Asset Forfeiture in Drug Cases is Hurting Investment in the Inner Cities

One of our readers sent in the following observations about asset forfeiture and its impact on investing (and consequently economic development) in neighborhoods that are perceived to have illegal drug problems. (Forfeiture is not solely limited to drug cases, but drugs are the mainstay.)

I am in the real estate investment business. Increasingly I find investors staying away from investing in rental properties and neighborhoods perceived to have illegal drug problems. Investors more frequently state police can too easily forfeit their real estate because of one tenant's illegal activity at a rental property, e.g., selling drugs, even when it is unknown to the owner. Consequently investors' fears of forfeiture are depressing property values in certain neighborhoods and cities, driving downward the property tax base needed for tax revenues to support the infrastructure of the community. Consider: As governments more and more force landlords to act as attorney generals policing the lives of their tenants, and hold landlords accountable to police for not stopping their tenants from committing unknown or foreseen illegal acts, more investors say, "who needs this!" Constant police raids in certain neighborhoods may actually result in a financial net loss to a community where investors retreat, causing assessed property values and property taxes to decline. There is little incentive for investors to spend money upgrading rental property in neighborhoods where drug problems exist if the police are targeting rental property for asset forfeiture.

I think that pretty much speaks for itself. But it would be a shame to stop there. So, a few links:

• click here to read how the Fulton County (Atlanta, GA) DA's office spent forfeiture funds on banquets and balloons and a superman costume;
• click here to read about the Austin, Texas police department's criminal inquiry into possible misuse of forfeiture funds; and
• click here for a recent report over what is basically an act of theft via forfeiture committed by New Mexico police. (Make them stop, Gov. Richardson!)

Read our asset forfeiture reporting on an ongoing basis here, or subscribe to it by RSS here. And of course, check out the organization Forfeiture Endangers American Rights (FEAR).