The Eminent Domain Debate

Eminent Domain

Eminent Domain is the process by which government takes private property for a public use. The Fifth Amendment to the US Constitution gives government the authority to take private property for a public use, provided that the property owners receive just compensation. The debate arises over the different interpretations of public use. The courts have held that public use should be defined broadly to include improvements that are publicly owned, used by the public or for public benefit. Eminent domain has most often been used by government to acquire land for things like roads, infrastructure improvements, public buildings or schools. There is little doubt that these are public purposes, and the only debate is usually on the matter of just compensation.

More controversially, governments have recently used their eminent domain powers to cure blight, and for other economic development purposes. These have included transferring property to private owners to encourage revitalization. The use of eminent domain for economic development purposes relies on the broadest definition of public use, arguing that new investment provides a public benefit by improving the economic conditions in a community.

Some critics of eminent domain argue that it allows local governments to ignore private property rights, and others contend it provides an opportunity for government to take from those who have the least and give to those who have money and power, all in the name of economic development.

In a 2005 US Supreme Court decision (Kelo) the Court ruled that the City of New London, Connecticut could use their eminent domain powers to take private property away from homeowners to make way for a new waterfront development.

According to the National League of Cities, land acquired through eminent domain for economic development is usually designated for one of four purposes: to cure blighted conditions; to clear title of vacant property; to resolve compensation disputes; or as part of an overall redevelopment plan for an area. Most governments have used eminent domain to acquire land for economic development purposes as a last resort.

Although eminent domain is an essential tool, it has a great potential for abuse. There is an ongoing effort to define the limits of its use.

Developing a clearer definition of blight, evaluating the methodology for determining just compensation, setting uniform standards for assessing public benefit, and providing for public input on reasonable limits for the use of eminent domain are options that could be considered to reform eminent domain.

The purpose of this narration is not to advocate a position one way or another. We do not believe there can be a bright line, because every situation is different. However we tend to side with private property rights when "takings" are from one private property owner to another. We include this topic on our Economic Development web page merely to include the issue as part of the debate we all should consider.

Cherokee is a positive change agent. We acquire distressed and otherwise non-performing properties within a community, and then recycle their value.