Vital Policy – Legislation Filed to Protect Property Rights, Sponsors Niceley and Carr

David Seal

State legislators will be considering proposed legislation in the current General Assembly aimed at protecting private property from eminent domain abuse. Under current Tennessee law, “blighted areas” are so broadly defined that virtually any property is at risk of condemnation by local housing authorities as part of a redevelopment plan. The proposed legislation, if enacted, will narrow the definition of blight, clarify that housing authorities can purchase property from willing sellers, and negotiate purchase prices for non-blighted property above market value, legislation sponsored by Representative Dale Carr (R-Sevierville) and Senator Frank Niceley (R-Strawberry Plains).

A provision of Tennessee law allows well-kept non-blighted properties to be swept up and condemned along side ones that are actually blighted, a provision known as the “blight loophole”. This provision is applicable to both city and county housing authorities as a work-around to bypass laws that protect private property owners. The proposed bills are aimed at closing this loophole.

The motivation for municipalities and their housing authorities to designate, condemn, and redevelop so called “blighted areas” is primarily enhanced tax revenue.

OPPOSITION TO THE BILLS

Housing authorities in Tennessee opposed similar legislation in the last General Assembly. Those agencies of government wish to retain the power of eminent domain over both blighted and non-blighted properties. Typically, property is condemned and transferred to private developers for upgrading, essentially transferring private property from one private owner to another.

BACKGROUND

An urban renewal plan involving eminent domain was carried out by the city of New London, Connecticut in the early 2000’s on behalf of a private company that promised to create jobs and improve the tax base in the Fort Trumbull neighborhood of that city. Property owners fought the property takings all the way to the U.S. Supreme Court, and lost, which resulted in the landmark ruling Kelo v. New London, essentially making it possible for government to take private property for nearly any reason, including private development. 43 states, including Tennessee, hastily enacted property protections in the wake of Kelo. However, Tennessee’s legislative act, Public Chapter 863 created a “blight loophole” which has become a favorite of housing authorities in acquiring property from unwilling sellers.

LOCAL ACTION

Jefferson County, Tennessee Board of Commissioners and the city of Dandridge, Tennessee Board of Aldermen both enacted resolutions in 2020 urging state lawmakers to protect private property rights by eliminating the “blight loophole”.