Los Angeles council members propose using eminent domain to seize apartment buildings to prevent rent hikes. The complex was built under a deal that required the developer/owner to hold rents below market levels for thirty years, and that period has now expired. [David Zahniser, Los Angeles Times; Christian Britschgi, Reason]
I think the scheme is premised in part on sponsors’ knowing that the city could proceed to make a low-ball offer premised on some combination of 1) uncertainty about whether judges would in fact award a fair market value sum that reflected actual market values, 2) the expected cost of litigation, and 3) other leverage the city might be able to bring to bear on the owners. Gideon Kanner, emeritus professor at Loyola L.A. Law and land use expert, has had a running feature for years at his blog called “Lowball Watch” with many examples of the low-ball offers routinely made in eminent domain proceedings.