by Jon Guze
Senior Fellow, Legal Studies, John Locke Foundation
For many years, eminent domain reform has been an important part of the John Locke Foundation’s policy agenda, and it will continue to be an important policy goal going forward. However, while our previous recommendations have focused on the need to ensure that real property can only be taken for truly public use and only with full compensation, the disastrous impact that the COVID-19 emergency orders have had on many businesses in North Carolina suggests that the scope of eminent domain reform should be expanded to include what are known as “regulatory takings.”
All regulations deprive property owners of the use of their property to some extent, but when the deprivation goes too far it can constitute a taking for which compensation must be paid. The COVID-19 emergency orders are unprecedented in the extent to which they deprive business owners of the use of their property. If, as seems likely, many of these businesses are forced into bankruptcy, their owners will feel, with a good deal of justification, that these restrictions constitute regulatory takings for which they should be compensated.
Unfortunately, the courts haven’t come up with a satisfactory rule for determining when regulations go far enough to constitute takings, and regulatory takings cases have traditionally been very hard to win. This might, therefore, be a good time for the legislature to intervene by providing clear and fair guidelines for determining when and how property owners should be compensated for regulatory takings.