Lawsuit Challenges Mayor’s Mission to Bulldoze Low-income Neighborhood for Private Development

Charlestown, Indiana —Imagine being told that the home you’ve lived in for most of your life—a home you own free and clear, a home you’ve raised your family in—was going to be bulldozed by the city to make room for a new housing development. That nightmare is an unfortunate reality for dozens of homeowners in the Pleasant Ridge neighborhood of Charlestown, Indiana. The city, led by Mayor Bob Hall, has concocted a scheme to trample the constitutional rights of its residents by forcing the sale of their homes to a private real estate developer.

charlestown-property-rights-ifj_9507Today, in the wake of the city’s unconstitutional actions, the Institute for Justice (IJ) is partnering with the neighborhood to sue the city. The motion, filed in the Clark County Circuit Court, asked the judge to issue an immediate preliminary injunction protecting the homeowners from the city’s illegal scheme and to put an end to the mayor’s mission to destroy this vibrant working-class neighborhood.

“The city’s ultimate goal is to oust the current residents, bulldoze their homes and build a fancy new subdivision for much wealthier people. This is one of the most egregious abuses of property rights the Institute has ever seen,” said IJ Senior Attorney Jeff Rowes, who represents the neighborhood. “Pleasant Ridge is a community of hardworking, blue-collar people who love their neighbors, take care of their neighborhood and want to live in peace. They deserve a government that protects their rights and leaves them be.”

Here’s how the city’s illegal scheme works. In the past, cities used eminent domain to seize homes for private development. But following the notorious Kelo Supreme Court decision, Indiana enacted strong protections to prevent eminent domain from being abused for “economic development” projects like this one. The city and a developer called Neace Ventures, however, concocted a plan to evade these protections by turning the city’s once-benign housing code into a bludgeon.

City inspectors started fining Pleasant Ridge homeowners for minor or trivial property code violations—like a torn screen, chipped paint, or a downed tree limb. The citations stated that the owner owed $50 per violation, per day, and multiple citations were issued per property, which means that a single home could accumulate hundreds of dollars in fines per day. In many cases, the fines began accruing the day a citation was issued, so by the time an owner received it in the mail, he or she was already on the hook for thousands of dollars in fines.

Then the city made an offer that many property owners, faced with crippling fines, could not afford to refuse. If the owners agreed to sell their homes to Neace Ventures for $10,000, the city would waive the fines. Homeowners’ only other option to avoid the fines was to raze their homes to the ground.

The inspections regime has been a windfall for Neace. Not only has it compelled more than 140 property owners to sell, it has also forced them to sell at a considerable loss. The tax assessed value of the homes is between $25,000 and $35,000, and their fair market value was much higher before the city destroyed the market by vowing to demolish every property. The net savings for Neace, so far, is near $2 million.

“I have watched Mayor Hall look a roomful of people in the eye and tell them, ‘some of you will just have to move away,’” stated Pleasant Ridge Neighborhood Association President Josh Craven. “I have watched grown men and women cry at the thought of losing their homes and everything they worked so hard to build. We’re fighting for our homes, our families, our dignity and, fundamentally, our constitutional rights. We won’t let him kick us out. The fight to save Pleasant Ridge has shown every single one of us what it means to be Ridge Strong.”

“The city has resorted to illegal and unconstitutional code enforcement to compel homeowners to sell to the developer because Indiana has forbidden the use of eminent domain for exactly this sort of bulldoze-everything approach to redevelopment,” said IJ Senior Attorney Anthony Sanders. “Fines are a tool cities sometimes use as a last resort to ensure that properties are safe. The city, however, has turned fines into weapons, using them to force homeowners to sell to a private developer at a steep discount.”

Charlestown’s redevelopment plan is plainly illegal. Not only does it violate the city’s own property maintenance code, which allows the city to begin fining an owner only after it has given them ample time to correct the issue, but it also violates Indiana’s Unsafe Building Law, which explicitly prohibits immediate, accumulating fines. The city program also violates the homeowners’ constitutional rights of due process, equal protection and free speech, as well as the Constitution’s prohibition on excessive fines.

“The judge will see this for what it is: an unconstitutional land grab disguised as a benign city ordinance,” added IJ Senior Attorney Matt Miller. “The facts make it clear that the mayor’s ultimate goal is to seize all of Pleasant Ridge for Neace Ventures, while pretending not to do so. The city’s willingness to waive a property’s fines after Neace acquires it shows that the code enforcement campaign has nothing to do with public safety and everything to do with turning the neighborhood over to Neace.”

Through strategic litigation, training, communication, activism and research, the Institute for Justice advances a rule of law under which individuals can control their destinies as free and responsible members of society. IJ litigates to secure economic liberty, school choice, private property rights, freedom of speech and other vital individual liberties, and to restore constitutional limits on the power of government.

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