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Eminent Domain Reform on the Horizon in North Carolina

The North Carolina House of Representatives overwhelmingly approved House Bill 8, by a vote of 110-8, that aims to prevent local governments from using eminent domain for private gain.

The bill, introduced by Representative Chuck McGrady, proposes amending the state constitution to explicitly prohibit eminent domain from being invoked except in cases of actual public use—things like roads, schools, and libraries. This would make it illegal for government officials to seize perfectly-fine homes and businesses for the purpose of handing them over to private developers. If passed, North Carolina would become the twelfth state to amend their state constitution to reject Kelo v. City of New London, the universally-reviled U.S. Supreme Court case that sanctioned eminent domain for private gain.

In Kelo, the court allowed the city of New London to bulldoze Susette Kelo’s and her neighbors’ homes and hand the land over to a private developer who promised to build condos and commercial space that might bring the city more tax revenue. While previously eminent domain could only be used in cases of public use (bridges, roads, utilities, and public schools), Kelo re-defined public “use” to mean any purported public “benefit” or public “purpose”—things like projected increased tax revenue or jobs.

McGrady introduced House Bill 8 with the goal of ensuring his constituents and all North Carolinians are safe in their homes and businesses. He emphasized that “Fortunately, in Kelo, the U.S. Supreme Court also said the states were free to restrict eminent domain more than that, and that is precisely what my legislation proposes to do.”

While the current North Carolina statutes grant the power of eminent domain to private and public condemners in cases involving “public use or benefit,” this amendment would strike “or benefit” entirely from the law. In addition, in cases of property acquisition, this proposal would give any involved party the right to request a jury trial to ensure that property owners are not swindled into agreeing to lowball offers during often-tense acquisition proceedings.

If the bill passes in the Senate as well, the amendment would be put on the 2014 ballot to be voted on by the public. If this past fall’s election in neighboring Virginia is any indication, voters will enthusiastically support an amendment that increases private property rights.

— Robert Fountain
Robert Fountain is a Maffucci Fellow at the Institute for Justice

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