What is Eminent Domain?
In Iowa, 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.”
Iowa Responds to KElo
In 2006, Iowa passed a bill (HF 2351) that made it more difficult for government officials to label properties “blighted,” and pursue eminent domain projects that would benefit private developers. While not perfect, HF 2351 represents an important improvement in Iowa’s protection of property rights. The new law changes how blight designations are used and requires a property-by-property assessment. Only when 75 percent of the properties in an Urban Renewal Project are blighted can the remaining non-blighted property be condemned. The new law also requires the government to prove blight by clear and convincing evidence, a significant shift away from the unthinking deference that has so long marked courts’ consideration of blight designations by municipalities.
In 2019, the Iowa Supreme Court became the fourth state supreme court to explicitly disavow Kelo in a case involving condemnations for the Dakota Access pipeline. “In sum, because we do not follow the Kelo majority under the Iowa Constitution,” the Court declared, “we find that trickle-down benefits of economic development are not enough to constitute a public use:”
“If economic development alone were a valid public use, then instead of building a pipeline, Dakota Access could constitutionally condemn Iowa farmland to build a palatial mansion, which could be defended as a valid public use so long as 3100 workers were needed to build it, it employed twelve servants, and it accounted for $27 million in property taxes.”
Nevertheless, the Court still upheld the pipeline takings and ruled against the property owners on the grounds that the pipeline was “a common carrier akin to a railroad or a public utility.” And in the eyes of the Court, a “common carrier” qualifies “as a valid public use, even when the operator is a private entity and the primary benefit is a reduction in operational costs.”
Based on their legislative reform and state supreme court ruling, Iowa earns a B- for its eminent domain laws.
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.