Hawaii Housing Authority v. Midkiff
|This article needs additional citations for verification. (July 2012)|
|Hawaii Housing Authority v. Midkiff|
|Argued March 26, 1984
Decided May 30, 1984
|Full case name||Hawaii Housing Authority et al. v. Midkiff et al.|
|Citations||467 U.S. 229 (more)|
|Prior history||Appeal from the United States Court of Appeals for the Ninth Circuit|
|Subsequent history||702 F.2d 788, reversed and remanded.|
|The state can use eminent domain powers to redistribute concentrated property ownership to a larger group of people.|
|Majority||O'Connor, joined by unanimous court|
|Marshall took no part in the consideration or decision of the case.|
Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984), was a case in which the United States Supreme Court held that a state could use the eminent domain process to take land overwhelmingly concentrated in the hands of private landowners and redistribute it to the wider population of private residents.
With 22 landowners owning 72.5% of the fee simple titles in the island of Oahu, the Hawaii Legislature concluded that the oligopoly in land ownership was “skewing the State's residential fee simple market, inflating land prices, and injuring the public tranquility and welfare,” and therefore enacted a condemnation scheme for title. Unfortunately, the shortage of buildable land on Oahu was in large measure caused by the fact that the government owned about one-half of the island's surface, which is what limited availability of land for construction of housing. Moreover, there was no basis for supposing that the cost of land sold in fee simple (as freehold titles) would be less rather than more expensive -- leaseholds, being temporary, fetch lower prices than fee simple titles which convey the right of ownership in perpetuity.
The court's decision looked to Berman v. Parker, in which eminent domain power was used to redevelop slum areas and for the possible sale or lease of the condemned lands for private interest. The United States Congress had the power to determine what was for the public good over the judiciary. The decision equated police power with the eminent domain of the sovereign's public use requirement.
In an 8-0 decision, the court voted that the Hawaiian act was constitutional. Hawaii's act to regulate the oligopoly was seen as a classic exercise of the State's police powers, and a comprehensive and rational approach to identifying and correcting market failure and satisfied the public use doctrine. Land did not have to be put into actual public use in order to use eminent domain. It is the taking's purpose, and not its mechanics that were important. Here, eminent domain was used to provide an overall market benefit to the wider populace.
The decision suggested that a judicial deference to the legislature was involved. If the legislature determines there are substantial reasons for the exercise of the taking power, courts must defer to the legislature's determination that the taking will serve a public use.
The decision held that the takings to correct concentrated property ownership was a legitimate public purpose.
However, the aftermath of the Midkiff decision failed to achieve the stated purpose of the redistribution legislation which was incapable of creating new housing because it only transferred title from the land lessor to the lessee-homeowners who already occupied existing homes on the subject property. As soon as the former lessees acquired fee simple titles to their homes, those became attractive to Japanese investors and speculators who paid outlandish prices for those homes (largely located in the upscale Kahala and Hawaii Kai neighborhoods), causing a ripple effect throughout the island. Home prices on Oahu, far from falling as intended by the legislature, surged upward and more than doubled within six years.
Limitations of the decision
The decision, though, placed limits on the power of the government citing:
A purely private taking could not withstand the scrutiny of the public use requirement; it would serve no legitimate purpose of government and would thus be void.... The Court's cases have repeatedly stated that 'one person's property may not be taken for the benefit of another private person without a justifying public purpose, even though compensation be paid.’
Midkiff is reaffirmed by Kelo v. City of New London.