by Jon Guze
Senior Fellow, Legal Studies, John Locke Foundation
With admirable diligence, the NC House has been trying for years to make statutory and constitutional changes designed to protect North Carolina property owners from eminent domain abuse, and this year is no exception. On Wednesday, Reps. McGrady, Lewis, Malone, and Goodman sponsored a bill (HB3) that would amend to the NC Constitution by adding the following language:
Private property shall not be taken by eminent domain except for a public use. Just compensation shall be paid and shall be determined by a jury at the request of any party.
Reps. McGrady, Lewis, Malone, and Goodman also sponsored another bill (HB10) that would change the statutes that deal with eminent domain by replacing the phrase “for public use or benefit” with “for public use.”
North Carolina certainly needs to do more to protect property owners from eminent domain abuse, and these bills are a good start. The sponsors, deserve our thanks, not just for their commitment to protecting property rights, but for their perseverance. Rep Lewis has sponsored an eminent domain reform bill in every long session since 2007!
While these bills are a step in the right direction, however, it’s not clear that they go far enough. Most states in the country, including almost all the states in the Southeast, have put much stronger measures in place to protect their citizens from eminent domain abuse. The House should consider strengthening these proposals to bring them in line with what other states have done.
The need for such measures became clear in 2005 when the US Supreme Court handed down its infamous decision in Kelo v. City of New London. That decision, brought two serious but previously little-known problems to the attention of the American public. The first problem was that most states’ laws permitted politically powerful developers and industrialists to take ordinary citizens’ homes and businesses and use them for their own private purposes. The second was that the federal courts would do nothing to prevent such takings.
In response to Kelo, almost every state in the Union took steps to protect its citizens from eminent domain abuse, and this was especially true in the southeast. The measures put in place by Florida and Virginia are generally regarded as the most effective in the entire country, and it’s therefore worthwhile looking in detail at what they did.
In 2006 (one year after Kelo), Florida passed a statute under which property acquired by eminent domain can only be transferred to “a natural person or private entity” in a very limited set of circumstance, including:
For use in providing common carrier services or systems;
For use as a road or other right-of-way or means that is open to the public for transportation, whether at no charge or by toll;
For use in the provision of transportation-related services, business opportunities, and products … on a toll road;
That is a public or private utility for use in providing electricity services or systems, natural or manufactured gas services or systems, water and wastewater services or systems, stormwater or runoff services or systems, sewer services or systems, pipeline facilities, telephone services or systems, or similar services or systems;
For use in providing public infrastructure;
Later that same year Florida’s voters approved an amendment to the state constitution that included the following very important provision:
Private property taken by eminent domain pursuant to a petition to initiate condemnation proceedings filed on or after January 2, 2007, may not be conveyed to a natural person or private entity except as provided by general law passed by a three-fifths vote of the membership of each house of the Legislature.
In 2007 the VA legislature enacted a statute requiring that:
The right to private property being a fundamental right, the General Assembly shall not pass any law whereby private property shall be taken or damaged for public uses without just compensation. The term “public uses” … is hereby defined as to embrace only the acquisition of property where: (i) the property is taken for the possession, ownership, occupation, and enjoyment of property by the public or a public corporation; (ii) the property is taken for construction, maintenance, or operation of public facilities by public corporations or by private entities provided that there is a written agreement with a public corporation providing for use of the facility by the public; (iii) the property is taken for the creation or functioning of any public service corporation, public service company, or railroad; (iv) the property is taken for the provision of any authorized utility service by a government utility corporation; (v) the property is taken for the elimination of blight provided that the property itself is a blighted property; or (vi) the property taken is in a redevelopment or conservation area and is abandoned or the acquisition is needed to clear title where one of the owners agrees to such acquisition or the acquisition is by agreement of all the owners.
The statute provides narrow definitions of “Blighted property,” “Public utility comporation,” and “Public Facilities,” and it includes a number of other provisions designed to protect property owners. Five years later, Virginia’s voters overwhelmingly voted “yes” when presented with the following question regarding a constitutional amendment:
Shall Section 11 of Article I (Bill of Rights) of the Constitution of Virginia be amended (i) to require that eminent domain only be exercised where the property taken or damaged is for public use and, except for utilities or the elimination of a public nuisance, not where the primary use is for private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development; (ii) to define what is included in just compensation for such taking or damaging of property; and (iii) to prohibit the taking or damaging of more private property than is necessary for the public use?
While Florida and Virginia have done the best, it’s significant that—with the notable exceptions of North Carolina and Tennessee—all the states in the Southeast have done an excellent job of protecting their citizens from eminent domain abuse. The section of the John Locke Foundation’s 2016 Agenda that deals with eminent domain includes this illustration based on the Castle Coalition’s 50 State Report Card:
If the constitutional amendment proposed in HB3 was approved in its present form, and if the statutory changes proposed in HB10 were enacted in their present form, North Carolina’s grade would improve, but probably not by very much. Maybe we’d earn a C or a C+, but that would still leave us way behind most of our neighbors in the Southeast. If we truly want to be first in freedom, we need to do better than that, and Florida and Virginia have shown us how.