Opening the Floodgates: Eminent Domain Abuse in the Post-Kelo World

Institute for Justice ^ | June 20, 2006

[FortRumbull]

In its report, “Opening the Floodgates: Eminent Domain Abuse in the Post-Kelo World,” the Institute for Justice documents how the U.S. Supreme Court’s Kelo ruling opened the floodgates that had once partially restrained land-hungry developers and tax-hungry cities. In just one year since the ruling, local governments pressed forward with more than 117 projects involving the use of eminent domain for private development. Local governments threatened to use eminent domain against more than 5,429 homes, businesses, churches, and other properties if the owners did not agree to sell, and government also filed or authorized at least 354 condemnation actions. These 5,783 properties either threatened or condemned for private development in a single year are more than half the 10,282 in the five years between 1998 and 2002.

Before the Supreme Court’s Kelo decision, cities abused the power of eminent domain. But Kelo became the green light that Justice O’Connor and Justice Thomas warned of in their dissents. The Court ruled that the U.S. Constitution allows government to use eminent domain to take and bulldoze existing homes and businesses for new private commercial development, holding that the mere possibility that a different private use could produce more taxes or jobs is enough reason for condemnation.

Justice O’Connor predicted that in the wake of the decision, any Motel 6 could be taken for a Ritz-Carlton, any home for a shopping mall, and any farm for a factory. As documented in Opening the Floodgates, her predictions are coming true—cities are pushing out motels for commercial development and replacing small businesses with upscale hotels. Homes are being replaced by shopping malls, but the stronger trend has been the replacement of middle-class residences for other, more upscale ones. Agricultural land has been taken for still more retail development.

Institute for Justice Senior Attorney Dana Berliner authored the report. She said, “The Kelo decision emboldened officials and developers, who started new projects, moved existing ones forward, and, especially, threatened and filed condemnation actions. The threat of condemnation for private development is just as much an abuse of eminent domain as the actual filing of condemnation proceedings. Cities know that now they rarely need to file condemnation actions because owners largely give in rather than fight what they believe, after Kelo, to be a hopeless battle.”

The information in Opening the Floodgates comes from news stories, public documents and court decisions. All sources are footnoted. Because there is no official data available on the use of eminent domain for private parties, there are undoubtedly many other projects, threats and takings for private use that have not been included; this report thus represents merely a fraction of the private-to-private takings since Kelo.

“A vast majority of Americans have expressed outrage over the Kelo decision because they understand the dangers of eminent domain abuse,” said Chip Mellor, president and general counsel of the Institute for Justice. “These reports underscore how valid their outrage is.”