Eminent Domain

Eminent Domain in the United States

The Takings Clause of the Fifth Amendment to the U.S. Constitution, adopted as part of the Bill of Rights in 1791, implicitly acknowledged that the [Page 155]federal government possessed the power of eminent domain. The amendment restricted that power by requiring that “nor shall private property be taken for public use, without just compensation.” The post–Civil War Fourteenth Amendment (1868) made the Takings Clause applicable as well to the states and their political subdivisions.

The requirement of just compensation discourages the waste that would result if government could obtain property without paying for it. The temptation would be to devote property acquired for “free” to uses that had relatively little value, even though those assets were much more valuable to others and commanded a high market price.

The public use requirement traditionally meant that eminent domain was limited to instances where the condemned property would be used by the general public or by the government itself. In the instantly famous case of Kelo v. City of New London (2005), however, the Supreme Court cited judicial precedent to the contrary. It took a broad view of use by the public, equating it with benefit to the public.

The requirement for public use serves a different function from the requirement for just compensation. It eliminates the unfairness and possibilities for corruption implicit in public officials taking property from one citizen for the purpose of bestowing it upon another. Also, by making citizens more secure in their property, the public use limitation both encourages productive investment and protects an individual's personal financial independence, thus leaving room for public criticism of government officials.

The public use requirement also limits a pervasive and unavoidable type of unfairness. Unless owners have listed their property for sale, they almost always value it more than do other people. Typically, owners customize commercial property to the particular requirements of their business and count the habit of customers to return to their location as valuable goodwill. Likewise, residential owners place substantial sentimental value on their family homes and on the web of associations they have formed with neighborhood friends, merchants, and civic institutions. For displaced commercial and residential owners, the costs associated with locating suitable replacement property and moving loom large.

...