for ventilation, light, air, sanitation, or open spaces, high density of population and overcrowding, or the existence of conditions which endanger life or property, by fire and other causes, or any combination of such factors. (R.C. 303.26(D) and (E); 303.36–not in the act.) A county that was conducting a renewal project to address blight or slum conditions was specifically authorized to exercise eminent domain (R.C. 303.37(C), 303.38–not in the act).
The laws authorizing the creation of community urban redevelopment corporations defined “blighted area” as an area containing a majority of structures that have been extensively damaged or destroyed by a major disaster, or that, by reason of dilapidation, deterioration, age or obsolescence, inadequate provision for ventilation, light, air, sanitation, or open spaces, unsafe and unsanitary conditions or the existence of conditions which endanger lives or properties by fire or other hazards and causes, or that, by reason of location in an area with inadequate street layout, incompatible land uses or land use relationships, overcrowding of buildings on the land, excessive dwelling unit density, or other identified hazards to health and safety, are conducive to ill health, transmission of disease, juvenile delinquency and crime and are detrimental to the public health, safety, morals, and general welfare (R.C. 1728.01(E)). A project undertaken by a community urban redevelopment corporation could include the acquisition of blighted property “by purchase or otherwise” (R.C. 1728.01(F)(2)).
The laws authorizing metropolitan housing authorities to operate housing projects defined “slum area” as any area where dwellings predominate which, by reason of dilapidation, overcrowding, faulty arrangement or design, lack of ventilation, light, or sanitary facilities, or any combination of these factors, are detrimental to safety, health, or morals (R.C. 3735.40(B)). Metropolitan housing authorities are authorized to use eminent domain to conduct housing projects in slum areas (R.C. 3735.31(B)–not in the act). Prior law authorized municipal corporations to appropriate and rehabilitate buildings or structures that they found to be a threat to the public health, safety, or welfare, that had been declared to be a public nuisance, and that either had been found to be insecure, unsafe, structurally defective, unhealthful, or unsanitary or violated a building code or ordinance (R.C. 719.012). Continuing law also authorizes “impacted cities” to use eminent domain for purposes of economic development (R.C. 719.011–not in the act). “Impacted cities” are cities that have been extensively damaged by a major disaster and declared to be a major disaster area under federal law, or cities that have attempted to cope with the problems of urbanization, and that provide for economic development by either authorizing the construction of housing by a metropolitan housing authority or adopting a program to combat blight and slums that has been certified as workable by the director of development (R.C. 1728.01(C)).
The act replaces all of these definitions with a single set of definitions that are applicable throughout the Revised Code except for Chapter 725. (municipal urban renewal). The act defines “blighted area” or “slum,” as used in the Revised Code, as an area in which at least 70% of the parcels are blighted parcels and those blighted parcels substantially impair or arrest the sound growth of the state or a political subdivision of the state, retard the provision of housing accommodations, constitute an economic or social liability, or are a menace to the public health, safety, morals, or welfare in their present condition and use (R.C. 1.08(A)).
For a complete analysis, please click here. Please contact Rayan F. Coutinho at (513) 852-6030 to learn how Wood & Lamping LLPās Zoning and Public Sector Group can help your municipal corporation or township. We represent numerous communities in the tri-state area in various capacities, including as law directors and external counsel.
admin @ January 6, 2008
