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Eminent Domain After Kelo V. City Of New London: An Argument For Banning Economic Development Takings

March 24, 2006
By Charles E. Cohen

This paper, written by Capital University Law School assistant law professor Charles Cohen proposes prohibiting governments’ use of takings for economic development.

gavel and book

This paper, written by Capital University Law School assistant law professor Charles Cohen examines the legal evolution of the federal Takings Clause into a hybrid public-private use economic development standard, and proposes prohibiting governments’ use of takings for economic development.

Governments’ arguments favoring eminent domain as an economic-development tool lead down a slippery slope, Cohen writes.

“If the government may use the eminent domain power simply to transfer property to one who will use it more profitably, than almost any property is vulnerable,” Cohen writes. “As Justice O’Connor queried in her Kelo dissent, ‘who among us can say she already makes the most productive or attractive possible use of her property? The specter of condemnation hangs over all property.’ Such transfers are problematic because, if permitted at the will of the government, the security of property ownership is undermined. So too is respect for the legal system and political process, as most citizens would intuitively (and correctly) conclude that the beneficiaries of such a regime would be rich and powerful interests profiting at the expense of ordinary property owners. If the government can use the eminent domain power as a tool for revenue enhancement or job growth, the temptation and the opportunity to overuse the power may be too great.”

Banning using eminent domain to transfer property to non-government entities may be a simple and effective solution to the private takings problem, Cohen writes.

“In the final analysis, the simplest and most effective way to prevent a taking like the one in Kelo is simply to ban takings where the ultimate transferee will be any non-governmental entity or individual,” Cohen writes. “However, it is desirable to provide a mechanism for making exceptions for those rare cases where it might be desirable to use the power of eminent domain for beneficial and benign projects that would likely be owned by a non-government entity, such as museums, zoos, stadiums, arenas, and not-for-profit hospitals. As a safety valve for the possibility that a project not contained on the list might become desirable in the future, the law could provide that the eminent domain power could be used to transfer power to a nongovernmental entity only if the entity was not operated for profit and voters approved the use of eminent domain for the project in a public referendum.”