What is Eminent Domain?
In Michigan, 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.”
Michigan Responds to KElo
Michigan is an example of a state that was not content to rest on its laurels, earning an A- in a report by the Institute for Justice. Before Kelo was handed down, the Michigan Supreme Court set the standard for the rest of the country by emphatically rejecting the idea (which, ironically, the same court had championed in its earlier Poletown decision) that private commercial development is a constitutionally permissible justification for taking one private person’s property and transferring it to another private party. In the wake of Kelo, however, the Michigan Legislature determined to act decisively to rein in eminent domain.
The result of the Legislature’s efforts was Senate Joint Resolution E, an amendment to the state constitution that prohibits “the taking of private property for transfer to a private entity for the purpose of economic development or enhancement of tax revenues.” Moreover, the amendment changed so-called blight law within the state, requiring blight to be determined on a parcel-by-parcel basis and requiring the government to prove by “clear and convincing evidence” that a property’s condition satisfies the definition of blight established by law. These were significant, important changes to the existing laws in Michigan.
The resolution passed the House by a vote of 106-0 and the Senate by 31-6. After being signed by the governor, the constitutional amendment was placed on the ballot for the November 2006 election, where more than 80 percent of Michigan voters approved the amendment limiting eminent domain.
In addition to the constitutional amendment, Michigan’s Legislature also adopted a number of bills that address condemnation procedure and compensation. House Bills 5817, 5818, and 5819 raised the cap on state-provided moving expenses for individuals (but not businesses), allowed low-income individuals to recover attorney’s fees following an unsuccessful condemnation challenge, and outlined the process of surrendering property. House Bills 5820 and 5821 outlined procedures for determining and delivering compensation. House Bill 5060 and companion Senate Bill 693 mirrored the language of the proposed constitutional amendment by altering the definition of public use to exclude economic development. Finally, House Bills 6638 and 6639 set forth specific criteria that must be met for a property to be declared “blighted.”
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.