Eminent domain is the government's power to seize
private property. The Fifth Amendment of the United
States Constitution states "Nor shall private property be
taken for public use, without just compensation." In other
words, the government may seize private property for a
"public use" if just compensation is provided.
For nearly a century, however, the United States
Supreme Court has effectively deleted the phrase "public
use" from the Fifth Amendment by allowing the taking of
property for "public benefits" or "public purposes." These
broad terms give the government power to take property
for almost any reason. The demise of property rights was
evidenced in the case of Kelo v. City of New London (2005).
The Supreme Court held in Kelo that the government
can take private property from one citizen and transfer it to
another so long as it is for economic development. In other
words, if the government thinks it could generate more tax
revenue by seizing someone's house and giving the property
to a developer to build a shopping mall, it can legally do so.
- Eight states have passed constitutional amendments in
response to the Kelo decision and other eminent domain
abuses. Two of those states are North Carolina's
neighbors Georgia and South Carolina.
- North Carolina has the weakest constitutional property
rights protection in the country. The state constitution
is the only one in the nation that does not have
a "takings" clause — a provision that says property may
only be taken for a public use.
- It would not be enough, however, merely to prohibit
"economic development" takings. The government
rarely admits when it is taking property for economic
development. Instead, the government prefers to use a
different justification, usually blight or urban development,
for taking property for economic development.
The most common eminent domain abuse connected
to economic development is the seizure of private
property through blight laws.
- By defining "blight" in very broad terms, the government
can take property for whatever reason it wants.
- A recent Institute for Justice study states: "Under that
act [Federal Housing Act of 1949], which was in force
between 1949 and 1973, cities were authorized to use
the power of eminent domain to clear 'blighted neighborhoods'
for 'higher uses.' In 24 years, 2,532 projects
were carried out in 992 cities that displaced 1 million
people, two-thirds of them African American."
- Just compensation only covers "fair market value" without
regard for relocation costs, loss of business goodwill,
and other factors that financially harm property
Analyst: Daren Bakst, J.D., LL.M.
- Amend the North Carolina Constitution to protect
property owners from eminent domain abuse. A
fundamental right such as property rights should not
be protected through statutory changes. That would
be akin to protecting free speech through a state
- Prohibit economic development takings. There
needs to be a clear prohibition against the taking of
property for economic development. Unless such a
change is made, all property owners will be at risk of
losing their homes, businesses, and places of worship
to politically connected developers who "promise" to
bring in money to the community.
- Properly define blight and seize properties only if
the properties themselves are blighted. Under this
reform, the property to be seized must present a concrete
threat to the health and safety of the public.
- Impose the burden of proof on the government.
Courts improperly defer to the government over
whether something is a "public use" or a property is
blighted. This deferment makes it virtually impossible
for a property owner to challenge eminent domain
abuses. The government should have the burden to
prove that a taking is for a public use, that a property
is really blighted, and that compensation is just.
- Include relocation costs, attorneys' fees, and loss of
business goodwill in just compensation. Just compensation
should make property owners whole. When
the government seizes a home, it currently has to pay
the property owner fair market value only, causing the
owner to suffer significant financial loss.
Director of Legal and Regulatory Studies
919-828-3876 • [email protected]