In June, when the U.S. Supreme Court ruled government has the right to seize homes to make way for private redevelopment, it set off fear in the hearts of homeowners and lawmakers alike. A flurry of bills and state ballot initiatives have been introduced in response to concern that the court's decision can put anyone's property up for grabs through eminent domain. That case, Kelo v. City of New London, Conn., involved seizure of waterfront homes to allow the nonprofit New London Development Group to develop a hotel and health club near a new research center. It wasn't a blighted...