Eminent Domain
Recommendation
North Carolina needs comprehensive eminent domain reform, including a new constitutional amendment.
Background
What is eminent domain?
• Eminent domain refers to the government's power to seize private property without the owner's consent. The Fifth Amendment of the United States Constitution states, "Nor shall private property be taken for public use, without just compensation."
•This means that a person's property can be seized only if it is for a "public use" and "just compensation" is provided to the owner.
Kelo vs. City of New London
• In 2005, in the now infamous case Kelo v. City of New London, the United States Supreme Court held that the government could seize private property for economic development reasons (economic development takings).
• If the government thinks your house would generate more tax revenue as a shopping mall, it can seize your house and transfer it to a shopping-mall developer.
Developments after the Kelo case
• This case was a wake-up call for citizens across the country. All of the eminent domain abuse that has gone on for years is now in the spotlight.
• Other states have taken action to protect their citizens from eminent domain abuse. North Carolina, unfortunately, has done very little to protect property rights.
The Need for a Constitutional Amendment
• North Carolina's Constitution has very weak property rights protection. The state constitution says property rights are whatever is the "law of the land." The United States Supreme Court therefore defines property rights for the state. North Carolinians do not have a constitution that protects them from Kelo-type takings.
• State statutes are inadequate. A statute is inadequate protection against Kelo-type takings and other eminent domain abuses. When a statute can be changed at the whim of political interests, this is not legitimate protection.
• Property rights should be treated like other fundamental rights. If freedom of speech rights were gutted, we never would rely on statutes to protect this fundamental right.
The Need for Comprehensive Eminent Domain Reform
• "Public Use" has been interpreted to mean almost anything. It should be clearly defined to mean a use by the government or by the general public as a matter of right (e.g., roads and schools).
• "Just Compensation" is not just. Receiving fair market value, which generally has been considered just compensation, is far from just. Compensation should restore affected property owners to the same position that they would have been in had their property not been taken.
• Kelo-type takings should be prohibited. The legislature did remove provisions that expressly allowed for economic development takings; however, it still has not created a blanket prohibition clearly prohibiting all economic development takings. If North Carolinians are protected from Kelo, then why should anyone oppose a blanket prohibition on economic development takings?
• Economic development taking authority often is hidden. For example, it is possible for a regional transportation authority to take property as long as it is "useful for the purposes of public transportation" (N.C. Gen. Stat. §160A-601, emphasis added). This could mean almost anything, including takings for economic development reasons.
• The burden always should be on the government. Eminent domain is a very powerful tool that should be used only when the government can demonstrate it is necessary and no reasonable alternatives exist.
Analyst: Daren Bakst, J.D., LL.M.
Legal and Regulatory Policy Analyst
919/828.3876 • dbakst-at-johnlocke.org
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