Public Advocate Releases Report on Reforming Eminent Domain for Private Redevelopment

Trenton, N.J. — Public Advocate Ronald K. Chen today released the Department of the Public Advocate’s report on the use of eminent domain for private redevelopment, outlining reforms he said are needed to protect the rights of New Jersey families and businesses.

“Our Department has conducted careful and thorough research on this important issue. We have met with experts and interest groups, we have studied the laws and their history in New Jersey and across the nation, and we have sat in the homes of families who have been impacted by the use of eminent domain for private redevelopment and listened to their concerns,” Chen said.

“Our research has left no doubt that the laws governing the use of eminent domain for private redevelopment in New Jersey must be reformed to adequately protect the rights of tenants and property owners.”

“The use of eminent domain for redevelopment must be limited to truly blighted areas.  The process that a local government follows when it wants to redevelop or use eminent domain must be reformed to ensure that it is fair, ethical and transparent, and that citizens have a meaningful opportunity for appeal.  Finally, in the rare instances in which eminent domain for private redevelopment is used, families must be fully compensated,” Chen said.

The Public Advocate provided the report to the Governor, the Legislature and the public with specific recommendations for reform, including:

• Revise the statutory definition of “blight.”  The New Jersey Constitution limits the use of eminent domain for private redevelopment to “blighted areas.”  Over several decades, the Legislature has expanded its definition of “blight” to the point where it has ceased to provide a meaningful limitation on the use of eminent domain, as the Constitution requires.  The report recommends reforming the statutory definition so that it provides real limitations on the use of eminent domain, is as objective as possible, and is based on an assessment of the current state of an area, not its potential future use.
• Make it easier for municipalities to declare an area “in need of rehabilitation,” which provides municipalities almost all the powers and benefits that come from designating an area as blighted, but does not allow the use of eminent domain.
• Require meaningful notice to tenants and property owners.  Such notice should be sent 60 days in advance of the hearing on the blight designation, and should explicitly advise residents, in plain language, that a consequence of this designation is that their property can be taken using eminent domain.
• Offer property owners a meaningful opportunity to appeal the blight designation.  The window to appeal the designation should be increased from 45 days to at least 120 days, and if the matter ends up in court, the municipality should be required to present ‘clear and convincing evidence’ that the area has been properly designated as blighted, thus putting the burden of proof on the municipality.
• Create more specific, comprehensive and community-driven redevelopment plans that give citizens the opportunity to help shape the redevelopment of their community, and provide more certainty about the redevelopment process.
• Add protections to help ensure that eminent domain is used as an absolute last resort, only when the area has been found to be truly blighted, every other option has been exhausted, and the inability to purchase a property from its owner is putting the community redevelopment project in jeopardy.  
• Protect the rights of tenants. Tenants would be required to receive adequate notice and opportunities to participate in the redevelopment process, just like property owners.  The local government or developer would be required to provide temporary rental assistance to displaced low-income tenants if affordable apartments are not available.
• Require that in the rare instances in which eminent domain is used that homeowners are compensated with at least the ‘replacement value’ of their home, which is defined as enough to buy a home of similar size and quality within the municipality under comparable conditions.
• Strengthen ethics rules for the redevelopment process.  Enact pay-to-play reforms that apply to all local redevelopment projects and contractors, including consultants hired as part of the project.  Require competitive procurement, such as requests for proposals, for selecting a redeveloper. Government officials, and those working on their behalf, should not gain any direct financial benefit as a result of a redevelopment project with which they are involved. 

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