A few months ago, when the Supreme Court decided that cities and states can seize private property under eminent doman laws, Sam and I had a lively debate here about the issue. I've always been reassured that such seizures, which are unpopular and painful for people, would be rare.
But will Kelo have repercussions New Orleans and The Gulf Coast? The whole project will focus on economic development, after all. When the government seizes private property, it pays the owner a going market rate. But after Katrina, rates in the region can't exactly be at their high. Certainly, after we see results from rebuilding, the rates will be higher than they are now. So I'm wondering, if property is seized now, will those who lose it have enough money to buy new property when people start to return to the region? It seems like a potential forced "sell low - buy high" scenario to me.
Not that this is happening. I just think that it could happen.