When the U.S. Supreme Court upheld eminent domain for private development in the 2005 Kelo case, the public reacted with shock and outrage, leading to a nationwide movement to reform state laws and curb the abuse of eminent domain for private gain. By the end of 2007, 42 states had passed some type of eminent domain reform.

Throughout the public backlash to the Kelo ruling, those who favor eminent domain for private development predicted—and continue to predict—dire consequences from reform for state and local economies: fewer jobs, less development and lower tax revenues.

This report tests those doom-and-gloom predictions. We examined economic indicators closely tied to reform opponents’ forecasts—construction jobs, building permits and property tax revenues—before and after reform across all states and between states grouped by strength of reform. . . .