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Despite Doomsday Predictions, New Report Finds Strong Property Rights Reforms Don’t Limit Economic Development

Arlington, Va.—States can pass strong property rights protection reforms and have economic development, too. These are the findings released today by the Institute for Justice in its report: Doomsday? No Way: Economic Trends and Post-Kelo Eminent Domain Reform.

Despite doomsday predictions from eminent domain apologists, such as former Riviera Beach, Fla., Mayor Michael Brown, who said, “[I]f we don’t use this power, cities will die,” states, like Florida, which passed some of the strongest reforms limiting government’s power of eminent domain, saw no ill economic effect from reform compared to states that failed to enact reform. The same was also true when comparing data before and after reform.

“Simply stated, the results bear no resemblance to the self-serving predictions of eminent domain abusers,” said Dick Carpenter, director of strategic research for the Institute for Justice. “The data reveal that post-Kelo reforms have provided greater protection to homes and small businesses without sacrificing economic health; securing property rights and stimulating economic development can coexist. With no ill economic effects—and with the substantial benefits strong reform provides the rightful owners of property and society as a whole—legislators nationwide should be encouraged to keep good reforms in place while pursuing new and stronger safeguards against eminent domain abuse.”

Using rigorous statistical methods, the Institute for Justice examined three indicators closely related to economic development: construction jobs, building permits and property tax revenues. IJ compared those data from states that passed reforms with states where no reform has taken place. IJ also compared the trends in the economic indicators before and after reform. Because jobs, permits and tax data are closely tied to development, one would expect to see early negative effects of eminent domain reform if, in fact, there were some. But there weren’t.

Carpenter said, “The gloomy predictions of those who benefit from eminent domain abuse—planners, politicians and their developer friends—are not borne out by the real-world data.”

For a copy of the report, visit: http://www.ij.org/publications/other/doomsday.html.

The Institute for Justice is a non-profit, public interest law firm that litigates to secure economic liberty, school choice, private property rights, freedom of speech and other vital individual liberties and to restore constitutional limits on the power of government. Founded in 1991, IJ is the nation’s only libertarian public interest law firm, pursuing cutting-edge litigation in the courts of law and in the court of public opinion on behalf of individuals whose most basic rights are denied by the government. The Institute’s strategic research program produces high-quality research to inform public policy debates on issues central to IJ’s mission.
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