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The Constitution and Eminent Domain 

One of the most basic tenets of the Constitution is the right to private property ownership.  This unique allowance, together with our vast amount of open land, brought millions of emigrants to America.  It was the American Dream to own your land and work it too.  The modern version of this dream is the nice house with the white picket fence and 2½ kids.  It may not occur to most Americans, but the government has the right to take away your land and your house for the greater good of the public.  This right is called Eminent Domain, and the act of taking is called Condemnation.

Fortunately, our country's founders put limits on Eminent Domain. The last sentence of the
Fifth Amendment reads, "...nor shall private property be taken for public use, without just compensation."  The power of condemnation is only to be used for the greater good of the public, and the property owner must be fairly compensated for the part taken.  Eminent Domain in itself is necessary for roads and other public uses, but nowhere does the constitution allow for private property to be taken for another private enterprise.

While it is unconstitutional for the government to take private property and give it to a private enterprise, some cases have been welcomed by the condemned property owners.  In Gary, Indiana, the local government needed land for a multi-million dollar, minor-league baseball stadium.  It finally settled upon an impoverished neighborhood where most of the homes were either abandoned or dilapidated.  Most of the landowners were grateful for a chance to leave their rundown neighborhood and readily accepted the government's buyout.

Almost all other cases are not this way.  In 2003, an Eminent Domain watchdog group called the Castle Coalition released a five-year, state-to-state study of the abuses of Eminent Domain which uncovered 10,000 cases of abuse.  This study, titled Public Power, Private Gain, revealed that private property has been and is being condemned and given to private developers who in turn build more expensive properties thus increasing the local government's tax base.

According to the study, churches are easy targets for private condemnation, and there have been several cases where they have been condemned because they are a tax liability rather than a benefit.  The study also reveals a surprising number of situations where middle-income homes have been condemned so that high-density, high-tax-base condominiums or up-scale homes can be built in their place.  Another popular form of private condemnation is the condemning of small businesses so that a megastore can be built in their place.  An example is the condemning of a lumber store and hardware store so that a home improvement megastore can be built in their place.

For each state, the study lists how many known condemnations have solely benefitted private parties and how many known development projects have had private benefit condemnations.  According to the study, Pennsylvania leads the nation in the number of filed cases where condemnations have solely benefitted private parties.  At 2,517 known cases of Eminent Domain abuse, California's 223 known cases pale in comparison.  When it comes to threatening to condemn for private parties, Florida's 2,055 known threats leads the nation.  To date, California leads the nation with 23 cases where known development projects have had private benefit condemnations.

If you wish to read the entire study, please
click here.  The page has links to various sections of the full document.

The following article reports on the above study and adds onto it.

Report: Eminent-domain abuse widespread: Firm cites thousands of cases of government seizing land for private uses by Jon Dougherty.  Appeared on on April 22, 2003.

The Castle Coalition commentary on the controversial Kelo decision, Victimizing the Vulnerable: The Demographics of Eminent Domain Abuse, is available for free here.

Other related materials:

Eminent Domain: Being Abused?  A 60 Minutes story from  July 4, 2004.

In the city of Lakewood, Ohio, government officials are trying to condemn an elderly couple's home to make way for an up-scale condominium complex.

Eminent Domain and Private Gain by Alexandra Marks of the The Christian Science Monitor.  May 9, 2003

In this article, a New York man's four renovated properties were condemned to make way for a supermarket.  The article also reports on the Public Power, Private Gain report and summarizes a number of comparable situations.

Wrecking Property Rights - How cities use eminent domain to seize property for private developers by Sam Staley.  February 2003.

A well-written examination of Eminent Domain abuses and how state governments violate their own constitutions so that they can increase their tax base.

"Michigan Supreme Court Corrects 20-Year Failed Redevelopment Experiment: Legalized Abuse of Eminent Domain Power Screeches to a Halt" by Timothy M. Sandefur for the Pacific Legal Foundation.  August 4, 2004.

The Michigan Supreme Court overruled a 20-year-old law that allowed the condemnation of private properties for private parties.  The Court also changed the law to state that condemnation can only be enacted for a public use, not a private one.

"Eminent Domain Abuse in Arizona: The Growing Threat to Private Property" by Jordan R. Rose.  Appeared on the Goldwater Institute web page on August 16, 2002.

In an effort to justify the condemnation of private property for private gain, the Arizona government has changed their Eminent Domain law to allow condemnation of properties for a host of minor reasons including property deterioration, lack of ownership diversity and inadequately planned streets.

End Eminent Domain Abuse by Dana Berliner and Scott Bullock.  Published in Intellectual Ammunition on May 1, 2002.

A short article about how Eminent Domain is being abused and what citizens can do about it.

Pacific Legal Foundation - Defending Private Property Rights

Pacific Legal Foundation is a national nonprofit legal organization that defends Americans threatened by government overreach and abuse. Since their founding in 1973, they have challenged the government when it violates individual liberty and constitutional rights. With active cases in 39 states plus Washinton, D.C., PLF represents clients in state and federal courts, with 12 victories out of 14 cases heard by the U.S. Supreme Court.

"Just Compensation"

The term "just compensation" has been hotly debated by both property owners and condemnors. What really is "just" when a property owner is being forced to sell? Does this compensation include emotional grief? Future retirement plans? If you ask the property owner, they would say "it should." The condemnor would likely respond with "no, it should not." In most states the compensation is limited by Market Value of the real estate being taking plus damages to the remainder, adding nothing for emotional attachment or future plans. To be fair, just compensation should not be based on one or the other's viewpoint. It should be based on the market.

In a complete taking the value is obvious - it is the whole value of the property. However, this value is to be the Highest and Best Use value, not necessarily the value of its current use. For instance, say you have a 20-acre parcel that is currently being used to raise crops. However, it is a corner property on a busy highway directly in line for the next urban expansion of the neighboring city. In this case, assuming you could get approval to re-zone the property, the Highest and Best Use may be for residential development with commercial land use along the highway, not farmland. Most states include this in their interpretation of the term "just" compensation.

When the taking is partial, that is, some of the original property is being left, then determining "just compensation" would include not only the Highest and Best Use of the property before the taking, but the same test after the taking. Often the argument between the condemnor and property owner will center on the use of the remainder and how much it was damaged by the taking. Most states allow for the full value of that which was taken, plus damage to the remainder as part of the just compensation.

Many courts have determined that "just" compensation is to be liberally applied to the benefit of the property owner. However, they have also defined it to mean neither the property owner nor the condemnor should profit from eminent domain, meaning the award to the property owner is not to be outside of what the market would do (profit the property owner), and conversely, not to be under (profit the condemnor). The term "liberally applied" simply means the benefit of the doubt would go to the property owner.

Ultimately, the courts determine what "just compensation" is if the two parties cannot agree. Each state has a different procedure that will lead to this end Typically, the procedure is a two tiered appeal process whereas the argument would be first heard by a less formal court often called a "commissioners" hearing and then, if settlement was not achieved, a county court.

Theoretically the guidelines of "just compensation" is two tiered: (1) make the property owner whole; (2) neither parties shall profit from the taking.

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