Use of Eminent Domain to benefit private companies

Ending eminent domain abuse–where individuals’ homes and businesses are taken by the government not for a public use but for private economic development–has become one of the central missions of the Institute for Justice’s property rights program. To me this practice seems immoral. It’s not the government’s job to give one person’s property to another person.

This practice encourages bribery. Who knows what inducements are offered to local politicians to act in favor of some big retailer or other business?

I assume this practice must have been upheld by the court somewhere along the line. More’s the pity.

Items for debate:

– Is this a misuse of eminent domain?
– Is it unconstitutional?
– Should it be stopped?
– How can it be stopped?

That just happens to be my boss’ specialty. And you are right, eminent domain is systematically abused by local governments. I don’t know that I’ve ever heard the argument that eminent domain is unconstitutional per se, though. I think it’s necessary, unless you want to live in a country with no roads, electricity, telephones, water, etc.

But the government’s use of eminent domain goes way beyond what is necessary. I’m not sure if this is specific to California, but the problem lies in the laws which were written to combat “blight”. The difficulty is that blight is not clearly defined, so any city can declare any area “blighted”, and proceed to take your home away in order to put in a WalMart or what-have-you. They don’t have to prove blight, they just have to declare it. And unfortunately, city governments are typically dishonest and/or corrupt.

People can fight City Hall, but the sad truth is that most people don’t know their rights, and give in to intimidation by the government, often selling their homes or property for less than it’s worth.

My boss has written a whole book on the subject, and I know I’m not doing justice to the subject at all, but that’s a little of what I’ve observed from working in this field.

Thanks for your input, *blowero *. Just to clear up one point, I didn’t mean to suggest that eminent domain is unconstitutional when used for public purposes such as roads, electricity, telephones, water, etc… I meant to suggest that it might be unconstitutional when used for private purposes such as Costco stores.

Baseball stadiums and casinos come to mind. Despite having dismal returns as public works, they are endlessly popular, and usually end up enriching a few private owners at the cost of tons of public tax outlay and property seized by ED.

They usually have some shred of public purpose, such as higher property values, ect, as an excuse, note.

Of course, this is exactly how the current president made his millions. Ballpark in Arlington, anyone? Lovely place to catch a baseball game, though.

Sure, but as december noted, you can make those sorts of excuses for anything, without backing it up. In the case of stadiums and casinos, decades of public policy research has indeed failed to back it up and indeed has had much to say against such projects being public works with tangible returns, whether by ED seizures or tax funding.

Bunch of stuff. HUD has specific rules on what constitutes “blight” and HUD money can’t be used to “combat blight” unless the area is “blighted” under HUD definition.

To address the OP, the use of eminent domain for commercial redevelopment is, in fact, constitutional – but the persons attempting to use it must be able to prove to the satisfaction of a court that the “general welfare” of a community, and not the benefit of the businesses that would move into the area, is the central reason for using it. I don’t know enough about the standards the courts use in evaluating such claims to speak further to it, but that may be of some help in pursuing it further.

And I do agree that the use of eminent domain, while often necessary for some governmental – and even a few private* – projects, is very much overdone.

  • A licensed public utility in some jurisdictions, and a municipality in itse behalf in others, may utilize eminent domain to obtain easements along practical corridors. Imagine the fun of laying a pipe to bring natural gas to an area if Hank, who has no use for natural gas, refuses to let the line run across his land which lies athwart the main highway to that area.