Policy Reports
Eminent Domain in N.C.: The Case for Real Reform

May 03, 2007

Background on Eminent Domain and Kelo

• Eminent domain refers to the government’s power to seize private property without the consent of owners.



• In 2005, the United States Supreme Court, in the now infamous case of Kelo v. City of New London, held that the government could seize private property solely for economic development reasons. For example, if a house can generate more tax revenue as a strip mall, then the government can seize the house and transfer it to a strip mall developer.

What Other States Have Done

• Seven states have already passed constitutional amendments to protect against eminent domain abuse, include neighboring states such as Florida, Georgia, and South Carolina.



• In Nevada, the voters overwhelmingly approved a new amendment but it requires passage in two consecutive general elections to become law.



• When a state brings up an eminent domain amendment to the voters, which does not also try to address regulatory takings, the voters overwhelmingly pass the amendment.

What North Carolina Has Done

• The House Select Committee on Eminent Domain Powers developed a watered down interim report in 2006 and was supposed to meet after the short session to address just compensation and other critical issues. For no apparent reason, it never met again.



• The legislature passed a bill in 2006 that deleted provisions in existing law that expressly allowed for economic development takings. However, the legislature was not willing, in legislation, to expressly prohibit all economic development takings. In addition, the bill amended the state’s urban redevelopment (blight) law.

Why North Carolina Needs a Constitutional Amendment

• North Carolina’s constitution has the weakest property rights protections in the country. It is the only state in the country that does not have an express constitutional provision that limits the taking of private property for a public use with just compensation.



• State legislation is the only thing coming between North Carolinians and the government’s ability to take private property for economic development or any other reason. When legislation can be changed at the whim of political interests, this is far from adequate protection.

Limit Takings to a Proper “Public Use”

• A constitutional amendment should only permit property to be taken for what has traditionally been understood to be a public use. Those reasons generally are not different from what North Carolina now allows in the state’s eminent domain statute.



• Proper takings include property taken for use by the government or use by the general public. It also should include takings for utilities and common carriers in their role to provide services to the general public, and to protect against blighted property.



• The blight justification for taking property must be very narrow in scope. If not, a constitutional amendment could actually be worse than the eminent domain abuse it is trying to solve. It should only mean taking property to protect the public from a clear and direct harm to the public’s health and safety that is caused by that parcel of property.



• All takings for any private use should be prohibited (except for public utilities and common carriers, as explained above).

Protect Against the “Blight” Excuse

• It is critical to understand that most eminent domain abuse has not come from blatant economic development takings, but instead through the abuse of blight laws.



• It is almost impossible to demonstrate that a taking is really for economic development reasons, as opposed to addressing some overbroad definition of blight.



• There is a “reverse Robin-Hood effect” when it comes to blight laws. The government takes private property from the poor to give to the wealthy.

Provide “Just” Compensation

• The House Select Committee on Eminent Domain Powers had drafted a bill that identified a way to better compensate eminent domain victims.



• Many of the compensation issues that need to be addressed in a constitutional amendment are consistent with the compensation issues that the Committee identified in its interim report.



• Generally, just compensation has meant fair market value.



• Just compensation should be “just.” It should make eminent domain victims “whole.” This means that they should be put in the same position that they would have been in had their property not been taken.

Create a Fair Process for Eminent Domain Victims

• The government always should have the burden of proof in all eminent domain proceedings.



• The government should have the burden of proof to demonstrate that a taking of a specific piece of property is clearly necessary for the public use espoused and that no reasonable alternatives exist.

Bottom Line

• An eminent domain amendment is a bipartisan issue, as seen by the wide support for recent eminent domain amendments even in North Carolina. Only politics and the desire to protect governmental interests will explain why a properly drafted amendment is not enacted.

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