What is Eminent Domain?
In California, eminent domain gives the government the power to take your property, even if you don’t want to sell. But under the Fifth Amendment, eminent domain must be for a “public use,” which traditionally meant projects like roads or bridges. Meanwhile, the government must pay the owners “just compensation” for their property.
The Supreme Court Decision, Kelo v. New London, Made It Much Easier to Abuse Eminent Domain
Unfortunately, the U.S. Supreme Court gutted federal protection against unconstitutional eminent domain when it handed down its decision in Kelo v. New London in 2005. By a vote of 5-4, the Supreme Court dramatically expanded the definition of “public use” to include private economic development. In other words, local governments can condemn homes and businesses and transfer them to new owners if government officials think that the new owners will produce more taxes or jobs with the land.
As Justice Sandra Day O’Connor warned in her dissent: “The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”
California Responds to KElo
In 2006 and 2008, California lawmakers attempted to reform eminent domain, but their bills were mostly cosmetic and did little to enhance protections for property owners. California voters also twice rejected proposed amendments (Proposition 90 in 2006 and Proposition 98 in 2008) that would have addressed property rights protections in the state constitution.
Faced with a $25 billion budget deficit, in 2011, Gov. Jerry Brown signed legislation that dissolved the state’s redevelopment agencies, which had been responsible for at least 200 projects that used eminent domain for private gain. For the next four years, California received a rare respite from eminent domain abuse.
Unfortunately, in 2015, redevelopment agencies were resurrected in another guise as “community revitalization and investment authorities,” (CRIAs) when Gov. Brown signed AB 2. Thanks to AB 2, Californians are once again in danger of losing their land to taxpayer-funded boondoggles.
CRIAs have the same powers to seize property as the old redevelopment agencies but face even fewer restrictions on their use of eminent domain. For instance, redevelopment agencies had to submit blight studies backed by actual evidence. Though prone to abuse, this system did provide at least some protection to property owners.
In contrast, no studies are necessary for a CRIA to designate a revitalization area. It need only determine that 80% of the targeted area meets certain conditions, (meaning that 20% of the land need not meet any standards at all). First, the annual median household income must be less than 80 percent of the statewide annual median income. In other words, AB 2 explicitly states that only poorer areas are subject to redevelopment.
Second, compared to the state at large, the area must have higher unemployment or crime rates, as well as the presence of “deteriorated” infrastructure and building—a vague term ripe for abuse. Californian property owners are effectively punished because their governments fail to keep crime down and infrastructure up and running.
No one, rich or poor, should have their home or business forcibly taken and transferred to a private developer. But there’s something particularly unnerving about well-connected developers abusing the political process to steal from those with the fewest resources available to defend their property.
Is the Government Trying to Take Your Home or Business with Eminent Domain?
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Even if the Institute for Justice cannot take your case, IJ has created the Eminent Domain Abuse Survival Guide to help people fight back. These methods for grassroots activism can be enormously successful. Through community organizing and activism alone, the Institute for Justice has teamed up with local communities to help save nearly 20,000 homes and small businesses from condemnation or being labeled as “blighted” or “in need of redevelopment,” the precursor to eminent domain in many states.
Eminent Domain Facts
Myths about eminent domain abound. Here are the facts:
Eminent Domain is Not a “Last Resort”
Eminent domain is not just abused when people lose their homes in court. It is also abused when a home or business owner sells under the threat of condemnation. The government’s ability to condemn property is so ominous that the mere threat of eminent domain influences all “negotiations.”
Truly voluntary negotiation is impossible when one party has the power to get what it wants no matter what; if the government can take any property it wants, owners have no real power in negotiation. So when officials say they will use eminent domain only as a last resort, it simply means they will use force to take people’s property against their will if they do not agree on a price.
Economic Development Does Not Need Eminent Domain
Projects that use eminent domain often fail to live up to their hype and can end with vacant lots and empty promises. By imposing tremendous costs (both social and economic) in the form of lost communities, uprooted families and destroyed small businesses, eminent domain often thwarts, rather than helps, economic growth. Instead of seizing private property, cities can streamline regulatory barriers, like permitting and zoning laws, and usher in development without eminent domain.
Eminent Domain Harms Vulnerable Communities
Communities targeted by eminent domain for private development are much more likely to be communities of color, while residents are much more likely to live at or below the poverty line and have lower levels of income and education than surrounding neighborhoods, according to research by the Institute for Justice. Cities often target these communities for condemnations, as government officials know the residents there rarely have the political clout or the financial means to fight back.