8 Pros and Cons of Eminent Domain

Is the property you own really your property? It should be since you pay property taxes on the land and structures you own, right? In the world of eminent domain, you would be wrong. Eminent domain is the right of the government to seize ownership over property when there is a greater good that can be created for the general public. The US requires “just compensation” for seizures of private property because of the 5th Amendment, but that’s the only hurdle a seizure faces.

Is eminent domain a practice that violates the rights of citizens? Or is it a necessary practice at times so that infrastructure needs can be achieved? Here are some key points to consider.

What Are the Pros of Eminent Domain?

1. The public benefits.
A government can use eminent domain to seize a piece of property to create new roads or a highway. Not only could this shorten travel times or reduce traffic, but it could create new sources of revenue from shipping and trucking as well. Building a hospital where none exists or other needed public services can also benefit from the use of eminent domain.

2. It prevents the ability of a few or one to blackmail a government into paying more.
Taxpayers are ultimately those who are funding the purchases made through an eminent domain claim. By having eminent domain in place, the possibility of owners demanding large sums of money are removed from the equation. This also shortens the time needed to secure the property because the owners involved know they are going to receive fair compensation.

3. It helps everyone save money.
Ultimately everyone saves money when eminent domain is instituted. This is because the costs for property are fair, the general public saves money or receives new services, and the property owners receive a fair market price that they didn’t have to spend months negotiating. Although there are ongoing access issues or changes in how a property operates that must be managed, overall the cost benefits are greater with eminent domain than without it.

4. Property owners can fight for what they feel is a fair price.
There are times when property owners feel like the “just compensation” offer they receive for their property is too low. In this instance, instead of being forced to accept the price they are given, an eminent domain attorney can be hired to get a better price. Should the property owner be successful in their case, there is even a chance that the court may award payment of their legal fees in with the judgment.

What Are the Cons of Eminent Domain?

1. It is a system that is easily abused.
There are many stories of business owners trying to develop properties, but running into lone dissenters who refuse to sell. These owners will petition governments for an eminent domain filing so that the fair market value will be paid to the lone dissenter and have them forced out. Then the property gets developed and sold for an even higher price. Is that for the true public good?

2. Fair compensation isn’t always fair.
Let’s say a farmer receives an eminent domain claim for a new stretch of highway that will cut through his land. Not only does this farmer lose the potential ongoing value of the crops that can be grown, but now he/she has to cross a busy highway or have an underpass or overpass installed to reach his fields on the other side. The farmer receives fair market value for the farmland, but no compensation is required for the lack of access or the loss of crop revenues in the future.

3. It creates the foundation for mass evictions.
Are redevelopment projects funded by the government for the greater public good? In San Francisco, 4,000 people living below the poverty level were relocated to new neighborhoods so that hotels and business sectors could be developed. It is easy to see how eminent domain can be seen at times as an unfair practice that targets the poor, certain minorities, and other specific demographics.

4. Every state as different ways that the law works.
There are many households which own property in multiple states in the US. Each state has different laws as to how eminent domain works. This can create confusion because some states grant rights that others do not. Without a clear knowledge of local laws that are sometimes difficult to locate, property owners can be at a natural disadvantage during a claim.

The pros and cons of eminent domain show that for the most part, a greater good can be achieved. As with any development opportunity, there will be those who let greed overcome sensibility. If the disadvantages are carefully evaluated, then the benefits to the greater good can become the focus of a future project.