What is Eminent Domain?
In Wisconsin, 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.”
Wisconsin Responds to KElo
Wisconsin improved its eminent domain laws by enacting Assembly Bill 657 in 2006, earning a C+ in a report by the Institute for Justice. Wisconsin’s legislation prohibits the government from designating large areas as “blighted” based on the condition of a small number of properties within that area. AB 657 provides some increased protection for residential properties by adding new factors to the legal definition of blight. Specifically, the law requires that residential property be “abandoned” or converted from single to multiple units and be in a high-crime area in order for it to be designated “blighted.” In addition, the law contains a vital protection—the requirement that each specific residential property be blighted before it can be acquired and transferred to a private entity.
These changes to the law make it significantly more difficult for governments to target residential property for private profit, though other types of property, like small businesses and farms, remain vulnerable. As the law currently stands for owners of these non-residential properties, blight designations may still be based on subjective and vague terms like “obsolescence” and “faulty lot layout.”
This law is a significant step forward, but the Wisconsin State Legislature should make a point of addressing the remaining problems in future sessions. A top priority should be replacing the subjective terms in the state’s blight definition with objective factors that can be conclusively demonstrated, so that property owners can take specific action to maintain their properties in such a way that they cannot be threatened with condemnation. Furthermore, the Legislature needs to extend the same protections it has afforded residential property owners to all of the state’s citizens.
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.