Eminent Domain
What is Eminent Domain?
Eminent domain is a government power that it allows to take private property for public use. The government must provide just compensation to the property owner. The power applies to federal, state, and local governments in the U.S.[1]
What Gives the Government the Power of Eminent Domain?
The governments of many countries exercise the right of eminent domain, under different names, through common law. In the U.S., the right of the government to seize private property comes from the Fifth Amendment.
The Takings Clause of the Fifth Amendment prohibits the government from taking property for public use without just compensation. Several Supreme Court Decisions have upheld that right and clarified the meanings of public use and just compensation:
- Kohl v. United States. Decided in 1875, this case allowed the government to seize private property for public use through eminent domain as long as it provided the owner with just compensation.[2]
- Loretto v. Teleprompter Manhattan CATV Corp. This decision from 1982 further clarified that the government must provide just compensation even when property seizure does not have a significant economic impact on the property owner.[3]
- Kelo v. City of New London, Connecticut. In 2005, the Supreme Court further clarified the “public use” aspect of eminent domain. It found that economic development of the property that would benefit a community counts as public use.[4]
Types of Eminent Domain
The government may choose to take property from a private owner in one of a few different ways:
- Complete taking refers to purchasing an entire property indefinitely.
- The government may exercise the right to a partial taking, only seizing part of a property.
- If the government only needs the property for a specific period of time, it may exercise the right to a temporary taking.
Examples of Public Use
There are many reasons why the government may exercise eminent domain and purchase private property. The Constitution and Supreme Court state that there must be some type of public use. Examples of public use include:
- Building new roads, bridges, railways, or other types of transportation infrastructure
- Government buildings
- Water supply structures
- Expanding public parks, including national parks
- Using the property for the purpose of a war effort, often a temporary use
- Economic development, such as shopping centers, hotels, and residences as allowed in the 2005 Supreme Court decision
How is Just Compensation Determined?
The basis of just compensation is the fair market value of the property taken by the government. In practice, it is not always that simple. The Constitution mentions just compensation and how the property owner views that may differ from how the government does.
In general, the government considers what the property owner would get if they were selling the land without being forced. It also takes into account the value of land improvements, such as buildings. It considers any natural resources on the land, like timber or fossil fuels.
The just compensation for a taking is also complicated for partial takings and temporary takings. If the government takes part of a property, it must consider any devaluation that results in the rest of the property. If the seized portion is used to build an airport, for instance, the remaining property will have less value because of the noise and other disruptions.
On the other hand, if the public use of the seized property benefits the private owner financially, the government can reduce the compensation. For example, a new road makes a piece of land more accessible, and the property owner now has more value in it for residential development.
How Does the Government Exercise Eminent Domain?
Eminent domain begins with a government or public works project. If it determines that it needs a piece of private property to accomplish the project, it may begin the process of eminent domain.
Eminent domain typically proceeds through these steps:
- The government appraises the property and determines a fair market value.
- The government makes an offer to the property owner based on the valuation.
- The government may also hold a public hearing to explain why it wants the property and what the project is.
- If the owner does not accept the offer, the government may start a proceeding known as condemnation.
- During condemnation, a court determines just compensation and whether the government can take the property.
- If the court decides in favor of the government, it pays the owner and takes the property.
Can You Challenge Eminent Domain?
A property owner can challenge the taking of their land during condemnation. Anyone subjected to eminent domain has a right to a fair hearing. During condemnation, each side presents its case. The government makes a case for needing the land and for its valuation.
The property owner can challenge the government in two different ways. They can challenge the government’s use of the land, although this rarely goes in the private owner’s favor. They can also challenge the valuation and get a better price.
Abuse of Eminent Domain
Eminent domain has a long history in the U.S. It is mostly used for the public good. There have been cases, however, of abuse of eminent domain power of the government. In Kelo v. City of New London, Connecticut, plaintiffs sued over the seizure of a poor neighborhood that allowed Pfizer to build a new plant.
The U.S. Supreme Court decided in favor of eminent domain. This expanded the definition of public use to include private developments that contribute to the greater good of the community. In this case, the defendants argued that the new plant brought jobs to the area.
The project never happened. Pfizer bulldozed the homes and never built the plant. Many saw this as an abuse of power. After the court decision, several states passed laws to prevent this kind of taking.
Eminent domain is a power the government has, and that is not likely to change. As a private property owner, you still have certain rights. If the government wants your property, talk to an eminent domain lawyer to challenge it or to get what you believe is just compensation.