Property Rights

My Washington Times Article Making the Case for Increasing Compensation and Procedural Protections for Property Owners Who Lose their Land to Eminent Domain

It's the second in a two-part series on eminent domain reform.

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The Washington Times recently published my article on increasing compensation and procedural protections for victims of eminent domain. Here is an excerpt:

In last month's column on eminent domain, I made the case for constraining eminent domain abuse by restoring constitutional limits on the range of purposes for which the government is allowed to take private property. Although the Fifth Amendment allows condemnations that are only for a "public use," too often courts let government officials seize property for the benefit of powerful private interests.

But takings that violate public use constraints and victimize the poor and politically weak are far from the only problem with current eminent domain policy. Other abuses include the grossly inadequate compensation received by many owners who have their land seized and weak procedural constraints on eminent domain….

The Fifth Amendment specifically mandates that owners receive "just compensation," which the Supreme Court has long interpreted as the "fair market value" of the property. In reality, however, studies show that most owners get less than that, especially less affluent owners….

Even full fair market value is often not enough to fully compensate owners for their losses. Many people value their property above what they could get for it on the market. Consider, for example, homeowners and small businesses who have been in the same location for years, and have longstanding relationships with friends, neighbors and customers in the area. Nonprofit institutions such as churches and other houses of worship also often have great value that goes beyond the market price of the land they sit on. Such "subjective value" is often left uncompensated when property gets condemned, even if the owners get the full market value of the land….

There is also a need for stronger procedural protections for property owners. Some state and local governments use "quick take" condemnations, under which they can seize property even before paying compensation and litigating legal challenges. The federal government resorts to similarly egregious procedures for many pipeline and border barrier takings. Legislative reforms should ensure that the government can take property only after courts have properly adjudicated any legal challenges and full compensation is paid. Government agencies should not be allowed to take first and ask questions about legality and compensation later.

As noted, this is my second piece in a two part series. The first part is available here. Both are part of the Times' "To the Republic" series, which features articles on a variety of constitutional issues, by various mostly conservative (and a few libertarian) commentators. It includes contributions by Arizona Supreme Court Justice Clint Bolick (on the power of judicial review), and the Volokh Conspiracy's own Keith Whittington (on impeachment).

I have written about a variety of issues related to eminent domain in greater detail in my book The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain.

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  1. The real value is that after the use, not before the use. Ilya wants to add emotional and business opportunity value. I have no objection. He should make the valuation increase clearer.

  2. “Many people value their property above what they could get for it on the market. ”

    That’s what I keep saying: Eminent domain basically always denies people full compensation, because if the proposed price actually DID fully compensate them, for everything, they would, in principle, not have to be forced to sell.

    Market price fully compensates for people whose property is on the market, because it’s on the market exactly because market price WOULD fully compensate. The properties that aren’t on the market aren’t on it because the market price isn’t enough.

    1. Concur

      Most property is valued based on current use and not highest and best use.

    2. Yup. Market price is the price between a willing buyer and a willing seller. Just compensation to an unwilling seller will necessarily be higher.

  3. Fair market value has the huge advantage of being quantifiable rather than rewarding the homeowner who can cry on cue at the expense of the stoic.

    1. Oh, come on, fair market value is a total fiction: The price somebody would voluntarily sell for if it weren’t for the fact they refuse to sell? To make a deliberately offensive analogy, it’s like raping a woman, and thinking you can compensate her by paying her what the local whores would charge. And ignoring that she places a higher value on herself than they do. It’s exactly that offensive.

      Basically ‘fair market value’ is looking at values purely from a buyer’s perspective, because it only looks at completed sales, and ignores all the properties that don’t sell because they’re more valuable to the current owner than to anybody looking to buy.

      Let me suggest an alternative approach: Practically everybody who owns property is subject to property taxes and/or has insurance on it. Let them value it themselves, and pay accordingly.

  4. You are likely to find, to increasing degree, Prof. Somin, that the more you consort with right-wingers in modern America, the less effective your advocacy is going to be.

    You should choose, and your ideas deserve, better political playmates, professor.

  5. How about these 2 ideas. If the Gov’t claims the Property is worth X for Eminent Domain purposes, anyone can buy it for X+1 dollars. This would quickly increase compensation paid. Likewise, Property Tax Valuations, if the Property valuation is too high, enable the Property owner to sell to the Gov’t Tax Authority for that Value.

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