The Truth About Eminent Domain

Ah, the American dream. Work hard and you, too, can save to buy a house in a nice neighborhood, raise your family, and then be kicked out by Uncle Sam. Wait. What's that last part? If Uncle Sam could get more tax revenue from upscale condominiums, luxury hotels, and high-end office buildings, you might just find yourself out of a home. Don't worry. You will be compensated.

As cities seek to increase tax bases and create jobs, one increasingly popular solution is to take advantage of eminent domain. So, what is eminent domain? Basically, the government can force the sale of private property in the name of public use. For example, if your house is next to a freeway that's scheduled for widening, the government can force you to sell so long as you are paid fairly. The government can also declare an area blighted and initiate eminent domain procedures.

Eminent domain actually dates back to the founding of our country. For the most part, "public use" has been defined as building roads, schools, bridges, and public structures. In the 1950s, definitions of eminent domain expanded. Courts began to approve the transfer of private property to public use in the name of "slum clearance." In short, economic redevelopment became a justification for eminent domain.

Bulldozing private residences for economic revitalization has unsurprisingly met with contention. And the history of court decisions on eminent domain offers a checkered past. In 1981, Poletown, a lower-middle-class Detroit neighborhood, became the target for a new General Motors assembly plant. Poletown residents and business owners fought General Motors to the highest court. Ultimately, the ruling favored GM. The economic benefit of 6,000 new jobs promised to stimulate the economy. Consequently, 465 acres were cleared, leveling nearly 1,500 homes and over 100 businesses, not to mention several churches.

It wasn't until July 2004 that Poletown received some much-belated satisfaction. The Michigan Supreme Court unanimously overruled the Poletown decision in a similar case. This time around the court acknowledged the danger of sanctioning eminent domain. The court argued private property ownership shouldn't be threatened just because another private party has a plan for better land use.

Unfortunately for Poletown and neighborhoods like it, the damage has been done. Recently publicized cases involve residents of Lakewood, Ohio, and a business owner in Mesa, Arizona. Both groups won their cases after long legal battles. On the other hand, some not-so-lucky New York City property owners have been forced from their "blighted" block near Times Square. Why? To make room for new offices for the New York Times.

The hot case on today's eminent domain radar comes from New London, Connecticut. The city wants to condemn most of the middle-class FortTrumbull neighborhood along the ThamesRiver. This would make room for upscale condos, hotels, and offices. The Connecticut Supreme Court approved the plan for redevelopment five months before the Poletown case was overruled. In light of the new ruling, New London residents want to take their appeal all the way to the U.S. Supreme Court.

For decades, state courts have decided what "public use" encompasses, and soon our highest court may decide whether or not to weigh in.