Community Benefit Agreements, or CBAs, have quickly become a useful tool to ensure that the benefits reaped from large-scale urban development projects are shared among all stakeholders, particularly the community in which the development takes place. In exchange for the local community’s support, which is critical to the developer to progress through the permit application process efficiently, the developer contractually agrees to provide a slate of benefits to the affected community. CBAs have been lauded for their ability to require developers to promote affordable housing, first-source hiring programs, and other targeted benefits which the host community contracted for. However, one of the biggest critiques of CBAs has been that they may violate the Takings Clause of the Fifth Amendment if the local government becomes too involved in the negotiating process of a CBA. During Detroit’s 2016 Elections, grassroots activists, along with local council members, proposed an ordinance which would have mandated a CBA as part of all major development projects undertaken in the City. Ultimately, the ordinance did not receive the necessary votes to become part of Detroit’s charter. However, had the ordinance been approved and implemented, those implementing the ordinance would have either: 1) been constrained by the scope of the Takings Clause, which would severely limit the types of benefits that could be bargained for in a CBA; or 2) risked violating the Fifth Amendment. This Note argues that while legislatively requiring CBAs may increase their number, the CBAs created under this type of ordinance would not facilitate equitable development, as they would be constrained by the Takings Clause. Rather, this Note suggests that a better alternative to legislatively mandated CBAs would be legislation that provides local communities with better tools to negotiate CBAs, without local government involvement in the negotiation process. Accordingly, affected communities would have more bargaining power with developers and be free from the constraints of the Fifth Amendment in the benefits they could broker. As a result, municipalities as a whole would be better equipped to ensure that the effects of real estate development would be equitable to all those who would be affected by it.
Legislatively Mandating A CBA Is Not The Way: A Case Study Of Detroit’s Proposed Community Benefits Ordinance And Its Constitutionality Under The Takings Clause Of The Fifth Amendment,
26 J. L. & Pol'y
Available at: https://brooklynworks.brooklaw.edu/jlp/vol26/iss1/5