Eminent Domain

Eminent domain is the government's power to seize private property for public use. It is a constitutional power; the Fifth Amendment to the United States Constitution states, "Nor shall private property be taken for public use, without just compensation." What that means, however, is that the Founders envisioned the property seized to be used only for a public use after justly compensating the owner.

The U.S. Supreme Court has steadily expanded this power to take private property so far afield that a government can take property even for "economic development." The landmark ruling in Kelo v. City of New London (2005), building on the Court's expansion of "public use" to include "public purpose" and "public benefits," gave government even the power to take property from one citizen and transfer it to another for economic development (if the latter would, for example, build a shopping mall on it to generate more tax revenue or jobs).

Key Facts

Recommendations

  1. Amend the North Carolina Constitution to protect property owners from eminent domain abuse.
  2. Prohibit takings for economic development.
  3. Define blight narrowly and allow for the taking of blighted properties that present a concrete threat to the health and safety of the public. This addition to the constitutional amendment would differ from a practice of seizing "blighted areas" that include some properties classified as blighted under a looser definition.
  4. Impose on government the burden to prove that a taking is for a public use, that a property is really blighted, and that compensation is just.
  5. Include relocation costs, attorneys' fees, and loss of business goodwill in just compensation. Recompensing property owners only fair market value causes them to suffer significant financial loss.

Analyst: Jon Sanders
Director of Regulatory Studies
919-828-3876 • jsanders@johnlocke.org