When Winning is Losing

Eminent domain is now a hammer property rights proponents are using to alter zoning codes.
by | May 2006

Emboldened by a growing backlash against eminent domain, property- rights proponents are pushing ballot initiatives in several states that aim to curtail state and local powers over environmental and land use regulation.

A well-financed campaign in California, for example, is gathering signatures to put an initiative on November's ballot. In addition to restraining the use of eminent domain, the measure would require government to compensate landowners for the sorts of zoning decisions commonly used to fight sprawl or limit building heights. Similar campaigns are underway in Missouri, Montana and Nevada. The Nevada proposal would declare "all property rights" as "fundamental constitutional rights."

The initiatives go well beyond the issue raised in a controversial Supreme Court case that put eminent domain on the national agenda almost a year ago. In Kelo v. New London, the court affirmed a Connecticut city's power to take private land for the purpose of economic development. The California initiative worries John Shirey, the head of the state's association of redevelopment agencies. "It could affect any type of regulatory taking you might think of," Shirey says. "What does that have to do with the Kelo decision? This is an attempt by a group of people to play on the public furor over the Kelo decision to get a lot more done in the way of a complete redo of property rights law."

In addition to the initiatives, property rights advocates are pushing legislatures in nearly every state to limit eminent domain to traditional public purposes such as road-building. Since Kelo, they've been highlighting cases of what they call "eminent domain abuse." The case "woke people up," says Steven Anderson, with the Institute for Justice in Arlington, Virginia. "People thought it could only be used for things like schools. They didn't think it could be used to take property for a Wal-Mart or luxury condos."

While many municipal officials see the Kelo backlash as an overreaction, they're powerless to stop it in many states. Wisconsin passed an eminent domain restriction in March, even though government's power to take land for economic development was already somewhat limited there. "It wasn't widely done in Wisconsin to begin with," says Dan Thompson, executive director of the League of Wisconsin Municipalities. "If we had lost the Kelo case, the legislature would not have enacted this bill."

Another bill became law last month in Georgia. The legislation defines "public use," "economic development" and "blight" and makes it more difficult for government to condemn vacant property for redevelopment. Another section stipulates that if property taken through eminent domain isn't put to a public use within five years, the former owner can apply to reacquire it. "That provision causes us a lot of heartburn," says Susan Pruett, general counsel for the Georgia Municipal Association. "Large projects where you're mapping out a road or working on a reservoir--things of that nature where the environmental permitting and engineering could take five years--it could throw some of that into confusion and uncertainty."

Pruett says that Georgia cities will "try to work within these definitions and see how it goes." Like a growing number of local officials, however, Pruett thinks the backlash against Kelo is going too far. "I describe Kelo as the worst case we ever won."