In California, there’s never been a tougher time to be in the business of taking private property from one person and giving it to another. First, Governor Jerry Brown proposed eliminating the state’s 400 some redevelopment agencies. Now, the agencies have been told by the courts that declaring blight just won’t do: They actually have to prove it before they can use eminent domain.

The Supreme Court’s 2005 decision in Kelo v. New London said that economic development was a valid use of eminent domain, as long as the government is following a “comprehensive development plan.” California, however, enacted its own laws to protect property owners from eminent domain abuse, and included in those protections is a requirement that blight has to be demonstrated. An April decision by the Superior Court of California has put teeth in those protections.

After National City, Calif., declared 692 properties to be blighted so that it could use eminent domain to give the properties to a developer of high-rise condominiums, one of the owners of those “blighted” properties fought back. With the help of the Institute for Justice, the Community Youth Athletic Center won its legal challenge to National City. The court struck down the city’s plans, saying that minor maintenance issues and lack of parking are not blight. The CYAC, by the way, offers boxing lessons and other diversions to low-income youth in the neighborhood.

See IJ’s Web site for more on the case. As Doug Kaplan pointed out in our Fall 2008 issue of The Insider (“The Allure of Public-Private Development,”) eminent domain is but one of the many tools the redevelopment agencies use to direct economic development. What it all amounts to is politicians deciding what consumers want instead of consumers deciding what consumers want.