Analysis: East Lansing Should Look to China on Property Rights

Chinese officials are considering rules that would make it more difficult for local government to seize property from individuals and turn it over to developers without at least compensating the property owners, according to a report in the May 27, 2010, edition of The New York Times. East Lansing officials may want to pay attention.

Government taking of private property in China has led to considerable civil unrest including several cases of suicide of victimized property owners. Chinese officials may be more worried about rapidly escalating real estate values and a possible future real estate bubble than individual property rights, but at least people resisting the government taking of their property has gotten the Chinese government's attention.  

East Lansing officials would be correct to point out that the situation regarding private property rights in China is much different than that in Michigan, where eminent domain is subject to federal constitutional as well as state constitutional and statutory protection. Businesses and property owners in the East Village area of East Lansing, however, have discovered that the threat of a blight designation by city officials has a serious negative impact on property values and can even threaten the future viability of their businesses.

The East Village area is a 35-acre neighborhood with 2,000 residents and 600 housing units. The area is typical of neighborhoods near universities and features well-maintained apartments, businesses and homes. City planners apparently have other ideas for the area. According to the city's master plan for the East Village area, they would like to replace students living in the area with residents of all ages and lifestyles and a more "diverse" commercial mix, including retail and office uses.  

The best laid plans of central planners seldom deliver the promised benefits but instead violate private property rights and destroy existing economic investment in the community. East Lansing officials should abandon any elements in their East Village master plan that diminishes existing property values and threatens the property rights of residents and businesses in the area.