Eminent Domain

Background

Eminent domain has become a matter of public debate since the U.S. Supreme Court’s June 2005, decision in Kelo v. City of New London. In that case the U.S. Supreme Court upheld the city’s condemnation of investment and owner-occupied residential properties in the Fort Trumbull neighborhood for a major mixed-use redevelopment project. New London is an older, economically depressed port city suffering from high unemployment and a declining population. The goal of the city’s redevelopment project is to create new jobs, provide additional housing, and improve the livability of the community. Although the Court’s decision upholding the redevelopment plan was consistent with longstanding legal precedent, it nonetheless generated an impassioned public debate about the uses and potential abuses of the eminent domain power for economic development.

As a legal matter, the eminent domain debate focuses on the meaning of the term “public use” in the Takings Clause of the Fifth Amendment, which provides: “nor shall private property be taken for public use without just compensation.” When the government condemns private property it is unquestionably “taking” property, and there is no dispute that the government has an obligation to pay “just compensation;” the issue in a Kelo-type case is whether the taking is for a “public use.” The Supreme Court has said that a taking serves a “public use” so longs as it serves a legitimate public purpose, regardless of whether parcels within the redevelopment area are ultimately transferred to private owners. Property rights advocates have argued that “public use” should be limited to cases where the government owns the property or the public has a right to physically utilize the property.

As a policy matter, the eminent domain debate focuses on whether condemnations for economic development actually serve valuable economic development and other community objectives, to what degree the eminent domain power is being exploited by developers and other special interests for their own ends, whether property owners are being fairly compensated, and whether exercises of the eminent domain power unfairly target low-income and minority populations. Many state legislatures as well as Congress are considering legislative proposals to limit, if not eliminate, the use of eminent domain for economic development. A number of ballot measures to limit eminent domain were presented to voters in various states in November 2006.


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