Can government entities, such as towns, cities, or states take your private property from you and use it for public purposes?
The Fifth Amendment says in part, “nor shall private property be taken for public use without just compensation.” So as long as you are paid a fair price, the Constitution gives the government the right to forcibly take your property for public use. It's called eminent domain.
Before its recess in June the U.S. Supreme Court interpreted “public use” to also include use by private companies as long as it is part of an economic development initiative by a local government. “Promoting economic development is a traditional and long-accepted function of government,” Justice John Paul Stevens wrote for the majority.
The court ruling has sparked an almost unprecedented backlash from politicians and private citizens alike, across the entire political spectrum. Republicans hate the ruling because they say it endangers property rights. Democrats don’t like it because they say it makes homeowners in poor neighborhoods vulnerable to government land grabs.
Shortly after the ruling, bills were introduced in both the House of Representatives and the Senate that would withhold federal dollars from local development projects if cities use eminent domain to acquire property for economic development purposes. The House passed its version by a wide margin.
Hoosier lawmakers are also considering ways to limit the impact of the ruling. A study committee has been formed, chaired by Rep. Dave Wolkins, R-Winona Lake. “We're gonna try and nip it, nip it early,” said Wolkins.
But while property owners and legislators have blasted the high court’s decision, some mayors and private developers are hailing it. Mishawaka Mayor Jeff Rea praised it as an economic development tool, saying it would help cities to eliminate blighted areas.
Cities generally use eminent domain only as a last resort, even for public projects such as roads and airports. It is unlikely that any mayor would employ the tool with reckless abandon.
In fact, some experts say the Supreme Court ruling actually protects property owners because of the narrow reach of the decision. Others aren’t buying it, however, including former Justice Sandra Day O’Conner who voted in the minority in the 5-4 decision.
In Indiana, projects such as the I-69 extension project and the new Colts stadium could be affected by any change in the eminent domain law. Wolkins wants to go beyond prohibiting local governments from using eminent domain for private economic development projects; he also wants local authorities to pay 150 percent or more of the appraised value of any property acquired through eminent domain.
Such a requirement would, of course, add substantially to the cost of public works projects and may cause some to be canceled entirely.
Eminent domain was used much more frequently in the 1960s, especially in inner city areas to help wipe out urban blight. Ironically, there hasn’t been any widespread abuse of the procedure since then.
If used properly and with due caution, eminent domain can be an invaluable tool for economic progress. It is constitutional, and it’s absolutely essential for certain types of public projects such as roads and highways.
Local governments have a vested interest in economic development projects. They are for the public good. Cities must weigh what is best for the public in general against what is best for the individual and make decisions accordingly.
But it is also incumbent upon local officials not to yield to temptation to abuse their power. Forcing the transfer of private property from an individual to a commercial developer should only be done when there is a proven public need. But that option should not be taken completely off the table by lawmakers.