[Continued from yesterday’s Part 2 and the preceding Part 1.]
As we saw in Part 2, after the Justice Department had Emily Litella-ed on defending its ‘disparate impact’ settlement cudgel in the St. Paul case, the focus of legal symbologists shifted to Mount Holly, New Jersey, where what had been a case about eminent domain for economic development (ED4ED) was hijacked, at least symbolically, into being another test case to give the Supreme Court an opportunity to rule on whether the Administration’s disparate impact gloss was actually part of the Fair Housing Act, or whether it was a convenient chimera.
We bring money!
That case seemed ready to be decide, when (from the point of view of Mount Holly), the cavalry arrived, in the form of free money that mooted the financial issue which had caused the town to pursue eminent domain originally.
Under the terms of the settlement, part of the land slated for redevelopment will be handled by a non-profit real estate developer which raised money to buy a parcel of the property and built new housing units that low-income Gardens residents will be able to afford.
And how did this good thing happen?
Liberal and fair housing groups such as the Open Society Institute, the Ford Foundation, and the National Fair Housing Alliance helped fund the purchase of the property.
When judging the probabilities of a case, ask yourself, Who wanted to get to court, and who wanted to stay out of it? Somehow I think that the National Fair Housing Alliance wouldn’t have been so keen to pony up for economic feasibility if it thought it had a winner. Nor would the Open Society Institute.
A sleepy little town southeast of Philadelphia … and near the equally significant Mount Laurel
That solution was not crafted for the sixty in Mount Holly, but for the symbol.
The township will compensate the residents who want to leave and provide new homes for those who want to stay.
How many residents actually want to stay? As reported in the Philadelphia Inquirer (November 25, 2013), twenty.
The agreement calls for 20 remaining homeowners to get new townhouses or “replacement homes” expected to be financed through a mix of township, state, county, and federal funds, and private donations. An architectural rendering of the proposed townhouses is part of the 111-page settlement and shows two- and three-bedroom units with brick facades, bay windows, and covered front porches with pillars.
Spot the affordable housing?
In other words, the twenty remaining (very low income) residents will be sprinkled in among the 280 market townhouses, in a classic form of inclusionary zoning.
TRF Development Partners, a Philadelphia-based nonprofit that specializes in financing and redeveloping troubled neighborhoods, will oversee the project. The replacement homes will be included in a cluster of 44 townhouses on the 30-acre Gardens tract.
“All parties worked together for a common goal, the good of the township, and for a fair and equitable arrangement which allows the homeowners who wish to remain” in the Gardens to stay there during and after the redevelopment, said town solicitor George Saponaro, a lead negotiator in the deal. He was brought into the case when a new mayor and council were elected, starting in 2010, after making campaign promises to settle the thorny case.
The townhouses will be valued at $170,000, or just under market rate, and will be built near 300 condominiums that Keating Urban Partners of Philadelphia plans to build and to sell for more than $200,000. The redevelopment will also include about 100 new apartments, which are already underway, and a small strip shopping center, Saponaro said.
In other words, it really is urban revitalization, and if it hadn’t been for all this litigation it would have been seen from the beginning as a good thing.
In return, the residents will sell their rowhouses to the township so land can be cleared for the project. This will allow the stalled project to proceed, unhampered by contentious litigation that had reached the highest levels of the state and federal courts.
Setting aside anything to do with symbolism or ED4ED, a negotiated in situ arrangement should have happened years ago. Stubbornness and lawyers took over.
Since the replacement houses will be worth more than twice the appraised value of the small brick rowhouses in the Gardens, the residents have agreed to assume a flat $20,000 no-interest mortgage for the upgrade, payable when they sell the townhouse.
Thus the residents who held out get to stay in the neighborhood, in brand-new market-quality homes substantially larger and worth substantially more than their current ones, and pay nothing for this except a token amount of soft debt payable only when they sell the townhouses. (This last is actually a very good idea, because it could easily occur to a resident to sell right away and pocket all the cash.)
“This is what the plaintiffs have always been requesting, they don’t want the community redeveloped and them not to be able to be a part of it,” said Olga Pomar of South Jersey Legal Services, one of the attorneys for the Gardens residents. “They want to be able to stay in this community while it’s being revitalized.”
Olga Pomar, SJLS
As they should; as is wholly understandable.
So for the residents of Mount Holly, and the Township of Mount Holly, the case ends where it should have begun, with inclusionary zoning and a right to remain as the residents’ upside. Said another way, the optionality value in their land was monetized into quality new housing, largely as I proposed eight years ago when Kelo was coming to the Supreme Court.
Were it up to me to decide Kelo, I’d make the law by ruling for the City on ‘public use’ but remanding with an expanded and explicit definition of just compensation.
And the principle I would be seeking to enshrine in law is simply this:
Land may be taken for urban renewal, but if it is taken for economic redevelopment, then the landowner’s just compensation must include a component of the expected increase in property value, preferably in an ownership share or its ‘indubitable equivalent.’
That is just what the twenty Mount Holly holdouts got.
Moving to better housing, but not moving:
Mount Holly holdout residents Joyce Curry and Barbara Ramos
For Nancy Lopez, who moved to the Gardens almost 30 years ago, it was still all worth it.
“When you are fighting for something as important as your home, every tear, every effort that I have put in is totally worth it,” Lopez wrote to msnbc in a text message from Florida where she was visiting with family. “[What we were] fighting for was the American dream of owning a home and keeping it.”
I said this was a case about eminent domain for economic development, and it is. Was the neighborhood blighted when the Township of Mount Holly declared it so? Even if it was blighted, did that require the residents to move? Or did that have an incumbency vesting that gave them a legal right to remain in place, affordably, in better housing?
Those questions were the ones the residents asked.
At least the Institute for Justice understood the correct legal issue
Nobody answered them until they were delivered from their symbolism.
For those residents, the settlement means one thing: Relief. One resident choked back tears as she addressed the township council, before they voted unanimously to approve the settlement.
“By the grace of God, we were able to hold on, a lot of people lost hope, lost faith, left, and we decided to stay,” says Santos Cruz, who has lived in the Gardens for almost twenty years and raised his family there.
Actually, by the grace of free money provided by ‘liberal and fair housing advocates.’
“The resolution is a win-win: it’s a win for the township and it’s a win for us.”
Money is lubricant; money is the glue.
“Everyone had a desire to heal the community and to work this out,” said George Saponaro, the attorney for the township. He described the agreement as “not necessarily just a settlement to the case, but a resolution to all of the issues facing Mount Holly.”
Attorney George Saponaro explaining the town’s position,
With new Mount Holly mayor Richard Dow to our right
This never should have been a Fair Housing case, but in the curious world we occupy, only because it was a Fair Housing case were well-capitalized bystanders roused to provide the money the case needed.
Leona Wright, a 95-year-old Gardens resident, said she was happy that her grandchildren and great-grandchildren would be able to see the Gardens be beautiful again. “My journey is almost over. Theirs is just beginning,” said Wright.
The residents and the township became an unwilling symbol, and were used as such by forces much larger than themselves, and when it no longer suited one side for Mount Holly to be a symbol, that side found the money to buy an exit from the symbolic fight, leaving the township and the residents to return to what they were and wanted to be: neighbors in a small town that needed a subdivision redeveloped.
Leona Wright, Mount Holly resident at her home.
About time, too.