Public Power, Private Gain

June 2003

Public Power, Private Gain

IJ Report Documents 10,000-plus Eminent Domain Abuses Across U.S.

By Dana Berliner

Think your home is your castle?

Think again.

Most people don’t realize that the government often takes people’s homes and businesses not for a public use, such as for a post office or a police station, but for the benefit of private developers. For years, the Institute for Justice has been saying this is a nationwide epidemic, but whenever someone asked, “how often does this really happen?” we had no answer. There is no official data on the use of eminent domain for private parties, so we had to rely on examples. That’s why for the past couple of years we have been working on a report documenting just how often state and local governments across the country use their eminent domain power for private benefit. We added up the numbers from published news articles and court documents, and the results were even worse than we suspected.

Over the past five years, governments have condemned or threatened more than 10,000 homes, businesses, churches and private land for private business development. More than 4,000 of these properties are currently under threat of condemnation for private parties.

Among many examples, the report found that in the past five years, governments have:

Condemned a family’s home so that the manager of a planned new golf course could live in it;

Evicted four elderly siblings from their home of 60 years for a private industrial park;

Removed a woman in her 80s from her home of 55 years supposedly to expand a sewer plant, but actually gave her home to an auto dealership.

Private developers love eminent domain. By cozying up to local bureaucrats, they can secure land on the cheap without the hassles of negotiating with individual owners. And local officials get to trumpet exciting projects promising new jobs and taxes. But because everyone’s home or small business would generate more jobs or taxes as a big business, no one’s land is safe.

Cities thus use eminent domain to favor large businesses over mom-and-pop establishments, national chains over local businesses, upscale condos over middle-class single-family homes, and government-chosen projects over ones developed privately.

This was never supposed to happen.

The U.S. Constitution and every single state constitution limit eminent domain to projects for “public use.” Most people understand “public use” to mean things like highways, bridges and prisons—not a casino, condominiums or a private office building. But for too long, courts have failed to check the marriage of convenience between government and developers, declaring “public use” to mean whatever politicians say it means, no matter how blatantly private the project.

The epidemic of eminent domain abuse has claimed too many victims and must be stopped. Until that day, no one’s American Dream will be safe from the overreaching hand of government.

The report has earned very favorable coverage nationwide. As The New York Sun editorialized, “‘New York is perhaps the worst state in the country for eminent domain abuse.’ That is according to a report released yesterday by the Castle Coalition, a project of the libertarian Institute for Justice. It’s not hard to see why.  In just the last five years, New York has condemned small businesses on behalf of the New York Stock Exchange, the New York Times, Home Depot, Costco, and Stop & Shop.” As The Wall Street Journal “Bricks & Mortar” columnist Dean Starkman noted, “The problem has been that while economic-development takings occur from coast to coast, each occurs in a vacuum. And the debate about the use of eminent domain as a public-policy tool—and its civil-liberties implications—is impaired by the lack of information. At least now, there’s some light on the subject. Dana Berliner, a senior attorney for the Institute for Justice, a Washington-based public-interest legal foundation, spent the past two and a half years combing court records, local-government documents, and, mostly, local-newspaper stories in a search for any case of eminent domain used for economic development. The result is an important and useful study: ‘Public Power, Private Gain’ covers the five-year period from 1998 to 2002 and is intended to give at least some idea of the frequency of the practice.”

In sheer numbers, the states with the worst record of abuse of private-use takings are California, Kansas, Maryland, Michigan and Ohio. The best states are Delaware, Georgia, Idaho, Montana, New Hampshire, New Mexico, South Dakota and Wyoming, none of which had land taken by eminent domain for private use.

Copies of Public Power, Private Gain are available online at the website of the Castle Coalition (www.castlecoalition.org), an organization created by the Institute for Justice to unite property owners and activists fighting eminent domain abuse.

Dana Berliner is an IJ senior attorney.