Eminent Domain Act

Despite mass public outcry following the U.S. Supreme Court’s infamous decision in Kelo v. City of New London, eminent domain for private gain continues to threaten homeowners and small businesses. 

While 43 states reformed their laws to prevent Kelo-style takings after the Court’s decision in 2005, private developers and tax revenue hungry politicians have found other ways to affect government transfers of private property from rightful owners to private corporations. 

One of the alternatives to pure takings for so-called “economic development” is the pretextual blight designation. Under the guise of public health and safety, municipal development authorities declare perfectly livable properties blighted, thus opening the door for use of eminent domain for private economic development. 

Properties may be considered blighted because of such things as unpaved driveways, faulty lot layout, or simply because they are no longer consistent with the sound growth of the community. 

The Institute for Justice seeks to close this loophole. The Eminent Domain Act prohibits the use of eminent domain for private economic development, requires a genuine public use rather than vague claims of public benefit, and prevents abusive “blight” designations based on minor code issues or speculative planning goals. The model also strengthens procedural protections so that homes, farms, houses of worship, and small businesses cannot be taken unless the government meets clear and rigorous legal standards.