What is Eminent Domain?  

In Colorado, 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.”

Colorado Responds to KElo

In 2006, the Colorado General Assembly passed HB 1411, which amended the public use definition to “not include the taking of private property for transfer to a private entity for the purpose of economic development or enhancement of tax revenue” and stated that “Private property may otherwise be taken solely for the purpose of furthering a public use.” However, the reformstill allowed municipalities to continue using eminent domain to seize so-called blighted properties, and the state’s definition of blight is sufficiently vague to allow for considerable abuse.

Unfortunately, in 2019, the Colorado Supreme Court undermined the state’s earlier attempts at reform. In Carousel Farms v. Woodcrest Homes, the Court sided with a private developer that was able to create a quasi-government authority that condemned land belonging to a rival developer.  

Back in 2006, Woodcrest Homes began planning to build a housing development outside Parker, Colorado. But after the housing market crash in 2008, the project stalled. Years later, a competing developer, Century Communities, picked up where Woodcrest left off and purchased the two pieces of land surrounding Woodcrest’s parcel.  

Century also created a metropolitan district, Carousel Farms, a “quasi-municipal structure [that] empowered the District to raise revenue through municipal bonds and, more importantly, condemn property through eminent domain.” The district then “voted” on whether to use eminent domain to take away Woodcrest’s land. Unsurprisingly, Century “won.” 

In Carousel Farms v. Woodcrest Homes, the Colorado Supreme Court upheld the condemnation: “Permitting some private benefit by public taking may strike some as unusual. But Colorado is no stranger to this method of encouraging development.” Further rubbing salt into the wound, the Court expressly ruled that “Colorado’s prohibition on economic development takings has no bearing on the condemnation at issue here.”  

As a result, whole swaths of condemnations in Colorado are subject to no meaningful public-use analysis at all. Colorado developers are free to create municipal districts, populate them with proxy electors, and wield the government’s eminent domain power for their own private benefit without review or oversight.  

The Institute for Justice filed a cert petition urging the U.S. Supreme Court to overturn the decision, but it was denied in March 2020.  Due to this ruling, Colorado received a D for its eminent domain laws.

Is the Government Trying to Take Your Home or Business with Eminent Domain?  

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Is your local, state, or federal government currently attempting to seize your property through eminent domain?

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.