Eminent Domain Part 3: Urban Renewal to the Present

Eminent domain is the right of the state to seize the private property of an individual for a public purpose with just compensation. The third and final article in this series explores the Supreme Court decisions that influenced eminent domain policy from the mid twentieth-century to the present. 

Thanks to the precedents set in the 19th century, eminent domain laws were well established in the United States. For roughly the next century, eminent domain was mostly used for its intended purpose. The laws remained stable until the 1950s when slum clearance programs (preceding the West End) resulted in lawsuits. Title I of the Housing Act of 1949 had enabled legislatures to seize private property and then transfer it directly to another private property holder. This enabled involuntary private sales of property in poor and working class neighborhoods. That is, if a city could prove “blight” was present. In the 1954 case Bernam v. Parker, the Supreme Court ruled that the use of eminent domain could be justified by a “public good.” This arguably removed all limits from the eminent domain power, which had previously been limited to public use. Americans had generally accepted the use of eminent domain in the construction of schools, roads (to a point), and stadiums. This is usually still the case. Berman allowed a far broader range of applications, but there was still debate about how far the limits of eminent domain really stretched.

In 1984, the Supreme Court decided unanimously in favor of the Hawaii Housing Authority (HHA) in HHA v. Midkiff. This case was notable because its use of eminent domain was extremely broad. In 1967, just 72 people owned 47% of the land in Hawaii, with the government holding another 49%. The state decided that it would enable the tenants of properties held by the 72 individuals to purchase the land they rented without the owner’s consent. The court found that this dissemination of property was reasonably related to a public purpose. Thus the justices found it constitutional. The case, ironically, reflected one of Webster’s arguments in the Charles River Bridge case. He had argued that broad eminent domain powers would open the door to “rentism” (favoring renters over land owners). Midkiff democratized land ownership in Hawaii, which was a valuable public benefit. However, it also confirmed that eminent domain could transfer property from one private party to another to achieve an increasingly broad range of purposes. 

Modern eminent domain law was cemented in 2005 by Kelo v. City of New London. In Kelo, the court ruled that economic benefits are a legitimate reason for using eminent domain. The decision was close, 5 for and 4 against. Justice Paul Stevens authored an opinion in favor of New London. Justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg, and Steven Breyer (the liberal jurists) joined him. They found that even if blight was not present, and the current use of the land was causing no harm, eminent domain could still be used to increase a municipalities tax base. 

Amazingly, the contested properties in New London were part of a redevelopment plan that’s function was to be determined later. That is – the city was functionally using eminent domain for land speculation. The city was seizing land before nearby development increased its value. Stevens’ finding was primarily based on Berman and Midkiff’s expansive views. But he took an unusual action and also noted that just because eminent domain allowed these broad powers didn’t mean they had to be exercised. Functionally, he was encouraging states to enact laws with greater limitations. 

In dissent, Justices Sandra Day O’Conner, William Rehnquist, and Antonin Scalia, worried that the decision would incentivize the seizure of property belonging to the poor in order to transfer it to the wealthy. Justice Thomas further noted that the text of the Fifth Amendment uses the words “public use” not “public purpose,” the scope added to it in Berman. 

Susette Kelo stands outside her home, which has been condemned by the state of Connecticut, June 27, 2005 in the Fort Trumbull area of New London, Connecticut. (Photo by Spencer Platt/Getty Images)

As determined by the Supreme Court cases discussed in the last two articles – Charles River Bridge v. Warren Bridge, Berman, Midkiff, and Kelo, the eminent domain power is functionally limitless in the United States today. The exception is that a property cannot be taken to produce something of lesser value. Otherwise, any property can be appropriated by a legislature for any purpose that is to the public benefit. The public benefit isn’t properly defined. However, it has included the removal of a poor family in favor of a rich one, or of a successful business in favor of one that might be worth more. It allows seizure of land for which there is no plan for reuse at all, so long as it will probably be used for something that produces more tax revenue later. 

Furthermore, legislatures can, and do, make business deals with private companies that involve the legislature “providing” land for the project. This is functionally what happened in the West End. The landmark example of this process is Poletown, Detroit, where that city seized an entire neighborhood on behalf of General Motors. 

People wear shirts that read, “Hands Off My Home” during a Senate Judiciary Committee hearing on eminent domain on Capitol Hill September 20, 2005 in Washington, DC. The committee is hearing testimony on the Kelo decision and investigating the taking of homes and other private property. (Photo by Mark Wilson/Getty Images)

The history of eminent domain is one of extremes and moderation. In Rome, private property could not be seized at all. In the Holy Roman Empire it could be seized with impunity. Hobbes and Locke theorized that private property only existed if the state was willing to enforce property rights, even against itself. France made their theory into law under Louis XIV. Napoleon named the process of seizure and recompense eminent domain. At about the same time, James Madison wrote a very similar clause into the Bill of Rights in just 12 words. Madison, Webster, and Marshall all feared that the practice might be utilized too broadly. Since then, the Supreme Court has allowed exactly that, stripping any meaningful restriction to eminent domain’s use. 

A woman pushes a baby stroller by signs put up by people against the Atlantic Yards development project on the western edge of the September 30, 2008 at the intersection of Flatbush and Atlantic Avenues in the Brooklyn borough of New York City. The controversial Atlantic Yards development project, which majorly includes a NBA venue for the Brooklyn Nets, will be delayed by at least six months following a ruling by a state Appellate Court. Residents of the area are seeking to block the state from using eminent domain to seize property. (Photo by Chris Hondros/Getty Images)

Today, eminent domain functions as the right of a legislature to take anything from anyone for any purpose. If Hobbes or Locke were writing today, would they classify the U.S. as a state with private property or not? It’s hard to say, but Madison certainly wouldn’t be pleased.