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Owning Land

What is Eminent Domain?

July 22, 2022

When most Americans think of the fifth amendment to the US Constitution, they often think of individuals refusing to answer a question in court so as not to implicate themselves in a crime. But within the fifth amendment is another important clause for land owners: eminent domain. The last clause reads: “nor shall private property be taken for public use, without just compensation.”

Let’s Talk Negatives 

What establishes just compensation? What purpose establishes public use? Does the public benefit or just certain members of the public? What are the rules around eminent domain today?

In 2005, the United States Supreme Court heard the case of Kelo v. City of New London. In a 5-4 decision, the court ruled in favor of the ability of local government to use eminent domain for public use, a decision that motivated 47 states to make significant changes in their rules regarding eminent domain. In the end, eminent domain and the taking of property became more difficult for federal governments, since the taking of land for public use would mean that the states had to come up with valid public needs as well as fair public compensation for the land owner.

When we think of eminent domain, many often think of some new-found government power; but eminent domain and the government purchase of land has been around since the time of the US constitution in America, and even before that in Europe. The use of eminent domain has been key in building connectivity and benefits for the public. This includes roads, bridges, power lines, power grid placement, sewer systems, public water, and buildings like fire stations, police stations, prisons, and hospitals.

An example of an eminent domain proposal (Source)

Landowners often feel as though they can stall public development by court action, or by demanding better compensation. In many states, that simply isn’t true. Since only compensation is up for debate, it is not used to slow up a project. In many cases, the deed of the property transfers instantly, at the notification to the land owner, even before it settles. 

In briefs before the Supreme Court, outside organizations argued that by using the Kelo standard, eminent domain would benefit wealthy developers first. This is because the most wealthy would rarely have their land seized by the local government, while the poor or those who cannot afford lobbying efforts can find themselves more likely to be subject to bad agreements and settlements.

Some Landowners Actually Benefit From Eminent Domain 

Eminent domain, whether to fight blight or to remodel suburban communities, is often viewed in the dimmest of all possible lights. Is this always true though? 

The expansion of roads, bridges, public sewer, improved power, and the widening of roads makes rural communities more viable for the residents. When the taking of land through eminent domain occurs, many can experience an increase in property value thanks to the interest of potential buyers who would have never considered the property before changes were made to make it more attractive and accessible. 

These benefits raise the property value and can provide future growth in the community and better safety. Improved roads and water services can also lead to longer, healthier lives. 

The story of eminent domain is riddled with negative examples: decisions to ask land owners to give up land for incoming strip malls or corporate development, or minority business owners who found their homes and businesses become targets for improvements. Rural land owners feel as though they aren’t receiving full value or compensation for the land they own, even if they recognize the need for the services. 

Can A Compromise Be Reached? 

The powers of eminent domain are at times required in order to improve communities and because of its constitutional status, it is unlikely that the use of eminent domain will go away. This doesn’t mean that the process can’t be improved though.

The Texas Farm Bureau moved ahead in supporting legislation, along with others, urging that the state and communities must consider the needs of the property owner. “Good-faith initial offers or ‘bona fide’ offers and easement terms are the two key points Burns and TFB hope to achieve through eminent domain law reform,” states this article from the Texas Farm Bureau.

This statement addresses key problems that some have cited wherein a property is seized and then never developed, an end result seen in the famous Kelo case, as Pfizer’s planned development was later relocated and the future growth never occurred. By setting up a format where communities are allowed to petition and address the plans in public, the Farm Bureau believes that the transparency alone will create a good-faith transaction, benefiting both sides of the equation.

Just because eminent domain isn’t going away doesn’t mean it can’t get better. Improving legislation will benefit communities by improving their quality of life and by making sure property owners feel respected when expansion and development come their way. 

About the Author
Being a Transitional Commercial Land Professional, a registered lobbyist, and a former elected official, I develop land, write policy, and create new opportunities by writing legislation and protecting landowners. In my home life, I tend to horses and cattle beef ranching. Selling land is more than just a listing. The due diligence, different contracts, and disclosures required to prepare the land for its showcase take a skilled land expert to make sure everything is being transferred with the sale and you are getting the highest and best value the land can produce. If you are in the Kansas City area and want to make this your next place to buy land, I would love to show you the best BBQ places the locals know and help you find the right piece of land.