Charlestown, Indiana: The Robber Baron City Government
Indiana passed laws restricting eminent domain -- the ability for government to force citizens to sell their property, supposedly for the public good (but also used to yank people's property and hand it over to developers, under the color of law).
Well, when one sleazy way to take what doesn't belong to the government falls, another seems to rise up in its place.
Scott Shackford writes at Reason:
The mayor and city officials of Charlestown, Indiana, a rural community with a population of less than 8,000, are trying to arrange to hand over hundreds of homes to a private developer. He's not using eminent domain to do so. Instead, the city stands accused of deliberately finding excuses to burden the community's residents with thousands of dollars of fines that will be waived if they sell their properties to the private developer.The property-rights-defending lawyers of the Institute for Justice (you may recall their efforts to stop abuse of civil asset forfeiture) are stepping in to represent several property owners in this community and are seeking an injunction to stop the city from trying to use code violation citations to essentially force property transfers.
From the Institute for Justice:
The citations state that the owner accrues penalties of $50 per violation, per day. Multiple citations are issued per property, which means that a single property will begin accumulating hundreds of dollars in fines each day. The fines can be for things as minor as a torn screen, weeds taller than eight inches or chipped paint. In many cases, the fines begin the day the citation was issued, not the day the owner received it. So owners can easily be on the hook for thousands of dollars in fines before they even receive notice, and the fines continue to accrue until the owner is able to repair the property.The city knows that many of the residents cannot afford to pay these exorbitant fines, leaving them only two options: Sell their home to Neace Ventures or raze it to the ground to have the fines waived. The scheme would be bad enough if Neace were offering fair market value for the homes, but it is not. The inspections regime has been a windfall for Neace. Not only has it compelled more than 140 homeowners to sell--it has also forced them to sell at a considerable loss. Most of the homes have a tax assessed value of between $25,000 and $35,000, and they would be worth much more if the city had not caused the market to collapse by announcing in 2014 that it was going to destroy every home.
This is obscene and theft -- lipsticked up to look like willing real estate deals.







Compelling argument for recall elections. Their mayor is unmitigated scum.
I don't know what recourse, if any, they have in the law.
Patrick at February 14, 2017 12:12 AM
This is completely terrible.
This is why, if you have money to donate, I hope you'll consider Institute for Justice or theFIRE.org -- organizations that defend people, pro bono, who probably otherwise have little hope of a defense against a massive power (whether government or a university).
Don Draper at February 14, 2017 5:03 AM
If anything, this is worse than eminent domain, as that requires fair market value to be paid.
Now, they might want to take a stab at a RICO suit, given that it appears that the mayor and the developer colluded to deprive them of money.
Otherwise, I'd suggest tar, feather, rail. Some assembly required.
I R A Darth Aggie at February 14, 2017 6:14 AM
This is just all kinds of corrupt. There is no way in hell that the city officials involved aren't on the take. Doesn't Indiana have a state bureau of investigation, and if so, why aren't they on this? And how is it, in the land of the free, that a government can fine a citizen for "chipped paint"?
Cousin Dave at February 14, 2017 6:48 AM
According to a blurb in Wikipedia, the Pleasant Ridge Subdivision is an "impoverished area" and the city wants to redevelop it. Which brings up the question, where are these "impoverished" people to go? Is this an attempt to alleviate the town's eyesore areas, by moving it to another town?
Still, there are two sides to every story.
According to the Courier-Journal:
The resolution says the area is not a desirable place to build new homes and calls the area a “crime hotspot” with an active illegal drug culture and a greater number of criminal arrests, animal bites and a higher incidence of residential fires. Mayor Bob Hall has said 50 percent of the city’s police calls come from the neighborhood.
In the 1970s, a majority of the units were owner-occupied, but the resolution says about 70-80 percent of the units are now renter-occupied, creating for a more “transient” population.
Originally developed in 1942, Pleasant Ridge consisted of 412 Gunnison-style homes, which were originally built in New Albany and assembled on-site without foundations.
In addition:
They were brought in to provide housing for the workers at the [long-closed] Army Ammunition Plant, the present site of River Ridge Commerce Center.
The resolution says the homes were constructed with lead-based paints and asbestos, which today are considered hazardous. It also calls the homes “less sturdy and durable than typical homes” and says the over 350 remaining homes have “deteriorated substantially.”
The city apparently explored the possibility of repairing the houses, but found the cost to be prohibitive at $56,000 go $77,000 per house. “We can build a new house for $77,000,” City Attorney Mike Gillenwater said.
However, allowing the developer to acquire the houses at below-cost seems to belie the city's claim that nothing else can be done and to imply collusion between the city and the developer.
Conan the Grammarian at February 14, 2017 6:51 AM
Governments like to make it illegal to be poor. Instead of finding ways to increase jobs and income, it is easier to simply chase the poor people away--and look! average income goes up!
cc at February 14, 2017 9:00 AM
@ Conan the Grammarian - sure, there are two sides to every story. The other side here is that these people are poor and have limited resources.
If crime is high, don't compound it by stealing what little they have left. Build a police station.
If there is an 'active illegal drug culture', how do you help that situation by making these people homeless and indigent? Please tell me, I'm dying to know? Maybe a better way to look at this might be to decide to assign a lower priority top drug crimes? I'm just sayin' . . . .?
More animal bites? So tell me now how enforcing bullsh*t ordinances about screens and paintwork will reduce the number of people bitten by animals? I don't know - maybe concentrate on enforcing animal control ordinances, rather than paintwork rules? It could work.
More residential fires? Build a fire station. Pass an ordinance requiring smoke detectors, and enforce that - that actually has a colorable connection to public safety.
But spare me the convoluted explanations about how this is all just normal ordinance enforcement - any fule can see that the city fathers think they have found a dandy way to get rid of a neighborhood that probably doesn't generate too much tax revenue, and replace it with tony new homes with high assessed values. I doubt there's actually a direct corrupt connection between the developer and the city leaders - the promise of a bigger tax base and higher revenues is enough, since that's what pays their salaries and pensions.
Remember, folks, that the serial killer known as BTK made his living as an ordinance enforcement officer. That's the kind of person that's attracted to that type of work. The voters should recall this bunch of thieves in double-quick time.
llater,
llamas
llamas at February 14, 2017 9:23 AM
Otherwise, I'd suggest tar, feather, rail. Some assembly required.
I'd suggest killing the family members of the politicians and developers involved, were it not illegal to do so
lujlp at February 14, 2017 10:05 AM
llamas, I wasn't condoning what the government of Charlestown is doing and I strongly suspect collusion between city officials and the developer to the enrichment of both. I've been a critic of governments balancing the books on the backs of the poor before and still am.
Where are these people to go if the government and/or developer won't give them a fair price for their property? What right does the government have to decide they must go? Even if there was the pretense of eminent domain, this is nothing more than government-sanctioned robbery, despite the crime and other problems endemic to the neighborhood that the government says is driving the redevelopment.
However, your solutions are not realistic. Building an additional police and/or fire station is not an option for a small town with a small tax base. Charlestown has a population of 7,990. What city expenditure do you sacrifice to build an additional police or fire station? The police department has 16 officers. The fire department is a volunteer department. I'm sure the city budget is stretched.
This neighborhood accounts for 50% of the police calls of a small department, one probably ill equipped to deal with violent criminals and drug rings. Repeated police calls involving escalated crime levels and violence, all driven by one neighborhood, can get expensive and can tax an already stretched municipal budget.
Maybe the Pleasant Ridge folks can form a neighborhood watch. Or maybe the owners of the houses can be taxed more for the increased level of services their tenants are using (70% - 80% rental occupancy in that neighborhood). See how long an owner hangs onto a house that costs him more money than it generates in rental income. And who would buy such a house? Then where would the residents go?
Yes, it's unfair to the residents; especially to the ones who own their houses. I don't know what the solution is, but highlighting the 20-30% of owner-occupied houses as a sob story example of the entire neighborhood is disingenuous.
Conan the Grammarian at February 14, 2017 12:19 PM
llamas, I wasn't condoning what the government of Charlestown is doing and I strongly suspect collusion between city officials and the developer to the enrichment of both. I've been a critic of governments balancing the books on the backs of the poor before and still am.
Where are these people to go if the government and/or developer won't give them a fair price for their property? What right does the government have to decide they must go? Even if there was the pretense of eminent domain, this is nothing more than government-sanctioned robbery, despite the crime and other problems endemic to the neighborhood that the government says is driving the redevelopment.
However, your solutions are not realistic. Building an additional police and/or fire station is not an option for a small town with a small tax base. Charlestown has a population of 7,990. What city expenditure do you sacrifice to build an additional police or fire station? The police department has 16 officers. The fire department is a volunteer department. I'm sure the city budget is stretched.
This neighborhood accounts for 50% of the police calls of a small department, one probably ill equipped to deal with violent criminals and drug rings. Repeated police calls involving escalated crime levels and violence, all driven by one neighborhood, can get expensive and can tax an already stretched municipal budget.
Maybe the Pleasant Ridge folks can form a neighborhood watch. Or maybe the owners of the houses can be taxed more for the increased level of services their tenants are using (70% - 80% rental occupancy in that neighborhood). See how long an owner hangs onto a house that costs him more money than it generates in rental income. And who would buy such a house? Then where would the residents go?
Yes, it's unfair to the residents; especially to the ones who own their houses. I don't know what the solution is, but highlighting the 20-30% of owner-occupied houses as a sob story example of the entire neighborhood is disingenuous.
Conan the Grammarian at February 14, 2017 12:26 PM
So the law abiding homeowners should be forced to pay for the actions of someone else's renters? That hardly seems fair.
JoJo at February 15, 2017 8:32 AM
Who said the owner-occupiers were law-abiding? Perhaps they're the ones stirring up trouble and not the renters; or not the renters alone.
The 350 households in the Pleasant Ridge neighborhood, out of an estimated 3,097 households total (See Notes below), consume an outsized amount of community resources in terms of fire and police protection (50% of police calls). So, 11.3% of the households use 50% of the resources. Is that fair? Right now, other property owners in other neighborhoods are paying for the fire and police protection being used profligately by the Pleasant Ridge neighborhood.
What exactly is "fair" in this situation? What the city is doing is reprehensible, but what the neighborhood has become is toxic, and is a cancer that could spread to other neighborhoods.
Notes:
7,990 ÷ 2.58 ≈ 3,097
7,990 is the population of Charlestown, IN
2.58 is the average household size in Clark County, IN
Conan the Grammarian at February 15, 2017 12:57 PM
Well, if that's the problem, there are existing tools. Every state has laws covering clearing of blighted neighborhoods. They tackled a lot of this back in the '50s and '60s, when nearly every large and medium-sized town in America had at least one really bad tenement-slum area -- we're talking no running water, no sanitation, no heat, and no non-sieve roofs. (Think "Potterville" in It's a Wonderful Life. So laws, court decisions, and procedures have been worked out already for this. Maybe everyone has forgotten how, but the process still exists. It's not a new problem.
The upshot is, you can use eminent domain to clear a neighborhood that constitutes a public health hazard. But that's subject to the usual rules of eminent domain: the owners have to be paid a more-or-less free market price for their property (which, if the neighborhood is blighted, is probably not much). Sometimes owners of rental or commercial property in such neighborhoods will even donate their property in order to get the tax writeoff, but the city still has to negotiate with them. Fining the property owners over trivial matters like chipped paint, and then using that as a pretext to seize the property without compensation, does not rate.
The second rule is that the land taken has to be used for public benefit. That could mean either building some public-use facility there, or selling the property to the highest bidder and returning the funds to the treasury. It does not mean simply giving the property to a developer. (Or at least it didn't until Kelo v. New London...)
It's the same reason we defend the First Amendment vigorously: if you allow the government the power to make exclusions to civil rights, then some day you could find that power used against you.
Cousin Dave at February 15, 2017 1:33 PM
Apparently not in Indiana. The state has restricted the ability of municipalities to seize property for economic development. However, clearing a "blighted" area is apparently much easier.
So, the city is declaring the area a "blight" and harassing the homeowners into selling out.
Charlestown appears to be an upscale suburb of Louisville. The big problem seems to be that the median house value in Charlestown is over $100,000 and none of the houses in Pleasant Ridge are valued at anywhere close to $100,000. Those shacks are bringing down the neighborhood and simply must go.
The city has issued a "Blight to Bright" redevelopment plan brochure, linked here.
PS - Amending my earlier estimate. I was able to find a 2010 Census Bureau household count for Charlestown. The city has 2,884 households, living in 3,169 housing units.
Conan the Grammarian at February 15, 2017 2:52 PM
"So, the city is declaring the area a "blight" and harassing the homeowners into selling out."
Interesting. Alabama has laws allowing neighborhoods to be condemned for blight, but you still have to go through the eminent domain process -- you can't just seize the properties. I remember two blighted neighborhoods being condemned and demolished here in the 1960s. I was a child then, but when I was a bit older my dad talked to me about it and what they went through. I remember it took several years and there were court cases, but most of them were over what the market value of the property was, rather than the process itself. One of them was probably sold to a developer -- it's a subdivision now. The other one actually became public use; the civic center now occupies most of where it was.
Cousin Dave at February 16, 2017 9:23 AM
The sleazy mayor owns a house at 360 Main Cross Street in Charlestown, just a few doors down from city hall. It was in terrible condition for years, but some repairs have been made. Peeling paint, rain gutters rusted and hanging from the roof, a torn blue tarp covering the topmost part of the roof, and weeds a few feet tall in the yard. It's probably really nasty inside. Google 360 Main Cross Street, Charlestown, Indiana, then click satellite view. Google will show it as the little building to the right, but it's really the white, two-story house. The plywood has been removed from the windows, too. It's been in major disrepair for several years. Yes, George R. Hall is a sleazeball, and a hypocrite, too. He has not been fined, either.
Dustin Jennings at September 19, 2017 1:58 AM
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