Hawaii Housing Authority v. Midkiff

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.

Background

With 22 landowners owning 72.5% of the fee simple titles in the island of Oahu, the Hawaii Legislature concluded that this was an oligopoly in land ownership and it was “skewing the State's residential fee simple market, inflating land prices, and injuring the public tranquility and welfare.” However, the shortage of buildable land on Oahu was due in large measure to the fact that roughly half the island is government-owned and thus unavailable for privately owned housing.

The Hawaii legislature enacted a condemnation scheme intended to transfer titles to these lots from its owner (the Bishop Estate) to the home lessees. The case focused on the taking of land held by the Bishop Estate, a charitable trust that held the residual lands of the Hawaiian monarchy, and used the proceeds to support the Kamehameha schools that provide an education to Hawaiian children. The Bishop Estate had subdivided some of its land on Oahu, and leased individual lots to land lessees who built homes on them, at first paying nominal rents to the estate. But eventually, as Oahu land values rose (as did rents) the tenants demanded that the state acquire the Estate's title and reconvey title to the individual lots to the lessee-homeowners who would have to pay fair market value to reimburse the State for the acquisition.

Decision

The Court's decision looked to Berman v. Parker (1954), 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 Court held that the takings to correct concentrated property ownership was a legitimate public purpose.

Limitations of the decision

The decision, though, placed limits on the power of the government, stating:

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.’

Aftermath

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 transferred title from the land lessor only 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.

The primary holding of Midkiff was reaffirmed by Kelo v. City of New London (2005).

See also

• List of United States Supreme Court cases, volume 467

References

External links

• Text of Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984) is available from:  Findlaw  Justia